If a foreign company conducts taxable business activities in a country, it may be required to register for VAT even without having a fixed establishment there. Greenstep’s experienced VAT specialists are here to support you with any questions related to VAT compliance, registration, and cross-border transactions.
When must a foreign company register for VAT?
In most countries, Value-Added Tax (VAT) is levied on the sale of goods and services carried out as part of business operations. VAT rules vary between jurisdictions, but generally, foreign companies may be required to register for VAT even if they do not have a fixed establishment in the country.
Typical situations where foreign companies may be required to register for VAT include:
- Having a fixed establishment for VAT purposes (e.g. office, branch, warehouse)
- Acquiring goods from other EU member states into the country
- Transferring own goods across borders for business use
- Being a taxable buyer of construction services
- Selling goods or services locally
- Selling goods from or to other EU countries
- Selling goods or services to private individuals (B2C)
- Holding goods in local warehouses, including consignment stock
- Providing services taxed in the country under place of supply rules, such as:
- Passenger transport
- Event-related services (e.g. scientific, cultural, educational, entertainment)
- Admission to fairs, exhibitions, or conferences
In many countries, VAT registration is required from the first day of taxable activity. Some jurisdictions do not offer a registration threshold for foreign businesses without a fixed establishment.
What is a fixed establishment for VAT purposes?
A fixed establishment refers to a permanent place of business where a company carries out its operations. This can include:
- Branches, offices, factories, workshops, or retail points
- Warehouses or inventory storage
- Mines, extraction sites, or other permanent industrial locations
- Construction or installation projects lasting beyond a defined time frame (e.g. 9–12 months)
VAT compliance and reporting
Even if a company is not required to register for VAT (for example, due to reverse charge mechanisms), it may still be obligated to notify the local tax authorities of its business activities. In some countries, foreign businesses must also file:
- VAT returns
- EC Sales Lists / Recapitulative Statements
- Other country-specific VAT reports
Foreign companies can also choose to register voluntarily for VAT to simplify compliance or to speed up the recovery of local input VAT.
Electronic VAT filing and local tax portals
Many countries require electronic VAT returns to be submitted via dedicated tax platforms. Setting up access to these portals may involve:
- Local credentials or digital IDs
- Authorized local representatives
- Appointing a tax agent to manage filings and compliance
As procedures can be complex, it is often recommended to work with a VAT expert familiar with the country’s specific requirements.
How can we help you?
At Greenstep, our experienced VAT specialists assist companies across borders with:
- Evaluating VAT obligations in different countries
- Managing VAT registration and notification processes
- Ensuring ongoing VAT compliance and reporting
- Acting as local representatives for foreign companies
Whether you're entering a new market or scaling internationally, we're here to help you navigate the VAT landscape smoothly and efficiently. Contact our international VAT team to discuss your needs!