EU VAT ID Numbers Unveiled: A Comprehensive Guide on Who Requires Them and Where to Obtain them

In compliance with the latest regulations on the One-Stop-Shop (OSS) implemented in 2021, we have provided comprehensive information in this article regarding the requirements for obtaining a VAT (Value Added Tax) identification number within the European Union (EU).

Who needs an EU VAT ID number in the EU?

• If your business is not established in any EU country, you are required to obtain a VAT number upon making your first business-to-consumer (B2C) sale.
• If your business is established in an EU country (and nowhere else), you must obtain a VAT number if you meet either of the following conditions:
  • Your annual EU-wide delivery exceeds the threshold of 10,000€.
  • You store goods within an EU country.

If your situation does not fall under any of these categories, there is no legal obligation for you to register for a VAT number. However, it is highly recommended by VAT professionals as it offers numerous benefits for your business, which you can find detailed in our article on the Benefits of being VAT registered.

Where should I register for an EU VAT ID number?

The registration process for an EU VAT ID number depends on determining the Member State of Identification (MSI). The MSI is the Member State in which a taxable person is registered for using the One-Stop-Shop scheme and where they declare and pay VAT for the Member State(s) of consumption. Depending on whether you use the non-Union, Union, or Import Scheme, the appropriate MSI is determined, and you must fulfill the respective requirements for each scheme. If you don´t know which scheme to use visit OSS vs IOSS? Non-Union? post.

• Under the non-Union scheme, a taxable person who has neither established their business nor has a fixed establishment in the EU can choose any Member State as their MSI. The chosen Member State will assign an individual VAT identification number in the format EUxxxyyyyyz, which can only be used for declaring supplies under the non-Union scheme.
• For the Union scheme, the MSI is the Member State in which a taxable person has established their business. If the taxable person has not established their business in the EU but has a fixed establishment within the EU, the MSI is the Member State where the fixed establishment is located. If the taxable person has fixed establishments in different EU Member States, they have the option to choose one of those Member States as their MSI.
• The same criteria for the Union Scheme apply to the Import Scheme. The MSI will assign an individual IOSS VAT identification number in the format IMxxxyyyyyyz. If the taxable person is established outside the EU, they are required to appoint an intermediary to utilize the import scheme. The intermediary must be a taxable person established within the EU. However, if the taxable person is established outside the EU but in a third country with which the EU has a mutual assistance agreement for VAT recovery and conducts distance sales of imported goods from that third country, they are free to choose any Member State as their MSI without the need for an intermediary. If the person conducts distance sales of imported goods from other third countries, they must appoint an intermediary to use the import scheme.

Do you want to know which is the country with the easiest VAT registration in EU? Or the countries with the lowest VAT in Europe? For all these questions and more, ask our Free Online VAT and tax consultant in EU, who will solve all your accounting-related questions!