Can I register for VAT if my turnover is below the threshold?

Can I register for VAT if my turnover is below the threshold?

VAT identification number

In 2021, several substantial changes were made to the rules for the collection of VAT on items imported into the UK and the EU, as well as on certain shipments within the territory of the EU and the UK.

For items imported into the UK, VAT will be levied on imports and, in certain cases, customs duties. The rate of VAT applicable on importation will be the same as that which would apply if the items were supplied in the UK.

When importing items into the EU, import VAT and, in certain cases, customs duties apply. The rate of VAT applicable on importation will be the same as that which would apply if the items were supplied in the country of importation.

Effective July 1, 2021, the EU will introduce substantial changes to the process of collecting VAT on imports into the EU, shipments within the EU by non-EU sellers and international shipments from EU sellers.

Self-recovery of vat

In most EU countries, some businesses can apply for a special scheme that allows them to trade under certain conditions without incurring VAT. If your company makes taxable supplies of goods or services below a certain annual limit, it may be exempt from VAT. In that case, you will not have to pay VAT to the tax authorities, but you will not be able to deduct input VAT or include the tax on invoices. If you prefer, you can voluntarily opt for the normal VAT regime: if so, you will have to pay VAT, but you will also be able to deduct input VAT accordingly.

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*Euro reference exchange rates published by the European Central Bank on March 23, 2018 (except Romania, where the thresholds expressed in RON are based on the euro values for special schemes at the exchange rate on the date of accession, i.e. 1.1.2007).

Intra-community acquisition

Most of the commercial operations between companies are taxed with VAT at international level, however there are notable differences if the operation has to do with a country, which belongs to the European Community (Intracommunity VAT) or if on the contrary it does not belong to this one (International VAT).

Intracommunity VAT applies to all transactions carried out within the European Union, with a different taxation for the supplier and the receiver of the product or service, always a natural or legal person.

If the natural or legal person established as the invoice issuer or receiver is not included in the ROI (register of intracommunity operators), the invoice must be invoiced with VAT, in this case the receiver of the invoice will have the VAT rate of the country of origin applied and will not be able to deduct it, what can be done is to request the refund in the Treasury belonging to the country of the country issuing the invoice.

The tax rate by which VAT is calculated in these transactions in general cannot be less than 15%, however the countries of the European Union allow up to two reductions of no less than 5% in products or services.

Registration of intra-community operators

New VAT rules for online shopping in the European Union that come into force this Thursday will simplify life for traders and introduce more transparency for consumers.

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While the new rules fundamentally change how online businesses in the EU treat VAT, they will bring countless benefits by facilitating business, reducing fraud and improving the consumer experiences of online shoppers in the EU.

These new rules for goods imported into the Union by non-EU businesses are part of efforts to ensure a more level playing field for all businesses, simplify cross-border e-commerce and introduce greater transparency for EU shoppers in terms of pricing and choice.