Navigating EU VAT can feel overwhelming, but Kintsugi makes it straightforward for businesses of all sizes. We offer a single, easy-to-use platform to manage sales tax and VAT across the US, Canada, and now Europe.
What You Need to Know About EU VAT
EU VAT vs. Sales Tax: Unlike the US, the EU uses a pure VAT (Value Added Tax) system. Businesses collect VAT from customers, then either deduct VAT they've paid on their own purchases (input VAT credits) or pay the collected VAT to the government.
Multiple Countries, One Solution: The EU has 27 countries, each with its own VAT rules. Depending on your sales, you might need to register in several. However, the One-Stop-Shop (OSS) scheme lets you register in just one EU country and file VAT returns for all your EU sales. This doesn't apply if you have a physical presence in another EU country.
Key Factors for VAT Rules: VAT rules depend on:
Your Business Location: Are you an EU-based business or a non-EU business?
Your Customer: Are you selling to a consumer or another business?
What You Sell: The type and price of your product or service.
EU vs. Non-EU Business:
EU Business: Your business is incorporated or has a physical presence within the EU.
Non-EU Business: Your business does not meet the EU business criteria.
When Do You Need to Register for VAT?
Physical Presence (Physical Nexus): If you have a physical location in an EU country, you must register for VAT there.
Sales Threshold (Economic Nexus): For sales to consumers (B2C), if your total EU sales reach EUR 10,000, you'll need to register in at least one EU country. At this point, you can choose to use the OSS scheme.
Your First EU Registration Country: Kintsugi typically starts your EU VAT registration in Ireland. This is due to its logistical ease and English language support. We can adjust this based on your specific sales patterns.
Input VAT Credits: If your business is based in the EU, you can claim back the VAT you pay on your business purchases. This is called an "input VAT credit”, and it reduces the total VAT you owe.
VAT Filings: Similar to the US and Canada, EU VAT filings have different frequencies based on the country and your registration type.
Exemptions: EU VAT exemptions work much like those in the USA and Canada. Kintsugi will likely use your existing exemption settings without needing changes.
How Kintsugi Simplifies EU VAT Compliance
Kintsugi takes the complexity out of EU VAT so you can focus on your business:
Automation: We automatically track multiple currencies, ensure accurate exchange rates, and calculate the correct VAT rates for your sales.
Registration Guidance: We identify which EU countries require your registration and guide you through the process.
OSS Scheme Management: If your business qualifies, we help you enroll in the OSS scheme, making your EU-wide filings simple.
Real-time Monitoring: We keep an eye on your sales thresholds and notify you when it's time to register for VAT.
Accurate Returns: We prepare precise VAT returns that meet all country-specific requirements.
Filing & Exemption Tracking: We monitor your filing statuses and manage your exemptions, keeping your records audit-ready and up-to-date.
Need Help?
We're here to assist you. If you can't find the answer you're looking for, please click the chat bubble in the bottom right corner of your screen to reach out.