Example of distribution of products from stock

Your products are distributed to professionals in the European Union, Great Britain, Switzerland and Norway. Your products are stored in some of these countries and billed to your customers when ordering. You must charge VAT during these transactions. If you are not registered in the country of your customers, a fiscal representation will allow you to charge this VAT and therefore act legally.

General principles: Fiscal representation, registration obligations, distribution process...

Value Added Tax (VAT) is a general tax that applies, in principle, to any commercial activity including the production and distribution of goods or services. When a company is not registered in one of the countries where it carries out taxable transactions, it must set up a Fiscal Representation to be able to charge this mandatory tax to its customers.

VAT is a percentage calculated on the basic amount of the invoice, and applies to all levels of production and the distribution chain. It is declared in a VAT return where the VAT payable is offset by the VAT to be recovered. Finally, it is the end customer who pays VAT.

In EU member states the following transactions are subject to VAT:

  • Import of goods from non-EU countries
  • The sale of products from a stock located in another EU country
  • Invoicing of services physically located in another EU country

The Eori number: An important point!

The EORI (Economic Operator Registration and Identification) number is mandatory to import goods into the EU. The EORI number, created by Commission Regulation (EC) 312/2009, is used for the identification of economic operators and other persons in their relations with customs authorities.

This EORI number is not a VAT number.

COSMOPOLITE can help you get your EORI number.

The VAT return:

As soon as a company is registered for VAT, VAT returns will have to be completed and submitted to the local authorities.

It is possible to file quarterly VAT returns, but depending on the countries and the thresholds defined in each of them, a monthly VAT return may be required.

COSMOPOLITE specialises in setting up fiscal representation and obtaining VAT numbers in all EU member states as well as in Great Britain, Norway and Switzerland.

COSMOPOLITE, as a Fiscal representative, will apply any changes in VAT regulations as well as in European legislation, thus keeping you informed.

Have a question? Let us help you…

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