Usually an EU VAT registration for an EU-company is required when this company is selling goods across EU borders directly to consumers who ordered via internet or catalogues for example – that is known as “distance selling”. Distance selling is possible for Non-EU-companies as well!
In order to help to reduce the administrative burden on companies and, furthermore, to encourage companies to start trading across the European Union, there are national VAT registration thresholds set by each country which can enable companies to sell within Europe without paying any VAT at all, according to the annual turnover.
For example, when you are selling your goods from a warehouse in Spain to customers all over Europe, the VAT registration is only necessary if the annual threshold limit of the country of import is reached. Threshold Limit United Kingdom: when importing to the UK for example, the annual threshold limit is about 85 500 USD.
Threshold Limit United Kingdom
| In local currency | In USD | |
| United Kingdom | 70 000 GBP | ~85 500 USD |
If a foreign company is selling below the corresponding thresholds, it does not need to be registered for a VAT number. Once over these limits within the same calendar year, it must apply for a EU VAT number and it is highly recommended to do so. The good news is that you will not have to step up any foreign subsidiaries. Keep in mind that currently there is no single EU VAT number for FBA sellers of goods. In case of reaching the threshold in different countries you have to consider to register in these different countries.
There is an initial experiment with a single EU VAT registration for providers of e-services to EU consumers since the start of 2015. This may be extended to goods and FBA sellers at some point in the future.
