When is VAT imposed
VAT, also referred to as Value Added Tax, is a tax that is charged on most goods and services that VAT-registered businesses provide. VAT rates are an obligatory payment, and the rate of VAT and taxation charged differs from one jurisdiction to another.
DeltaQuest can advise you on how to register your company for VAT. To learn more please view our VAT Registration Services page.
VAT explained
VAT is imposed when a company provides goods and services that are sold and purchased by customers within the European Union. The rate of VAT charged will inevitably differ in accordance with the country that the goods and services are located in. Each jurisdiction features its own rates and charges, and within the EU, each member state enforces its own VAT rates. In addition, when goods are imported into the EU, VAT will be applied accordingly. However goods and services that are exported outside of the EU are generally not charged VAT rates.
With regards to importation of goods into the EU, VAT will be applied accordingly to ensure a fair and competitive marketplace for the commercial distribution of goods and services. VAT is generally paid at the location of where the goods or services have been supplied.
VAT must be paid to the relevant authority of the company’s country of domicile. Every EU based company must register their business to pay their VAT, and in some circumstances, the VAT paid by the company can be claimed back. However this depends on the type of business in operation, the goods and services being sold, as well as the jurisdiction that the company operates in.
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