Your company sells into Europe, imports goods, or invoices clients in several countries. Somewhere in that flow an international VAT compliance obligation has been triggered — and nobody in the organisation can say exactly where, when, or by whom it should have been filed.
That is the ordinary starting point of an international VAT compliance problem. It rarely announces itself. It surfaces two or three years later, in a letter from a tax administration, with interest and penalties already running, at the precise moment the group is raising funds, selling a subsidiary, or entering a new market.
This page explains how international VAT compliance actually works — registration, returns, invoicing, OSS and IOSS, imports, audits and disputes — and where an international VAT compliance lawyer changes the outcome rather than merely filing the paperwork.
What is international VAT compliance?
International VAT compliance is the set of obligations a business must meet when its transactions are taxable in countries other than its own: registering for VAT where required, charging the correct rate, issuing compliant invoices, filing returns and statistical or transactional reports on time, keeping the supporting evidence, and paying the tax due in each jurisdiction.
Three features distinguish international VAT compliance from purely domestic VAT work, and each of them is a source of risk.
First, the obligation follows the transaction, not the establishment. A company with no office, no staff and no bank account in a country can still be liable for VAT there. Physical presence is irrelevant; the place-of-supply rules decide.
Second, the rules are harmonised in the European Union but not identical. Directive 2006/112/EC sets the common framework, yet each Member State keeps its own rates, filing frequencies, deadlines, invoicing details, penalty regime and digital reporting format. A process that is perfectly compliant in Germany can be non-compliant in France.
Third, compliance is retrospective as well as prospective. Tax administrations look backwards. In France, the standard recovery period runs to the end of the third year following the year in which the tax became due — and considerably longer where an undeclared activity is found. The mistake you make this quarter is examined years later, in a very different commercial context.
International VAT meaning in practice
Clients often ask what “international VAT” actually is, as if it were a separate tax. It is not. There is no global VAT and no international VAT authority. What exists is a network of national VAT systems — more than 170 countries operate a VAT or GST — whose rules interact, overlap and occasionally contradict one another. “International VAT” is shorthand for the point where those systems meet: the cross-border supply, the import, the distance sale, the digital service delivered from one jurisdiction to a customer in another.
That is also why the question “how much is international VAT?” has no single answer. There is no international VAT rate and no international VAT amount. Each transaction is allocated to one jurisdiction, and that jurisdiction’s rate applies — 20% in France, 21% in the Netherlands and Belgium, 19% in Germany, 23% in Ireland, with reduced and zero rates layered on top and defined differently in each country.
Compliance and reporting are not the same obligation
Software vendors tend to blur the two. The distinction matters legally. Reporting is the transmission of data: the return, the recapitulative statement, the e-reporting file. Compliance is the underlying legal correctness of the transaction chain — the right VAT treatment, the right invoice, the right evidence, the right registration. A business can file every return on time and still be seriously non-compliant, because what it filed was wrong. Conversely, a substantively correct position filed late is a far easier file to defend.
Not sure which countries you are exposed in?
An international VAT compliance review of your flows — supplies, contracts, invoices, Incoterms, warehouses — usually identifies the exposure within days rather than months. I work directly with finance directors, in-house counsel and their advisers, in English, French or Dutch.
The core international VAT compliance obligations
Whatever the jurisdiction, international VAT compliance obligations fall into five families. A compliance checklist that does not cover all five is incomplete, whatever the software behind it.
1. VAT registration
Registration is triggered by an activity, not by a decision. Typical triggers for a foreign business include holding stock in a country, making domestic supplies there, importing goods in its own name, acquiring goods intra-EU, supplying goods with installation, organising events, or exceeding a distance-selling threshold. Many businesses discover the trigger after the fact — a warehouse contract signed by operations, a marketplace fulfilment programme activated by the e-commerce team, an Incoterm changed to DDP by a logistics provider.
Two points are consistently underestimated. Registration is normally retroactive to the date the obligation arose, not to the date of the application — so late registration means late returns, and late returns mean penalties. And registration in one Member State does not cover the others: VAT registration in multiple European countries means multiple filing calendars, multiple formats, multiple languages and multiple penalty regimes.
2. Invoicing
VAT invoice compliance is where cross-border files most often fail on audit. Beyond the mandatory particulars, three items decide whether an exemption survives scrutiny: the customer’s valid VAT identification number, verified at the time of supply; the legal mention justifying the treatment applied (reverse charge, intra-Community supply, export); and the sequence and integrity of the numbering. Invoicing requirements also diverge on self-billing, credit notes, currency and the language accepted by the local administration.
3. Returns and payment
Periodic returns are filed monthly, quarterly or annually depending on the country and the turnover, in a national portal, usually in the local language, with local payment instructions. Deadlines differ by country and rarely align. Payment and filing are separate obligations — and separately penalised.
4. Record keeping and evidence
The exemption or zero-rating you applied must be evidenced years later. For intra-Community supplies of goods, that means transport documentation capable of proving the goods physically left the Member State of departure. Exports require the customs export declaration and proof of exit. For services, evidence of the customer’s status and location. Retention periods run from six to ten years depending on the country and the type of document, and to ten years for records kept under the OSS and IOSS schemes.
5. Additional reporting
Periodic returns are only part of the picture. Depending on the country and the flow, a business may also owe recapitulative statements for intra-EU supplies, statistical declarations on the movement of goods, SAF-T files, local listings, and — increasingly — near-real-time digital reporting or structured electronic invoicing.
| Obligation | Typical trigger | Frequent failure point | Consequence |
|---|---|---|---|
| VAT registration | Stock, domestic supply, import, threshold | Trigger identified months or years late | Retroactive registration, late-filing penalties |
| Invoicing | Every taxable supply | Missing legal mention, invalid customer VAT number | Exemption denied, VAT reassessed on the supplier |
| Returns and payment | Registration | Local deadline missed, payment sent late | Surcharge and interest, both cumulative |
| Evidence | Exempt or zero-rated flows | Transport proof not retained | Exemption reversed on audit |
| Digital reporting | Local mandate | Format or platform not implemented in time | Fixed fines per invoice or per transmission |
EU VAT compliance: OSS, IOSS and multiple registrations
EU VAT compliance rests on a single directive — Council Directive 2006/112/EC, in its consolidated version — and twenty-seven implementations of it, and for most non-European groups it is the heaviest part of the international VAT compliance workload. The practical questions are always the same: do I register locally, use a one-stop shop, or both?
The EUR 10,000 threshold
Intra-EU distance sales of goods to consumers, and telecommunications, broadcasting and electronically supplied services to consumers, share a single EU-wide threshold of EUR 10,000 per calendar year, calculated across all Member States combined. Below it, a business established in one Member State may continue to charge the VAT of its own country. Above it — or by election — VAT is due in the customer’s Member State, at that country’s rate.
The One-Stop Shop (OSS)
The OSS allows those destination-country VAT liabilities to be declared in a single quarterly return, filed in one Member State, in one currency, with one payment, which the administration then redistributes. Its Union scheme covers EU-established businesses, and non-EU businesses for their intra-EU distance sales of goods; the non-Union scheme covers businesses established outside the EU supplying services to EU consumers.
The OSS is a declaration mechanism, not a registration exemption and not a recovery mechanism. It does not cover domestic supplies made from local stock, B2B supplies, or the movement of a company’s own goods between Member States. And input VAT incurred in a Member State cannot be deducted in the OSS return: it must be reclaimed through the refund procedure. Businesses that register for the OSS and cancel their local registrations often create the exposure they were trying to avoid.
The Import One-Stop Shop (IOSS)
The IOSS applies to distance sales of goods imported from outside the EU in consignments with an intrinsic value not exceeding EUR 150. VAT is charged to the consumer at the point of sale at the destination rate, declared in a monthly IOSS return, and the import itself is VAT-exempt on presentation of a valid IOSS number. Sellers established outside the EU generally need an EU-established intermediary, who becomes jointly liable — which is precisely why the intermediary agreement deserves to be read by a lawyer before signature.
The customs duty relief for consignments of EUR 150 or less was removed with effect from 1 July 2026 by Council Regulation (EU) 2026/382 of 11 February 2026, and replaced on a temporary basis by a flat customs duty of EUR 3 per tariff line — that is, per distinct item type identified by its six-digit HS subheading in the consignment, not per parcel and not per unit. Five identical shirts in one parcel attract a single EUR 3 charge; a shirt and a watch attract two. The measure applies until 1 July 2028, after which normal tariff classification and duty rates resume.
Two points matter commercially. The charge is a customs duty and changes nothing about VAT: import VAT remains due, and the IOSS continues to apply to VAT on consignments up to EUR 150. And the charge is owed by the declarant — the seller, the IOSS holder or its representative — not collected from the consumer, so it lands directly in the landed-cost calculation of anyone shipping small parcels into the EU.
When the one-stop shops are not enough
Local registration remains necessary whenever goods are stored in a Member State, sold B2B locally, imported in the company’s own name, or moved between the company’s own warehouses in different Member States. In practice, most e-commerce groups of any size operate a hybrid: OSS for cross-border B2C, plus local registrations wherever there is stock.
Non-EU businesses selling into Europe
A US, UK, Swiss or Asian company with no EU establishment can be liable for EU VAT from its first taxable transaction. There is no de minimis for a non-established business making domestic supplies. Depending on the Member State, it may also need a fiscal representative who is jointly and severally liable for the tax — a serious commercial commitment that shapes which country a group should use as its EU entry point.
The direction of travel is towards further centralisation: the VAT in the Digital Age package adopted by the Council on 11 March 2025 extends the one-stop shops and the reverse charge from 2028, imposes digital reporting and structured e-invoicing for intra-EU transactions from 2030, and requires full alignment of national systems by 2035. Structural decisions taken today — where to hold stock, which entity imports, which country hosts the EU registration — should be made with that timetable in view.
French VAT compliance for foreign companies
France is one of the least forgiving jurisdictions in the European Union for a non-established business, and it is the jurisdiction in which I practise daily, before the tax administration and before the courts. For any group entering the French market, four points shape the entire international VAT compliance position.
No threshold, and registration is retroactive
A business not established in France has no registration threshold: the obligation arises with the first taxable transaction carried out in France. French VAT registration for foreign companies is handled by the dedicated service for foreign businesses within the tax administration, and the number obtained is effective from the date the obligation arose. Returns then have to be filed for every period since that date, with the corresponding surcharges — which is why a voluntary, properly framed regularisation is almost always cheaper than waiting for a letter.
Fiscal representative or tax agent
Under article 289 A of the French Tax Code, a business established outside the European Union that becomes liable for VAT in France must have an accredited fiscal representative established in France, who undertakes to complete the formalities and is liable for the VAT due. The requirement falls away where the business is established in a State that has, with France, a mutual assistance instrument of scope equivalent to Directive 2010/24/EU and Regulation (EU) No 904/2010. Those States are listed exhaustively by the ministerial order of 15 May 2013, last amended in February 2021: some forty States, including the United Kingdom, Norway, Japan, Australia, India, Mexico, South Korea and South Africa, whose businesses register directly and file without a representative.
A business established anywhere else — the United States, Switzerland, China and Singapore among them — cannot register in France without one. EU-established businesses never need a representative, but may appoint a tax agent to handle formalities. The two roles carry very different liability: see the firm’s page on the role of a French VAT lawyer for foreign companies.
Import VAT is reverse-charged — automatically
Since 1 January 2022, import VAT in France is automatically and compulsorily reverse-charged on the VAT return. It is no longer paid to customs. Any business acting as importer of record in France therefore needs a French VAT number and must file French returns — including businesses that previously imported through a customs agent and assumed they had no French obligation.
The return is pre-filled by the administration from customs data. That pre-filled figure is a starting point, not a guarantee: it reflects what was declared at import, correct or not. Reconciling it against the customs declarations, the commercial invoices and the customs valuation is a monthly control — and where the figures diverge, the dispute quickly becomes as much a customs matter as a VAT one. The firm handles both, through its customs law practice.
Electronic invoicing: the French timetable
France’s e-invoicing reform entered its first phase on 1 September 2026: from that date every business established in France must be able to receive structured electronic invoices, while large and mid-sized enterprises must also issue them and comply with e-reporting. Small and micro enterprises follow on 1 September 2027. Invoices are exchanged through approved platforms in structured formats, and the administration has indicated a pragmatic approach to businesses acting in good faith during the transition.
The obligation to issue electronic invoices targets businesses established in France. A company that is merely VAT-registered in France, without an establishment, is not brought into the e-invoicing mandate on the same footing, and the e-reporting obligations applicable to non-established taxable persons have been deferred to September 2027. Two practical consequences: first, a French VAT number alone does not create an obligation to issue e-invoices; second, a French establishment created for operational reasons may create one. Where a group has a branch, a warehouse with staff, or a fixed establishment in France, the analysis should be documented rather than presumed — the existence of a fixed establishment is itself one of the most frequently litigated questions in French VAT.
Rates, filings and deadlines
The standard French rate is 20%, with reduced rates of 10%, 5.5% and 2.1% applying to defined categories. Returns are generally filed monthly, with a quarterly option below a turnover ceiling, on dates that vary according to the taxpayer’s situation. Recapitulative statements for intra-EU supplies of goods and services are filed separately. French VAT incurred by a business that is not registered in France is recovered not through a return but through the refund procedures — see the firm’s guide to the international VAT refund procedure.
Selling into France, or already registered and unsure?
Whether the question is registration, fiscal representation, import VAT, a fixed-establishment risk or a letter already received from the administration, the first step is the same: establish the exact position before anyone files anything further. I act for foreign companies in English, French and Dutch, from Paris and Rotterdam.
International VAT compliance for e-commerce and marketplaces
Cross-border e-commerce concentrates every difficulty described above into a single business model: many small transactions, many countries, stock held by third parties, and a platform that changes the rules by changing a setting. International VAT compliance for online sellers is therefore less a filing exercise than a question of knowing, at any moment, where the goods are and who is deemed to supply them.
Where the stock is decides where the VAT is
For marketplace sellers, the decisive fact is rarely the customer’s location — it is the location of the inventory. A pan-European fulfilment programme can move stock between countries automatically, each movement being a transfer of own goods that requires registration in the country of arrival. Sellers routinely discover, during an audit, that they have held stock in three or four Member States for years without a single local registration.
Deemed supplier rules
Where an electronic interface facilitates certain sales — notably distance sales of imported goods in consignments up to EUR 150, and supplies within the EU by non-EU established sellers — the platform is treated as if it had bought and resold the goods, and accounts for the VAT. This does not extinguish the seller’s own obligations: the underlying supply to the platform must still be reported correctly, and the seller remains responsible for its own registrations, invoices and records. “The marketplace handles VAT” is a description of one leg of the transaction, not a compliance strategy.
Digital products and subscriptions
Software, SaaS, online courses, downloads and streaming supplied to EU consumers are taxable where the consumer is located, from the first euro once the EUR 10,000 threshold is passed, with evidence of the customer’s location to be retained. For a business selling worldwide, the same analysis then has to be repeated outside the EU, where an increasing number of countries operate their own registration regimes for non-resident digital suppliers.
- Where is stock physically held, today and over the last four years?
- Which entity is the importer of record, and under which Incoterm?
- Is the OSS return reconciled to the platform’s transaction reports, country by country?
- Are marketplace-facilitated sales excluded from your own output VAT, and documented as such?
- Do invoices and order confirmations show the correct destination rate and legal mentions?
- Is location evidence for digital supplies retained in a retrievable form?
Imports, customs and VAT: one flow, two bodies of law
Import VAT is calculated on the customs value increased by duties and certain costs. It follows that a customs valuation error is automatically a VAT error, and that a tariff classification dispute changes both the duty and the tax. Yet in most organisations customs sits with logistics and VAT sits with finance, and the two datasets are never reconciled.
That gap between customs data and tax data is where import-driven international VAT compliance failures originate. Three questions decide the outcome of an import VAT file:
- Who is the importer of record? Only the person designated as importer and holding the right to dispose of the goods can deduct the import VAT. A DDP Incoterm accepted without analysis can make a foreign seller the importer in a country where it is not registered — the single most common cause of unrecoverable import VAT.
- Is the customs value right? Royalties, assists, transport costs, subsequent price adjustments and transfer-pricing corrections all affect the value, and therefore the VAT base. Retroactive transfer-pricing adjustments are a recurring source of assessments.
- Does the documentation trail hold together? Customs declaration, commercial invoice, transport document and VAT return must tell the same story. Where they do not, the administration reconstructs the story itself.
Special procedures — customs warehousing, inward processing, temporary admission — can suspend both duty and import VAT, but each carries its own authorisation conditions and record-keeping obligations, and a breach can crystallise the whole suspended amount at once. Because the French customs code was entirely renumbered with effect from 1 May 2026, any internal procedure manual or contract still referring to the former article numbering should be reviewed.
Low-value consignments since July 2026
For businesses shipping small parcels to EU consumers, the duty position changed on 1 July 2026. The flat charge of EUR 3 per tariff line applies to goods in consignments of EUR 150 or less sold through distance selling, whatever the VAT scheme used — IOSS, the special arrangements for import, or standard VAT accounting. It is not an IOSS-only charge, and using the IOSS does not avoid it.
Where the goods claim preferential origin under a trade agreement, or benefit from customs union measures, and the VAT has not been collected through the IOSS, the consignment falls outside the flat charge and is declared in the standard customs data set, with duty calculated under the normal tariff. The practical consequence is that two shipments of identical goods can carry very different duty outcomes depending on the VAT scheme and the declaration used — which makes the choice of scheme a duty decision as much as a VAT one. Product identifier data required with these declarations became mandatory on 1 November 2026. The European Commission’s guidance and legal text on the temporary flat fee for low-value imports sets out the detail.
Cross-border services: B2B, B2C and digital supplies
For services, the general rules are deceptively simple. Business-to-business services are in principle taxable where the customer is established, with the customer accounting for the VAT under the reverse charge. Business-to-consumer services are in principle taxable where the supplier is established. The difficulty of international VAT compliance for service providers lies almost entirely in the exceptions and in the evidence.
Proving the customer’s status
Applying the reverse charge to a B2B customer requires a valid VAT identification number, verified and, ideally, evidenced at the date of supply. If the number was invalid, the supplier — not the customer — bears the VAT. A verification performed once at onboarding and never repeated is a weak defence three years later.
The exceptions that catch service providers
Services connected with immovable property are taxable where the property is located, regardless of the parties’ establishments — a rule that regularly obliges foreign construction, engineering, real-estate and facility-management businesses to register locally. Admission to events, restaurant and catering services, short-term hire of means of transport, and passenger transport each follow their own rules.
Fixed establishments
A structure that is not a subsidiary can still be a fixed establishment for VAT purposes if it has a sufficient degree of permanence and the human and technical resources to receive or make supplies. The characterisation changes who is liable, whether the reverse charge applies and where the VAT is due, and it is actively litigated before national courts and the Court of Justice of the European Union. Any group with local staff, a warehouse it controls, or a long-term contractor acting exclusively for it should have the question analysed — ideally before an inspector raises it.
Penalties, audits and disputes: where international VAT compliance really bites
This is the part of international VAT compliance that providers describe in a single line as “audit support”, and it is the part that determines what the file finally costs.
What non-compliance costs in France
| Situation | French sanction | Legal basis |
|---|---|---|
| Late payment of tax | Late-payment interest of 0.20% per month (2.4% per year) | Art. 1727 CGI |
| Return filed late | 10% surcharge; 40% if not filed within 30 days of a formal notice; 80% where an undeclared activity is found | Art. 1728 CGI |
| Inaccurate return, deliberate breach | 40%; 80% for abuse of law or fraudulent conduct | Art. 1729 CGI |
| Declared VAT paid late | 5% surcharge on the sums paid late | Art. 1731 CGI |
| Undeclared activity | Recovery period extended to ten years | Livre des procédures fiscales |
Interest and surcharges are cumulative, and they are calculated on the reassessed VAT — including VAT that the business would have been entitled to deduct had it registered on time. That asymmetry is what turns a technical oversight into a material liability, and it is why the difference between a 10% surcharge and a 40% penalty, which turns on the characterisation of intent, is worth arguing properly.
What a VAT compliance check actually looks like
A VAT audit rarely begins with an inspection. It begins with a request for information — an apparently routine letter asking for invoices, contracts, transport documents or an explanation of a ratio. The answer given to that first letter frames everything that follows, because it fixes the factual narrative the administration will work from.
In France, the sequence then typically runs: request for information, then a written proposal of reassessment, to which the taxpayer has thirty days to respond — extendable by a further thirty days on request, a right that is lost if not exercised in time. The administration replies; escalation to the inspector’s superior and then to a departmental interlocutor is possible; the tax is formally recovered; a contentious claim may be lodged; and, if rejected, the matter goes to the administrative court, then to the administrative court of appeal and ultimately to the Conseil d’État. Payment can be suspended during the claim, generally against guarantees.
1. The content of the first written answer. 2. The decision to accept or contest the proposed reassessment within the response period. 3. Signing a settlement, which closes the penalty discussion for good. Each is taken early, often by someone without the file’s full legal picture, and each is very difficult to unwind afterwards.
Who bears the cost of someone else’s mistake?
When a compliance provider files an incorrect return, the tax administration assesses the taxpayer, not the provider. Recovering the loss from the provider is a separate contractual action, governed by the engagement terms — which typically contain liability caps, exclusions of indirect loss and, sometimes, an exclusion for advice. Reading those terms before the assessment arrives, rather than after, changes what can be recovered. Where a fiscal representative is involved, the joint liability runs the other way too: the representative will seek indemnity from the client, and its contractual position is usually the stronger of the two.
Legal privilege
There is one difference that no software licence and no service agreement can replicate. Correspondence with a lawyer, and the analysis a lawyer produces, are covered by professional secrecy. An internal memorandum written by a consultant identifying an exposure is a document that can end up in the file. When a business asks the question that matters — “how bad is our historic position, and what happens if we regularise?” — the identity of the person answering determines whether the answer can be used against it.
Lawyer, consultant or software: how to choose
The honest answer is that most international groups need more than one of the three. The mistake is to ask one of them to do another’s job — and providers are rarely the ones to say so.
| Software | Compliance provider / accountant | Lawyer | |
|---|---|---|---|
| Calculating and filing at volume | Yes | Yes | Not its purpose |
| Local registrations and routine formalities | Partially | Yes | Yes, where structuring is involved |
| Deciding a contested VAT treatment | No | Sometimes | Yes |
| Assessing historic exposure before regularising | No | Risky — no privilege | Yes |
| Professional secrecy over the analysis | No | No | Yes |
| Answering a proposal of reassessment | No | Limited | Yes |
| Representation before the tax courts | No | No | Yes |
| Contract, Incoterm and liability drafting | No | No | Yes |
A sensible allocation of international VAT compliance work is: software for determination and data, a compliance provider for volume filing, and a lawyer for the positions, the structure, the historic exposure and anything adversarial. The signals that a file has left the provider’s territory are recognisable — a letter from an administration, a question about years already filed, a fixed-establishment issue, an Incoterm or contract to renegotiate, a dispute with a representative or platform, or a transaction in which a buyer’s due diligence is about to examine your VAT position.
How I work, and what it costs
I am an avocat at the Paris Bar in independent practice, working on international VAT compliance for foreign companies, e-commerce groups and multinationals. Clients deal with me directly: the person who analyses the file is the person who signs the submissions and who appears before the administration and the courts.
A typical engagement
- Initial call. Facts, flows, countries, documents already exchanged with any administration, and whether a deadline is running. Covered by professional secrecy, and without obligation.
- International VAT compliance diagnostic. A written analysis of the position: which obligations exist, in which countries, since when, what the quantified exposure is, and what the realistic outcomes are.
- Decision. Regularise, restructure the flow, contest, or negotiate — with the consequences of each set out, including cash impact and timing.
- Execution. Registrations and filings, voluntary disclosure, responses to the administration, contentious claims, litigation, or the drafting of the contracts and terms that prevent the situation recurring.
Fees
Fees are agreed in writing before any work begins, in a fee agreement setting out the scope, the basis and an estimate. Three formats are used, alone or in combination: a fixed fee for a defined deliverable, such as a diagnostic or a registration file; an hourly rate for open-ended matters, with a capped estimate; and an annual retainer for groups needing continuous access to counsel across several countries. No fee is ever charged on a percentage of the tax at stake alone, and the estimate is revised with the client before any material change.
Start with the facts, not with a filing
Most international VAT compliance files arrive in one of three states. If you have a letter from a tax administration, an exposure you suspect but have not quantified, or a launch into Europe that has to be structured properly the first time, the useful next step is a confidential conversation.
Cabinet Nicolas Avocat — 11 boulevard Sébastopol, 75001 Paris · Rotterdam office · [email protected]
International VAT compliance FAQ
What is international VAT compliance, in one sentence?
International VAT compliance is the set of obligations a business must meet when its transactions are taxable in countries other than its own: registering for VAT where required, charging the correct rate, issuing compliant invoices, filing returns and reports on time, keeping the supporting evidence, and paying the tax due in each jurisdiction.
Do I need to charge VAT on invoices to overseas customers?
It depends on what you supply, to whom, and where the supply is located under the place-of-supply rules. Exports of goods outside the EU are generally zero-rated where you can prove the goods left. B2B services to a business customer in another country are usually taxable in the customer’s country under the reverse charge, so you invoice without VAT but with the correct legal mention and a verified VAT number. B2C sales frequently require you to charge the destination country’s VAT — and sometimes to register there. The label “overseas customer” alone never determines the answer.
Does VAT apply to international sales?
Yes, but rarely the VAT of your own country. Cross-border supplies are allocated to one jurisdiction by the place-of-supply rules, and that jurisdiction’s rules apply — its rate, its registration requirements and its filing obligations. A sale can be exempt or zero-rated at your end and fully taxable at the other end, with the obligation falling on you, on your customer, or on the platform that facilitated the sale.
What are the penalties for not complying with international VAT rules?
The penalties combine interest and surcharges, and they are cumulative. In France, late-payment interest runs at 0.20% per month, a late return attracts a 10% surcharge rising to 40% if it is still not filed within thirty days of a formal notice, deliberate breaches attract 40% and fraudulent conduct or an undeclared activity 80%, with the recovery period extended to ten years in the latter case. Penalties are calculated on the reassessed VAT, which is why an unregistered position can produce an assessment far larger than the tax that would ever have been payable had the business registered on time.
How do I register for VAT in multiple European countries?
Each Member State has its own procedure, forms, supporting documents and language requirements, and registration is generally effective from the date the obligation arose rather than the date of filing. The practical sequence is: map the flows to identify where an obligation exists and since when, quantify the historic position before filing anything, decide whether the exposure should be regularised voluntarily, then file the registrations with a coherent story across all countries. Registering in one country in a way that contradicts your position in another is a common and avoidable error.
What is a VAT compliance check?
It is the administration’s verification that your declared VAT matches your actual transactions. It usually starts with a written request for information about specific invoices, exemptions or ratios, and can escalate to a full audit with a proposal of reassessment. The response to the first letter frames the whole file: it fixes the factual narrative and, in practice, the range of possible outcomes.
Do foreign companies need a fiscal representative in France?
A business established outside the European Union that is liable for French VAT must in principle appoint an accredited fiscal representative, jointly liable for the tax, unless it is established in a country that has mutual assistance arrangements with France and appears on the list published by ministerial order. EU-established businesses do not need one, but may appoint a tax agent to handle formalities. The two arrangements carry very different liability profiles and should not be treated as interchangeable.
Does the OSS mean I no longer need local VAT registrations?
No. The OSS covers cross-border B2C supplies only. If you hold stock in a country, make domestic or B2B supplies there, import in your own name, or move your own goods between Member States, local registration remains necessary. The OSS also cannot be used to deduct local input VAT, which has to be reclaimed through the refund procedure.
Is there VAT on international flights?
In most cases no VAT is charged on international air passenger transport: France, like many Member States, exempts international and intra-EU air transport of passengers. Domestic flights may be taxed, and airport charges, in-flight sales and ancillary services follow their own rules, so an itemised ticket can carry different treatments on different lines.
Is there VAT on foreign transactions between group companies?
Intra-group services crossing a border are supplies for VAT purposes and are treated like any other B2B supply, normally reverse-charged by the recipient. Management charges, cost-sharing arrangements, secondments and recharges of third-party costs each require analysis, and retroactive transfer-pricing adjustments can alter both the VAT base and, for goods, the customs value already declared.
What are the biggest challenges of managing VAT compliance globally?
Four challenges recur in every file: fragmentation, because deadlines, formats and rules differ in every country; data quality, because the returns can only be as good as the ERP that feeds them; speed of change, with digital reporting and e-invoicing mandates arriving country by country; and ownership, because VAT sits between finance, tax, logistics and IT, and the decisions that create exposure — an Incoterm, a warehouse contract, a platform setting — are usually taken by people who never see a VAT return.
When should I involve a lawyer rather than my accountant or compliance provider?
When the question is contested, historic or adversarial: a letter from an administration, an exposure over years already filed, a fixed-establishment or import-VAT dispute, a contract or Incoterm to renegotiate, a disagreement with a fiscal representative or platform, or a transaction in which a buyer’s due diligence will examine your VAT position. Those matters require a legal position, professional secrecy over the analysis, and the ability to represent you before the administration and the courts.