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Value Added Tax

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Value Added Tax


When it comes to trading with the European Union, businesses often find it beneficial or necessary to register a Value Added Tax (VAT) number in the European Union (EU).

Nowadays, registration of EU VAT numbers becomes more and more challenging for non-European companies. Thus, many clients prefer to have a VAT-registered company in the European Union.

 

Benefits of Trading with VAT

International trade often involves more than 2 parties in different countries. A Client in one country may order goods from an intermediary, which sources the goods from the supplier directly to the client. Such movement of goods is called triangulation.
In order to zero rate the invoices involved in the scheme, the Intermediary Company must be registered for EU VAT. Otherwise, the Supplier charges full VAT at its local rate to the Intermediary Company.

Trading scenarios may also include more than one intermediary trader. Intermediary companies may be registered in the EU or outside EU. Contact us for correct application of specific triangulation rules.