VAT Registration Requirements for Non-Residents (Amazon seller and noon)
Who is a Non-Resident for VAT Purposes?
A non-resident, in the context of VAT, refers to a business or individual that does not have a fixed establishment, place of business, or residence in the country where VAT is applicable. Despite the lack of a physical presence, non-residents may still have VAT obligations if they engage in taxable supplies within the jurisdiction.
Key Conditions for VAT Registration for Non-Residents
- Provision of Taxable Supplies
- Non-residents must register for VAT if they provide taxable goods or services within the jurisdiction.
- The threshold for VAT registration often differs for non-residents, with many countries applying a zero-threshold policy, meaning that even a single taxable transaction can trigger registration, also there is no a turnover for the non-resident. 30 days time frame they have from the first supply to apply.
- Importing Goods
- If a non-resident business imports goods into the VAT jurisdiction, they may need to register for VAT to account for the tax on import activities.
- Provision of Digital Services
- With the growth of the digital economy, many countries have introduced VAT rules specifically for non-resident businesses providing digital services, such as streaming, software downloads, and online courses.
- Reverse Charge Mechanism
- In certain cases, the reverse charge mechanism applies, transferring the VAT obligation to the recipient of the goods or services. However, if this mechanism does not apply, the non-resident must register for VAT.
Process of VAT Registration for Non-Residents
- Application Submission: Complete the VAT registration application with the local tax authority.
- Appointment of a Tax Representative: In some jurisdictions, non-residents must appoint a local tax agent.
- Provision of Documentation: Submit necessary documents, including proof of business activities, identification documents, and financial records.
- VAT Identification Number (VATIN): Upon approval, the tax authority will issue a VATIN for compliance and reporting purposes.
Compliance Obligations After Registration
Non-resident businesses must adhere to the same VAT compliance requirements as resident businesses. This includes:
- Issuing VAT-compliant invoices.
- Filing periodic VAT returns.
- Maintaining accurate records of transactions.
- Paying VAT liabilities within the prescribed deadlines.
