EU VAT Directive Compliance

The aim of Directive 2002/38/EC is to harmonize the competitive advantages between EU-based and non EU-based businesses with regards to VAT (Value Added Tax) collection.

The directive aims to achieve:

  • Effective VAT Management
  • Compliance with EU Council Directive 2002/38/EC in force July 2003
  • Maintaining Competitiveness

The new regulations stipulate the following:

1. EU business selling to an EU private customer (EU-B - EU-C)
EU-B must collect VAT at rates between 15-25%, depending on location of EU-B
2. EU business selling to another EU business (EU-B - EU-B)
EU-B must not collect VAT - EU-B will pay VAT using self-assessment
3. Non EU business selling to an EU private customer (NonEU-B - EU-C)
Non EU Businesses are now required to register a company within an EU jurisdiction and collect VAT at the rates approved in that jurisdiction (see No. 1 above)
4. Non EU business selling to an EU business (NonEU-B - EU-B)
NonEU-B must not collect VAT. However, non EU businesses will need an automated, real time method of determining the validity of the VAT information provided by EU-B
5. EU business selling to a non EU private customer (EU-B - NonEU-C)
EU-B must not collect VAT
6. EU business selling to a non EU buisiness (EU-B - NonEU-B)
EU-B must not collect VAT

Endeavour IBS is offering a complete package that allows non EU-based companies to comply with these new directives, and maintain their competitiveness without the incumbent administration overheads.

The package consists of:

  • The Endeavour Payment Gateway Solution (EPG) - operated through banks in Malta, Ireland and Cyprus
  • Registration in Malta or other EU jurisdictions - in particular, Malta has one of the lowest VAT rates in the EU at 18%
  • Automatic VAT Number Validation to determine VAT compliance in real time

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