What is VAT, VIES and EORI

Who is the agent?

What is VAT, VIES and EORI? They are all regarding the subject of different taxes, such as tax on purchases and tax paid to the Government. Such tax is applied to purchase, making it extremely difficult to for the Government to collect these monies themselves. Plus in some cases the amount can be very small making it not only difficult but also impractical. Therefore they use the seller at the point of sale to collect it on their behalf. This process effectively makes the seller the tax collecting agent of the government; who in turn passes on the collected amounts to the government on a regular basis, normally every 3 months.

Where is it based?

VAT, VEIS and EORI are a European system of indirect taxation, and is payable on all purchases of end consumers within the EU. Businesses are not taxable and if they trade with other business’s or people outside of the EU there is no tax to be collected. Should non- EU citizens make purchases within the EU they will pay tax at the point of sale; however on their exit from the EU they are able to claim a refund of any taxes paid.

What is VAT?

VAT is value added tax; it is a tax on all purchases made by consumers anywhere within the EU. The amount of tax may vary from EU member state to EU member state and may even vary within the same state on different products and services. For example in Cyprus 19% is the standard VAT rate and 9% is the reduced rate on such things as restaurant and book sales, whilst 0% is paid on things such as basic food products and rent. Therefore any business wishing to trade within an EU member state must register themselves with the government, and will receive a unique VAT number in order to charge and later pay all taxes collected to the Government. It is imperative that businesses keep accurate records of all transactions in order to comply with legislation and submit records as required on a quarterly basis.

What is VIES?

In order to eliminate any abuse of cross border business within EU member states, VIES was introduced. VAT Information Exchange System or VIES for short, is a system in which if a business in one member state sells to a business in another member state there should be 0% tax paid. It is of course the seller’s responsibility to record and declare all such transactions within that time period including the business sold to and their VAT registration number.  To summarize, if you have a business that is located within the EU and you wish to trade across EU borders you will be required to register with VIES.

What is EORI?

EORI stands for Economic Operators Registration and Identification number.  It is worth noting that an economic operator can be only a natural person, legal person, or other person. EORI is a unique number given to an economic operator, who in the course of the business is involved in activities covered by customs legislation, and is recognised by all member states.

Who should get an EORI number:

– The person lodging the declaration should have an EORI number, thus for example the consignor or consignee EORI number is not needed depending on the declaration type lodged.

– For exit summary declaration (EXS) the one lodging the declaration will have to provide the EORI number. If the Carrier is lodging the declaration the Carrier will have to get an EORI number.

– For export declaration it is the exported and declarant who need the EORI number.

How to register.

If you think that you need to register for VAT and or VIES and or EORI, get in touch with one of our experts for free, they will be able to put your mind at rest and answer all of your questions and concerns, and they can help you through the entire process if you need. Click here to contact us.