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Fiscal Representation

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Brexit has changed how EU member states interact with the UK. Please consult with your tax adviser on how Brexit has impacted your tax situation.

Note 

Note

  • The term "Fiscal Representation" is often shortened to "Fiscal Rep".
  • Avalara AvaTax is a tax compliance solution that automates the complexities of calculating sales tax, VAT, and GST. Please ask your Customer Account Manager about Avalara AvaTax and how it can help with your VAT calculations.

Certain tax authorities do not allow businesses that are not based within their country to register directly for VAT. Instead, the tax authority insists that these businesses use a local representative for their VAT registration. These local representatives are termed, fiscal representatives.

The use of fiscal representatives is prevalent within the EU as a majority of EU member states insist that businesses from outside of the EU, and sometimes even from other EU member states, must use fiscal representatives for VAT registration.

What is a fiscal representative?

A fiscal representative is a company that resides in the country where VAT registration is required. The fiscal representative often has to be approved by the local tax authority to perform this service. The role of the fiscal representative is to represent the non‐resident company in VAT matters. As the two companies will share joint liability for any tax or penalties that might be due, fiscal representatives often require some sort of bank guarantee or monetary deposit. This guarantee will remain in place for the period of the trading and some period thereafter, in case the tax authority later finds compliance issues or outstanding liabilities. The fiscal representative will also want to reduce any potential liability issues by ensuring that their customers are fully VAT compliant, they often ensure this by requesting frequent audits.

Do I need a fiscal representative?

In the majority of EU countries, non‐EU businesses must appoint a VAT fiscal representative. EU businesses trading in other EU countries often do not have to appoint a fiscal representative and can either manage compliance themselves or use a VAT agent.

See also

Avalara Fiscal Representation
Learning VAT Home
VAT Product Home

EU VAT Directive

 

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