Value-added tax (VAT) registration can feel deceptively straightforward: you fill in a form, receive your number, and start charging the tax. But there are layers of country-specific rules, financial thresholds, recordkeeping obligations, and choices of scheme that can materially affect your business. Below, we’ll discuss what VAT registration requires, the decisions you’ll need to make as a business owner, and what changes once you’re registered.

What’s in this article?

• What is VAT registration?
  
• When is VAT registration required?
  
• What documents and business details are necessary to register for VAT?
  
• How do businesses register for VAT and what schemes can they choose from?
  
• What happens after you register for VAT?
  

What is VAT registration?

VAT registration is the process of formally notifying a tax authority that your business is responsible for charging and collecting VAT on your sales.

Once you register, you receive a VAT number, which is essentially a tax ID for VAT purposes. From that point on, you’re expected to:

• Add VAT to the prices of most goods and services you sell
  
• Issue VAT invoices to customers
  
• Regularly file VAT returns
  
• Keep detailed records of your sales, purchases, and VAT collected
  

In many cases, registration is mandatory once your revenue exceeds a certain threshold. But some businesses voluntarily register even before then, especially if they work with VAT-registered clients or want to reclaim VAT on their business expenses. VAT registration affects how you set prices, report, and operate, and it can also signal to partners and customers that you’re running a well-established business.

When is VAT registration required?

Most jurisdictions use some version of a revenue-based threshold to dictate when you need to register for VAT. Once your annual taxable turnover exceeds that threshold, registration becomes mandatory. However, some countries require registration regardless of turnover. For example:

• In the UK, businesses must register when their taxable turnovers exceed £90,000 in a rolling 12-month period.
  
• In South Africa, businesses must register when their taxable turnovers exceed 1 million South African rand (ZAR) in a rolling 12-month period.
  
• In Brazil, there is no threshold. Any business that makes taxable sales must register.
  

EU member states each have their own thresholds for domestic businesses. There is also a region-wide threshold of €10,000, below which EU businesses pay VAT only in the country where they’re established. Above that threshold, businesses must start paying VAT in every country where they sell.

There is usually no threshold for non-resident businesses, meaning registration is required from the first sale. Foreign businesses typically have to register for VAT before they exceed a turnover threshold if they are:

• Operating as a non-resident business that sells into a VAT country
  
• Importing goods into another country
  
• Opening a local warehouse or holding inventory in a foreign jurisdiction
  
• Selling digital products or services to customers in other countries
  

In practice, this means businesses with international reach – especially e-commerce platforms, software-as-a-service (SaaS) providers, and marketplace sellers – often end up managing multiple VAT registrations across different countries, each with its own rules and obligations.

What documents and business details are necessary to register for VAT?

VAT registration requires a complete, accurate application. Most tax authorities ask for a similar core set of information to verify your business identity, assess your liability, and determine how your tax obligations should be tracked. The exact details vary across jurisdictions, but tax authorities generally want to confirm that you're a legitimate business entity and that your activities fall within VAT's scope. Here's what that application normally includes.

Basic business information

• Legal name of the business
  
• Business structure (e.g., sole trader, partnership, corporation)
  
• Company registration number or incorporation details
  
• Registered business address
  
• Trading name(s), if different from the legal name
  
• Contact details for the business, primary representative, or both
  

Tax and banking details

• National tax identification number (if applicable)
  
• Business bank account information (for VAT refunds or payments)
  
• Details of any previous tax registrations, especially if you're migrating from another VAT regime
  

Activity-related documentation

• Description of your business activities and the sectors you operate in
  
• Start date of taxable activity
  

Supporting documentation

Depending on the country, you might also need to submit:

• Proof of business registration, incorporation, or trade licence
  
• Copies of contracts, invoices, or purchase orders
  
• Identification documents for directors, owners, or legal representatives
  

How do businesses register for VAT and what schemes can they choose from?

Before you start the application process, you should choose your preferred VAT scheme. Most jurisdictions offer a few options, each of which has its own trade-offs. Here are some common schemes:

• Standard or accrual-based VAT: You report VAT based on invoice dates. This is the default in many countries.
  
• Cash accounting: You report VAT once the customer pays you. This is useful for managing cash flow, especially for businesses with longer payment terms.
  
• Flat rate or simplified schemes: Instead of calculating VAT on every transaction, you apply a fixed percentage to your gross sales. These schemes are typically available to small businesses with revenue below a certain threshold.
  
• Margin schemes (in specific industries): If you work in second-hand goods, travel services, or a similar sector, you might be required to pay VAT only on your profit margin rather than the full sales price.
  

The scheme you pick shapes how you track revenue, manage invoices, and handle reporting. Not every scheme is available in every country, and some have strict eligibility criteria. Choosing the right option depends on your turnover, industry, accounting preferences, and risk tolerance.

Once you’ve chosen a scheme, you can complete your VAT registration online through the relevant tax authority’s portal. You’ll usually need to:

• Fill in an application form
  
• Upload supporting documents
  
• Choose a VAT scheme
  
• Provide a start date for taxable activity
  

Once you’ve submitted your application, processing times vary. Some authorities approve applications within a few days, while others might take several weeks, especially if you have a nonresident business or operate in a complex sector.

In some cases, registration is retroactive. If you exceeded the threshold before applying, you might need to pay VAT on past sales.

What happens after you register for VAT?

Once you’re issued a VAT number, you’re expected to comply with a recurring set of tax and reporting obligations. Here’s what to do after you register.

Start charging VAT

On most goods and services you sell, you’ll need to apply the correct VAT rate and include it on your invoices. These invoices must meet specific formatting standards such as displaying your VAT number and breaking down the tax collected.

File VAT returns

Depending on the country and your turnover, VAT returns might be due monthly, quarterly, or annually. These returns summarise:

• VAT you’ve collected on sales (output tax)
  
• VAT you’ve paid on business expenses (input tax)
  
• The difference between the two, which determines whether you owe payment or are due a refund
  

Returns need to be submitted on time, even during periods with no sales or purchases. Late filings can trigger penalties.

Keep detailed records

Most tax authorities require VAT-registered businesses to maintain organised records of:

• Sales and purchase invoices
  
• Submitted VAT returns
  
• Correspondence with tax authorities
  
• Supporting documents for reclaiming VAT (e.g. receipts, contracts, shipping documents)
  

Record retention periods vary, but 5–10 years is common.

Comply with any additional registrations

If you’re registered in more than one country – or if you sell cross-border digital services – you might also need to:

• Submit additional reporting (e.g. EC Sales Lists in the EU)
  
• Apply the correct VAT rate based on the buyer’s location
  
• Track thresholds for distance sales or digital transactions across multiple jurisdictions
  

VAT registration is a gateway to broader tax responsibilities. Staying compliant necessitates maintaining effective systems, keeping accurate records, and following cross-border transaction rules. You can learn more about how Stripe Tax makes it easier to manage your VAT collection all in one place here.