VAT and GST for Internationally Mobile Business Owners

VAT (Value Added Tax) and its international equivalents — GST in Canada, Australia, India and elsewhere — are among the most administratively complex obligations for internationally mobile business owners. Unlike income tax, which follows the business owner's residency, consumption taxes follow the flow of goods and services and are determined by where economic activity takes place, who the customer is, and what is being supplied.

For a business owner who supplies services from Cyprus to UK and EU clients, who also has an operating company in Dubai, and who sells digital products globally, the VAT picture spans multiple jurisdictions with different rules. Getting it wrong creates compliance risk; over-charging VAT creates cash flow disadvantages and client friction.

This guide is for information only. VAT/GST rules are complex, jurisdiction-specific and subject to change. Always take independent tax advice for your specific situation.

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The Fundamental Principle: Where Is the Supply Made?

VAT is a transaction-based tax. The starting point is always: where is the supply (of goods or services) made for VAT purposes?

For services, this is typically determined by the "place of supply" rules, which differ for:

• B2B services (business-to-business): generally, the place of supply is where the customer belongs (their country of establishment)
• B2C services (business-to-consumer): generally, the place of supply is where the supplier belongs, with significant exceptions for digital/electronic services

These rules mean that where the supplier is located is not always the relevant jurisdiction. A UK-registered business supplying services to a German business client may not charge UK VAT — the reverse charge applies and German VAT is accounted for by the client in Germany.

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UK VAT: Who Must Register?

The Registration Threshold

Businesses making taxable supplies in the UK exceeding £90,000 per annum (the VAT registration threshold since 1 April 2024, unchanged for 2026/27) must register for UK VAT. This threshold applies to:

• UK-established businesses
• Non-UK established businesses making taxable supplies in the UK — importantly, there is no threshold for overseas businesses; they must register from the first supply

UK VAT for Non-UK Established Businesses

If you are a business owner who has relocated abroad but continues to supply taxable services to UK customers, you may still be required to be UK VAT registered. The key question is whether you are "making supplies in the UK."

For general business services supplied B2B to UK VAT-registered customers: the UK reverse charge applies — the customer accounts for VAT. The overseas supplier does not need to charge VAT, but may still need a UK VAT number in some circumstances.

For supplies to UK consumers (non-registered individuals): the supplier must account for UK VAT on those supplies. An overseas supplier making taxable B2C supplies to UK consumers needs to register for UK VAT (or the Non-Established Taxable Persons regime).

Reverse Charge in the UK

The UK domestic reverse charge applies in certain specific sectors (construction, mobile phones, electronic goods, and professional services under the general rule B2B cross-border provisions). Under the B2B general rule:

• If a UK business purchases services from an overseas supplier (e.g., legal services from a US law firm, software from an Irish company), the UK business accounts for VAT under the reverse charge — effectively paying the VAT to HMRC itself and (if entitled) recovering it as input tax
• The overseas supplier does not charge UK VAT but may reference the reverse charge on their invoice

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EU VAT: B2B vs B2C

B2B Services (Business-to-Business)

Under EU VAT rules (Article 44 of the EU VAT Directive), the place of supply of most services between VAT-registered businesses is where the customer is established. The customer accounts for VAT under the reverse charge.

In practice:

• A Cyprus company supplying consulting services to a German GmbH does not charge Cypriot VAT — the German company reverse-charges German VAT
• The Cyprus company issues a "zero-rated" (or "outside scope") invoice referencing the reverse charge obligation
• The Cyprus company may need to file EC Sales Lists (or their post-Brexit/non-EU equivalent) reporting such supplies

This is the most common situation for professional service businesses operating across EU member states.

B2C Services (Business-to-Consumer)

When a business supplies services to non-VAT-registered individuals in the EU, the place of supply rules differ. For digital services (electronically supplied services, broadcasting, telecommunications), the place of supply for B2C is where the consumer is located. This means a business selling e-learning, software downloads, or streaming services to EU consumers must account for VAT in each EU country where consumers are located.

The One Stop Shop (OSS) solves the multi-country problem: Rather than registering for VAT in every EU country where you have consumers, EU and non-EU businesses can register for the OSS in a single EU member state and file a single VAT return covering all EU consumer supplies. The OSS tax is then distributed to the relevant member states by the registration country's tax authority.

Non-EU OSS (IOSS): for imports of goods valued up to €150 to EU consumers, the Import One Stop Shop (IOSS) simplifies VAT collection at import.

The €10,000 EU Digital Services Threshold

Within the EU, businesses supplying digital services to consumers in other EU states below a total threshold of €10,000 per annum can choose to apply VAT at their own country's rate rather than the consumer's country rate. Above this threshold, OSS registration becomes obligatory.

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UAE VAT

The UAE introduced a federal VAT of 5% in January 2018, applying to most goods and services.

Key points for internationally mobile business owners:

• Registration required for businesses with taxable UAE supplies above AED 375,000 per annum (mandatory); voluntary registration is available above AED 187,500
• Most goods and services are taxed at 5%, with zero-rated and exempt categories (residential property long-term rental, certain financial services, healthcare and education)
• Exports from the UAE are zero-rated — UAE businesses supplying services to clients outside the UAE do not charge UAE VAT on those supplies (subject to the place of supply rules)
• Reverse charge applies to business services imported into the UAE from foreign suppliers — the UAE customer accounts for UAE VAT on imported services

For a UAE FZCO supplying services internationally: If a Dubai FZCO supplies professional services to UK or EU business clients, no UAE VAT arises on those supplies (they are outside the UAE VAT system). The receiving business may have its own VAT obligations in its jurisdiction. The FZCO files UAE VAT returns but those international B2B supplies are generally zero-rated or outside scope.

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Cross-Border Compliance: Common Pitfalls

Permanent Establishment and VAT

A business that has a fixed establishment in a country (beyond a mere virtual address) may be treated as locally established for VAT purposes, requiring local VAT registration and accounting. "Fixed establishment" means a structure with sufficient human and technical resources to supply services independently.

An international business owner who works from an office in Germany for several months a year, managing supplies to German customers, may inadvertently create a German fixed establishment and a German VAT obligation.

Digital Services: Platform Rules

If you supply digital services through a marketplace or platform (Amazon, Apple App Store, Google Play, Etsy, etc.), those platforms may collect and remit VAT on your behalf — but this depends on the platform's specific obligations in each jurisdiction. You should confirm with each platform what VAT they collect and what you remain responsible for.

Retrospective VAT Liabilities

VAT compliance issues tend not to stay small. A business that has been making taxable supplies without charging VAT for several years faces a potentially large retrospective VAT liability — the tax that should have been collected from customers. HMRC and other tax authorities can and do assess businesses for historic VAT not charged, with interest and penalties.

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Practical VAT Checklist for Mobile Business Owners

• Map your supplies: list all the types of services/goods you supply, to what types of customers (B2B/B2C), in which countries
• Identify registration obligations: for each supply, determine whether you are required to register in the customer's country (or have a threshold to monitor)
• Implement the reverse charge correctly: for B2B cross-border services, ensure invoices reference the reverse charge and do not charge VAT where the reverse charge applies
• Consider OSS registration: if supplying digital services to EU consumers, OSS registration simplifies compliance
• Review on relocation: when you move jurisdiction, review your VAT registrations — some may no longer be needed, others may be newly required
• Use local advisers: UK, EU, UAE and other VAT systems each have nuances — having a local VAT adviser in each jurisdiction where you have obligations is advisable for any business of scale

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How Global Investments Can Help

Global Investments has over 32 years of experience working with internationally mobile entrepreneurs and business owners. VAT and GST compliance is a practical business necessity that should not distract from your core activities. We work with specialist international tax and VAT advisers to help clients map their VAT obligations across jurisdictions, implement compliant processes, and resolve historic VAT issues.

Contact us to discuss your international VAT obligations.