For buyers new to European business acquisitions, VAT is often the most confusing part of the deal. Unlike a simple product purchase, buying a business that sells digital services to EU customers comes with a web of VAT obligations that varies by country, sale type, and revenue threshold. Here's what you need to understand before signing.
Why VAT matters when buying an online business
EU businesses that sell digital services to consumers (B2C) must charge VAT at the rate of the customer's country — not the seller's country. This applies to SaaS subscriptions, digital downloads, mobile apps, and online courses. If the business you're buying is already registered and compliant, you need to understand the registration transfer process before day one of ownership.
The One-Stop Shop (OSS) scheme
Since July 2021, the EU OSS scheme allows businesses to report and pay VAT for all EU countries through a single registration in one member state. If the business you're buying uses OSS, you'll need to register for OSS in your own country of residence or the business's country of establishment — the existing registration cannot be transferred.
Country-by-country VAT registration: what can and cannot transfer
| Situation | What happens |
|---|---|
| Asset sale | All VAT registrations must be re-registered in the buyer's name. Seller deregisters. |
| Share sale (company purchase) | Existing VAT registrations remain with the company — transfer is automatic. |
| OSS registration | Cannot transfer — buyer must register anew in their member state. |
| Non-EU buyer acquiring EU business | Must appoint an EU fiscal representative in each country with VAT obligations. |
The risk of VAT gaps during the transition
If there's any gap between the seller deregistering and the buyer receiving a new VAT number, you may legally be required to pause billing or collect VAT without a valid registration number. This gap is often underestimated in deal timelines. Budget 4–8 weeks for VAT registration in most EU countries, longer in some.
Practical steps for VAT transition
- 1.Before signing: request a full list of VAT registrations from the seller.
- 2.During due diligence: verify all registrations are current and returns are filed.
- 3.In the purchase agreement: include VAT transition as a specific clause with timelines.
- 4.Post-closing: file for new registrations immediately; do not wait until day of transfer.
- 5.In your first month: update billing systems to show your new VAT numbers to customers.
VAT registration timelines in some EU countries (notably Poland and Romania) can exceed 8 weeks. Factor this into your deal timeline or negotiate a VAT management agreement with the seller for the transition period.
What IT Marker does to surface VAT information
On IT Marker listings, sellers can disclose their active VAT registrations by country. This allows buyers to assess the complexity of the VAT transition early in the process, before due diligence begins. Look for the VAT section in the listing details when evaluating EU-registered businesses.