Late tax registration and backdating: When it might be relevant

If you're selling goods or services across borders—whether you run an ecommerce store, a SaaS business, or sell digital products—you may have crossed local tax registration thresholds before becoming compliant. This is common and can be resolved through a process often referred to as "backdating," which means making your tax registration effective from a date in the past.

Here's what to expect if your registration is late, what steps we'll take to help, and why it's important to act sooner rather than later.

When you might need to backdate a tax registration

There are several scenarios where you might need to backdate your VAT, GST, or Sales Tax registration:

Physical presence creates tax obligations

• If you store inventory in a warehouse or use a fulfillment service like Amazon FBA, you may create a tax obligation (known as "nexus" in the U.S.) from the moment inventory arrives. For example:

  • You send goods to a fulfillment center in Germany in January but don't register for VAT until March.

  • You begin storing goods in a California warehouse in May but only apply for sales tax registration in August.

Digital product sales to consumers

• Many countries apply VAT/GST on digital services sold to consumers, regardless of your local presence:

  • You sell downloadable software or subscription-based apps to customers in the EU, and exceed the €10,000 threshold.

  • You begin streaming paid content to customers in Australia or South Africa, triggering local tax obligations.

Exceeding sales thresholds

• Thresholds vary by country (or by U.S. state), but crossing them usually means you must register:

  • You sell €50,000 worth of goods to consumers in France in a calendar year, crossing the EU OSS threshold.

  • You make over $100,000 in sales to customers in Texas, which creates sales tax nexus under U.S. economic nexus rules.

Reclaiming past input tax

• In VAT/GST systems, businesses often want to recover tax paid on expenses:

  • You set up operations in Canada in January, incur costs, but don't start selling until April. You can request a backdated GST registration to reclaim the tax on those early expenses.

Registration oversight

• If you were unaware of your obligations, or assumed you didn't need to register, you may only realize the need to register months later.

What We'll Need From You

To assess your situation and begin the registration process, we'll ask you for:

• Your past and projected turnover

• Your sales history by jurisdiction

If you store inventory locally (for example, in an Amazon FBA warehouse), we'll also review when that began, as physical presence may trigger earlier tax obligations in certain countries.

Using this information, we'll determine when you likely became liable to register and what steps are required to become compliant.

For more information on consequences and how we can help with the resolution, see our article Late tax registration and backdating: Consequences and how to resolve them.

Need help?

Reach out to our team to learn more about addressing your specific situation by booking a call or creating a ticket.