EU VAT validation

Name Name of a concept, e.g. a data model concept. In contrast to terms, the name does not depend on a given context, e.g. a country-specific language.	EU VAT validation
Short description Informal and short human-readable definition of a concept.	EU VAT validation is crucial for businesses engaged in cross-border transactions to ensure compliance with regulations, mitigate fraud risks, and avoid financial penalties. CDQ’s Tax Guard product incorporates data quality rules to validate VAT numbers, ensuring businesses meet the EU VAT Quick Fixes requirements and accurately verify their partners' VAT status and linked bank accounts.
Description Informal and comprehensive human-readable definition of a concept.	Validating EU VAT numbers is essential for businesses operating within the EU, as it helps ensure regulatory compliance, mitigates fraud risks, and prevents financial liabilities from incorrect VAT handling. The EU VAT Quick Fixes and DAC7 regulations mandate stringent due diligence, requiring businesses to verify their partners' VAT registration and linked bank accounts, particularly for cross-border transactions. The CDQ Tax Guard supports these efforts by integrating data quality rules that streamline the validation of VAT numbers. This ensures that businesses accurately record VAT IDs, verify compliance with intra-community supply rules, and maintain exemption from VAT liabilities. Additionally, CDQ’s solution automates these checks, enabling organizations to handle high transaction volumes while staying compliant, reducing the risk of penalties and operational disruptions.

Why validating EU VAT numbers

• Regulatory Requirements: Many businesses across the EU and beyond are required by law to validate their suppliers' and customers' VAT numbers, ensure they are VAT registered, and verify linked bank accounts to prevent fraud and ensure compliance.
• Cross-Border Transactions: With the complexity of VAT compliance across borders, businesses need to ensure that they are accurately accounting for VAT in each transaction. Incorrect VAT handling can lead to fines, penalties, or a loss of tax refunds.
• Risk Mitigation & Due Diligence: Businesses must ensure they aren't transacting with non-compliant or fraudulent partners, especially with EU regulations like the EU VAT Quick Fixes and DAC7 that require more stringent due diligence on business partners.
• Automation Needs: Large organizations, in particular, need to automate these checks as they deal with high volumes of transactions. Manual checks are not feasible, especially when compliance risks are high and errors can be costly.

Legal Framework for Intra-Community Deliveries in the EU

Deliveries of goods and services to other EU countries by German companies are generally exempt from VAT as intra-community deliveries, according to § 6a of the German VAT Act (UStG). This tax exemption applies to the supply of goods and services between EU member states, as long as certain conditions are met. One key requirement is that the delivering company must provide evidence of the transaction's eligibility for exemption. Specifically, the company must verify and record the buyer's foreign VAT identification number (VAT-ID), which must be valid at the time the invoice is issued. If this proof is not provided or the VAT-ID is not valid, the delivery of goods or the invoice cannot be treated as tax-exempt.

In addition to these rules, German companies must ensure that the goods are physically transported from Germany to another EU member state. The supplier must keep documentation proving the shipment, such as transport or shipping documents, in order to maintain the VAT exemption status. If these conditions are not fulfilled, the German tax authorities may retroactively charge VAT on the transaction.

EU-Wide Application

This legal framework is not unique to Germany but is consistent with the principles outlined in the EU VAT Directive, which governs the VAT system across the European Union. The VAT Directive provides the foundation for intra-community supplies, stating that VAT exemptions for goods and services delivered between EU member states are available under certain conditions. These conditions are broadly similar across EU countries, though the exact implementation may vary slightly depending on national VAT laws. In most EU member states, the tax exemption for intra-community supplies of goods also depends on verifying the buyer’s valid VAT-ID and ensuring that the goods are transported out of the seller’s country and into another EU country. If these requirements are not met, the seller may be held liable for the VAT that should have been charged. Therefore, businesses in every EU member state must ensure they properly verify the VAT-ID of their EU-based customers and maintain adequate documentation of the transport and transaction. Businesses face significant challenges in verifying the VAT status and bank account details of their partners across different countries. Inaccurate or fraudulent information can lead to severe financial and legal repercussions, including the inability to reclaim VAT or being held liable for a partner’s unpaid VAT.

On September 1, 2019, the Polish tax authorities introduced the so-called "White List of Taxpayers," an electronic registry containing detailed information about VAT taxpayers in Poland. This list also includes companies based abroad that are liable for VAT in Poland. In addition to registered VAT IDs and address details, the list displays the bank account numbers provided during the company's registration or VAT registration process. As of January 1, 2020, taxpayers making payments for transactions exceeding 15,000 PLN or its equivalent must transfer the funds to the bank account listed on the White List for their business partner. Failure to comply with this requirement makes the payer jointly liable for any unpaid VAT debts of their business partner.

Following the amendment to the Czech VAT Act, the Czech finance administration has introduced a new system involving "unreliable taxpayers" and "reliable bank accounts." VAT payers who have breached VAT regulations will be classified as unreliable, and customers purchasing from these unreliable VAT payers will be held responsible for any unpaid VAT on those transactions. This system is a measure aimed at combating VAT evasion and fraud.

Strict Compliance Requirements

Due to the strict handling of VAT regulations by tax authorities throughout the EU, businesses are strongly advised to conduct careful due diligence when making any intra-community supplies. This includes regularly verifying the VAT-IDs of their trade partners for every chargeable service or delivery within the EU, as even minor errors in compliance can lead to significant financial liabilities, such as having to retroactively pay VAT, penalties, and interest. The European Commission provides an online VAT-ID verification service (VIES) that companies can use to check the validity of their customer’s VAT numbers.

The Quick Fixes for the EU value-added tax reform, effective since January 1, 2020, impose strict requirements on businesses to accurately record the EU VAT identification numbers of their customers. This compliance is essential for the tax exemption of intra-community supplies. Failure to record a valid EU VAT ID of the recipient can result in the intra-community supply becoming subject to tax, leading to significant financial implications.

Minimizing Liability Risk

To minimize liability risks, companies across the EU are encouraged to implement internal processes that ensure the verification of VAT-IDs and the retention of all relevant documentation (such as invoices, contracts, and proof of transportation). By doing so, companies can safeguard their transactions from VAT audits and reduce the risk of financial penalties that could arise from non-compliance with the VAT exemption rules for intra-community deliveries.

Impact

Non-compliance with these VAT requirements can result in severe penalties, additional tax liabilities, and increased administrative burdens. Businesses may face delays in invoicing and payment processing, which can disrupt cash flow and overall operational efficiency. Ensuring accurate and compliant VAT data is critical to maintaining smooth and cost-effective cross-border trade within the EU.

Step by Step Guides

Guide

Description

How Can I Verify a Slovenian VAT Number? A Step-by-Step Guide

Verifying a Slovenian VAT number ensures compliance with EU VAT regulations, preventing potential penalties and fraudulent transactions. The European Commission’s VAT Information Exchange System (VIES) is a free online tool that allows businesses to validate VAT numbers in real-time for any EU member state, including Slovenia. In addition to VIES, CDQ Tax Guard provides an easy-to-use solution for validating Slovenian VAT numbers. This tool allows businesses to verify that their partners' VAT details are correct, helping to avoid VAT-related errors and compliance issues.

EU VAT Numbers

Data Quality Rule	Country	Name	Description
European value added tax identifier (Austria)	AT (Österreich, Austria, Autriche, 奥地利)	Umsatzsteuer-Identifikationsnummer (de)	The Austrian VAT identifier is used for businesses involved in intra-EU trade. Issued by the Bundesministerium für Finanzen (Federal Ministry of Finance), the VAT number is essential for Austrian companies to conduct business across EU borders, ensuring compliance with EU VAT regulations. Format: The VAT number follows the format ATU99999999, where 'U' is a fixed prefix followed by 8 digits. Check Digit Logic: The number uses a modulus 11 check system to validate the identifier.
European value added tax identifier (Belgium)	BE (Belgien, Belgium, Belgique, België, 比利时)	Belasting op toegevoegde waarde (nl) Mehrwertsteuer-Identifikationsnummer (de) Taxe sur la valeur ajoutée (fr)	The Belgian VAT identifier is crucial for companies engaging in cross-border transactions within the EU. Issued by the Federal Public Service Finance, the identifier helps monitor VAT compliance and allows for intra-community VAT transactions. Format: The format is BE0999999999 (10 digits). Check Digit Logic: The last two digits are calculated by subtracting the remainder of the first 8 digits divided by 97 from 97 (modulus 97).
European value added tax identifier (Bulgaria)	BG (Bulgaria, Bulgarien, Bulgaria, Bulgarie, 保加利亚)	Идентификационен номер по ДДС (bg)	In Bulgaria, the VAT identifier is assigned to businesses and individuals engaging in cross-border VAT activities in the EU. Issued by the National Revenue Agency, it ensures VAT compliance and simplifies intra-EU transactions. Format: The VAT number is either BG999999999 (9 digits for legal entities) or BG9999999999 (10 digits for individuals). Check Digit Logic: The VAT number uses a modulus 11 system to verify the last digit.
European value added tax identifier (Croatia)	HR (Kroatien, Croatia, Croatie, Hrvatska, 克罗地亚)	PDV (hr)	The Croatian VAT identifier, issued by the Ministry of Finance - Tax Administration, is used by businesses and individuals for intra-EU trade. It ensures that VAT is correctly reported and accounted for. Format: The format is HR99999999999 (11 digits). Check Digit Logic: The identifier is validated using a modulus 11 algorithm to calculate the check digit.
European value added tax identifier (Czech Republic)	CZ (Česko, Tschechien, Czechia, Tchéquie, 捷克)	Identifikační číslo pro DPH (cs)	The VAT number in the Czech Republic is used for businesses conducting cross-border transactions within the EU and is issued by the Czech Financial Administration. This identifier ensures that companies comply with EU VAT obligations. Format: The VAT number can be CZ99999999 (8 digits), CZ999999999 (9 digits), or CZ9999999999 (10 digits). Check Digit Logic: A modulus 11 or modulus 97 check digit system is used depending on the number of digits.
European value added tax identifier (Denmark)	DK (Danmark, Dänemark, Denmark, Danmark, Danemark, Danmarki, 丹麦)	Momsregistreringsnummer (da)	The Danish VAT number is used by businesses engaging in cross-border transactions within the EU and is issued by the Danish Customs and Tax Administration (SKAT). It is a requirement for Danish companies to comply with EU VAT regulations. Format: The VAT number follows the format DK99999999 (8 digits). Check Digit Logic: Validation is performed using a modulus 11 algorithm to calculate the check digit.
European value added tax identifier (Estonia)	EE (Estland, Estonia, Eesti, Estonie, 爱沙尼亚)	Käibemaksukohustuslase number (et)	Estonian businesses involved in intra-EU trade are assigned a VAT identifier by the Estonian Tax and Customs Board. This identifier is used to verify VAT compliance and allow for VAT-free transactions within the EU. Format: The format is EE999999999 (9 digits). Check Digit Logic: The check digit is validated using a modulus 11 system.
European value added tax identifier (Finland)	FI (Finnland, Finland, Suomi, Finlande, Finland, 芬兰)	Arvonlisäverotunnus (fi) Momsregistreringsnummer (sv)	Finnish businesses engaging in cross-border VAT transactions within the EU are assigned a VAT number by the Finnish Tax Administration. This identifier ensures compliance with EU VAT obligations and facilitates trade across borders. Format: The VAT number follows the format FI99999999 (8 digits). Check Digit Logic: A modulus 11 check digit is used to verify the VAT number.
European value added tax identifier (France)	FR (Frankreich, France, France, 法国)	Taxe sur la Valeur Ajoutée (fr)	The French VAT identifier is used for businesses involved in cross-border transactions within the EU. Issued by the Direction Générale des Finances Publiques, it is essential for VAT-related operations in France. Format: FRXX 999999999 (11 digits, the first two digits are check digits). Check Digit Logic: The first two digits are a check digits based on the SIREN number of the company.
European value added tax identifier (Germany)	DE (Deutschland, Germany, Allemagne, 德国)	Umsatzsteuer-Identifikationsnummer (de)	The German VAT identifier is issued by the Federal Central Tax Office (Bundeszentralamt für Steuern) and is required for businesses engaging in cross-border trade within the EU. Format: DE999999999 (9 digits). Check Digit Logic: Uses a modulus 97 check to validate the number
European value added tax identifier (Greece)	GR (Griechenland, Elláda, Greece, Grèce, 希腊)	Αριθμός Φόρου Προστιθέμενης Αξίας (el)	The Greek VAT identifier is issued by the Hellenic Ministry of Finance and is used for cross-border VAT compliance within the EU. Format: GR999999999 (9 digits). Check Digit Logic: Uses a modulus 11 system to validate the number.
European value added tax identifier (Hungary)	HU (Ungarn, Hungary, Hongrie, Magyarország, 匈牙利)	Általános Forgalmi Adóazonosító (hu)	The Hungarian VAT identifier is issued by the Hungarian Tax and Customs Administration and is used for VAT compliance in EU cross-border transactions. Format: HU99999999 (8 digits). Check Digit Logic: The VAT number uses a modulus 11 check digit system.
European value added tax identifier (Ireland)	IE (Irland, Ireland, Irlande, Éire, 爱尔兰共和国)	Value added tax identification number (en) Uimhir Cánach ar an Mheasúnacht Bhreisluacha (ga)	Issued by the Revenue Commissioners, the Irish VAT identifier is used for cross-border VAT transactions within the EU. Format: IE9999999X or IE9X99999X (9 characters). Check Digit Logic: Uses a weighted modulus 23 check system.
European value added tax identifier (Italy)	IT (Italien, Italy, Italie, Italia, 意大利)	Partita IVA (it)	The Italian VAT identifier is issued by the Agenzia delle Entrate (Revenue Agency) and is required for businesses conducting intra-EU transactions. Format: IT99999999999 (11 digits). Check Digit Logic: The VAT number uses a modulus 11 system to calculate the check digit.
European value added tax identifier (Latvia)	LV (Lettland, Latvia, Lettonie, Latvija, 拉脫維亞)	Pievienotās vērtības nodoklis (lv)	The Latvian VAT identifier is issued by the State Revenue Service and is used by businesses for VAT compliance in intra-EU trade. Format: LV99999999999 (11 digits). Check Digit Logic: The check digit is calculated using a modulus 11 system.
European value added tax identifier (Lithuania)	LT (Litauen, Lithuania, Lituanie, Lietuva, 立陶宛)	Pridėtinės Vertės Mokestis (lt)	Issued by the State Tax Inspectorate, the Lithuanian VAT identifier is required for businesses conducting intra-EU transactions. Format: LT999999999 or LT999999999999 (9 or 12 digits). Check Digit Logic: The number uses a modulus 11 check digit system for validation.
European value added tax identifier (Luxembourg)	LU (Luxemburg, Luxembourg, Luxembourg, Lëtzebuerg, 卢森堡)	Mehrwertsteuer-Identifikationsnummer (de) Numéro d'Identification à la TVA (fr) Nummer vun der TVA (lb)	The VAT identifier in Luxembourg is issued by the Administration de l'Enregistrement et des Domaines. It is required for VAT compliance within the EU. Format: LU99999999 (8 digits). Check Digit Logic: The last two digits are calculated using a modulus 89 check system.
European value added tax identifier (Malta)	MT (Malta, Malta, Malte, Malta, 马耳他)	VAT Identification Number (en) Numru ta' Indentifikazzjoni għat-Taxxa fuq il-Valur Miżjud (mt)	Issued by the Office of the Commissioner for Revenue, the Maltese VAT identifier is used for VAT reporting in intra-EU transactions. Format: MT99999999 (8 digits). Check Digit Logic: A modulus 23 check is used to validate the VAT number.
European value added tax identifier (Poland)	PL (Polen, Poland, Pologne, Polska, 波兰)	Numer Identyfikacji Podatkowej (pl)	Issued by the Ministry of Finance, the Polish VAT identifier is used by businesses for VAT reporting on intra-EU transactions. Format: PL9999999999 (10 digits). Check Digit Logic: The number uses a weighted modulus 11 system to verify the last digit.
European value added tax identifier (Portugal)	PT (Portugal, Portugal, Portugal, Portugal, 葡萄牙)	Número de Identificação Fiscal (pt)	The Portuguese VAT identifier is issued by the Autoridade Tributária e Aduaneira and is essential for businesses involved in intra-EU trade. Format: PT999999999 (9 digits). Check Digit Logic: A modulus 11 system is used to validate the identifier.
European value added tax identifier (Romania)	RO (Rumänien, Romania, Roumanie, România, 羅馬尼亞)	axa pe Valoarea Adăugată (ro)	Issued by the Romanian Ministry of Finance, the VAT identifier is required for Romanian businesses involved in intra-EU VAT reporting. Format: RO999999999 (up to 10 digits). Check Digit Logic: The check digit uses a modulus 11 validation.
European value added tax identifier (Slovakia)	SK (Slowakei, the Slovak Republic, Slovaquie, Slovensko, 斯洛伐克)	Identifikačné číslo pre DPH (sk)	The Slovak VAT identifier is issued by the Tax Directorate of Slovakia for businesses involved in EU cross-border VAT transactions. Format: SK9999999999 (10 digits). Check Digit Logic: The number uses a modulus 11 check digit.
European value added tax identifier (Slovenia)	SI (Slowenien, Slovenia, Slovénie, Slovenija, 斯洛文尼亚)	Davčna številka (sl)	The Slovenian VAT identifier is issued by the Financial Administration of the Republic of Slovenia for businesses engaged in intra-EU transactions. It is essential for Slovenian companies to ensure VAT compliance when dealing with cross-border trade within the EU. Format: SI99999999 (8 digits). Check Digit Logic: Uses a modulus 11 algorithm for validation.
European value added tax identifier (Spain)	ES (Espanya, Spanien, Spain, España, Espainia, Espagne, España, Espanha, 西班牙)	Número de Identificación Fiscal (es)	The Spanish VAT identifier is issued by the Agencia Estatal de Administración Tributaria (AEAT) and is used for VAT reporting in cross-border transactions within the EU. It applies to both individuals and businesses involved in trade. Format: ESX9999999X (9 characters, where the first and last characters can be letters). Check Digit Logic: The first letter represents the type of entity (e.g., businesses), and the last character is a check letter calculated using a modulus 23 check.
European value added tax identifier (Sweden)	SE (Schweden, Sweden, Suède, Sverige, 瑞典)	Momsregistreringsnummer (sv)	In Sweden, the VAT identifier is issued by the Skatteverket (Swedish Tax Agency) and is necessary for businesses engaging in intra-EU transactions. Format: SE999999999901 (12 digits). The last two digits are always '01'. Check Digit Logic: Uses a modulus 10 system for validation based on the entity's corporate registration number.
European value added tax identifier (The Netherlands)	NL (Königreich der Niederlande, Netherlands, Pays-Bas, Nederland, 荷蘭)	Omzetbelastingnummer (nl)	The Dutch VAT identifier is issued by the Belastingdienst (Dutch Tax and Customs Administration) and is required for VAT compliance in EU cross-border transactions. Format: NL999999999B99 (12 characters). The first 9 digits are the company’s RSIN or BSN (tax ID), and 'B99' is a suffix used for VAT identification. Check Digit Logic: The first 9 digits are verified using a modulus 11 system.