What is the VAT Number?

Updated on June 1, 2022

What is the VAT Number?

The logistics of moving goods across international borders can be complicated and time-consuming. Trade, importation, and exportation all have their own distinct set of laws and regulations, thus shippers have to conduct a variety of duties to ensure that they are adhering to and complying with these rules and regulations.

It’s possible that businesses and other organisations engaged in economic activity will encounter the VAT number, which is one of these processes and difficulties. We understand that VAT statistics might be difficult to comprehend, so we’re here to help.

What a VAT number is, why it’s important and where you can get one are some of the questions we’ll answer in this post.

What is a VAT Number?

A VAT number comes into play in all types of economic activity, including the process of trade, importation, and exportation of goods.

To distinguish between tax-payers and non-taxpayers, authorities use a unique numbering system that is comprised of numerical symbols.

Identifying the relevant parties’ tax status, as well as the location and rate of taxation, are all crucial considerations, and in certain cases, they’re even mandated in invoices.

VAT Number in EU Countries

A VAT number can be referred to by a variety of different names. A tax VAT number, VAT identity number, or VAT registration number is also known. Depending on which EU countries provide their own VAT number, the amount of VAT that can be charged can also vary.

VAT numbers cannot be used for all transactions by enterprises who supply goods to multiple EU nations. Each of these countries’ VAT registrations would be required instead.

Simplified registration is offered for companies that provide services in the electronic, broadcasting, and telecommunications industries.

VAT Number Format

The EU country code and a unique set of digits or characters begin the standard format for VAT numbers. The format may also vary based on the country in which the study is being place. For instance, in Belgium, a single 10-digit block of characters is used. Rather than using four blocks of two digits, Denmark does such.

Each EU country’s VAT number formats can be found here.

Who Needs to Register for a VAT Number?

Under Article 214 of the EU VAT Directive, only the following individuals are required to have a VAT number:

Organizations that provide goods and services subject to VAT
Businesses that buy goods and services from other EU countries.
Receiving services for which a business must pay VAT
Businesses that provide VAT-exempt services to their clients
If a company’s VAT taxable revenue exceeds £85,000, it must obtain a DPP VAT number.

How to Register for a VAT Number

VAT numbers are issued by the respective authorities in the EU Member States.

Only tax administrations are authorised to issue VAT numbers to firms by the EU Commission.

It’s a good idea to utilise a customs and VAT calculator to figure out how much VAT you’ll owe before you begin your registration. Any EU-authorized tax administration, such as HM Revenue and Customs (HMRC), can be used to register for tax purposes.

On the day of your registration, you’ll receive a VAT certificate that includes your unique individual VAT number, as well as the date by which you must pay and file your first VAT return.

What Responsibilities Under the VAT Directive

In order to maintain their tax status and to comply with the economic requirements of EU countries, businesses who have registered for a VAT number have specific responsibilities. Of course, the most crucial requirement is to pay any VAT amount that is owed to the tax office on time.

Apart from making timely and complete VAT payments, firms must also file VAT returns, maintain VAT records and accounts, and charge the correct VAT rate on purchases. VAT returns must be filed on time and in full.

Record-keeping requirements for VAT include the following:

The name of the company, its location, and its VAT number.
Schemes for calculating VAT
Value-added tax (VAT) on delivered goods and services
Return alterations
Quantity and price of goods and services
Transactions in which the charge is reversed
gross receipts on a day-to-day basis
Items that are eligible for a VAT refund
The sum of all sales and VAT.
VAT-registered firms with an annual turnover of more than £85,000 additionally face additional obligations. They can use the Making Tax Digital tools to send in their VAT return, retain digital VAT records, and so forth.

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