Understanding EU VAT Numbers and Validation

If you sell goods or services to businesses in the European Union, understanding VAT numbers isn’t optional. A Value Added Tax identification number is assigned to every business registered for VAT in the EU, and it determines how transactions are taxed across borders. Getting this wrong can result in charging tax when you should not, failing to charge it when you must, or issuing invoices that do not meet legal requirements.

Whether you run an e-commerce store, a SaaS company, or a consulting firm with EU clients, this guide covers what you need to know about VAT numbers, their formats, validation requirements, and practical implications for your business.

What Is a VAT Number?

A VAT number is a unique identifier assigned to a business by its national tax authority. It proves that the business is registered to collect and remit VAT. The number appears on invoices, tax returns, and customs documents.

Every EU member state issues VAT numbers following a specific format. The number always begins with a two-letter country code (the ISO 3166-1 alpha-2 code), followed by a string of digits and sometimes letters. The total length varies by country.

Country-Specific Formats

Each EU country has its own VAT number structure:

Country	Code	Format	Example
Germany	DE	DE + 9 digits	DE123456789
France	FR	FR + 2 chars + 9 digits	FR12345678901
Netherlands	NL	NL + 9 digits + B + 2 digits	NL123456789B01
Spain	ES	ES + letter + 7 digits + letter	ESX1234567A
Italy	IT	IT + 11 digits	IT12345678901
Belgium	BE	BE + 10 digits	BE0123456789
Poland	PL	PL + 10 digits	PL1234567890
Ireland	IE	IE + 7 digits + 1-2 letters	IE1234567AB
Austria	AT	ATU + 8 digits	ATU12345678
Sweden	SE	SE + 12 digits	SE123456789012

The format differences matter because a valid-looking number might not match the rules for its country. A French VAT number with only 8 digits after the prefix is structurally invalid, regardless of whether the digits themselves are correct.

When Is VAT Number Validation Required?

B2B Cross-Border Sales Within the EU

When you sell to a business in another EU country, you can apply the reverse charge mechanism. This means you don’t charge VAT on the invoice, and the buyer accounts for VAT in their own country. However, this only applies if the buyer provides a valid VAT number.

You are required to verify that the number is valid. If you apply the zero rate without validating the number and it turns out to be invalid, your tax authority can hold you liable for the unpaid VAT plus penalties.

Invoicing Requirements

EU invoicing regulations require that both the seller’s and the buyer’s VAT numbers appear on invoices for B2B transactions. An invoice missing either number may not count as a valid tax document, which affects the buyer’s ability to reclaim input VAT.

New Customer Onboarding

Validate VAT numbers when you first bring on a business customer, not just when they place an order. This prevents delays at the invoicing stage and ensures you apply the correct tax treatment from the start.

Recurring Transactions

VAT registrations can change. A business might deregister, merge with another entity, or change its registration details. For long-term clients, re-validate VAT numbers periodically, at least annually, or whenever invoicing details change.

How VAT Validation Works

VIES (VAT Information Exchange System)

The European Commission operates VIES, a free online service that queries national tax databases in real time. When you submit a VAT number to VIES, it checks against the member state’s records and returns:

Whether the number is valid
The registered name and address of the business (for most countries)
A consultation number you can save as proof of validation

VIES is the authoritative source. Any other validation method is supplementary.

Format Validation

Before querying VIES, verify that the number matches the structural rules for its country code. This catches typos and obviously wrong entries without making a network request. Use a VAT number validator to check format compliance instantly.

Check Digit Algorithms

Many countries include check digits in their VAT numbers. These are digits calculated from the other digits using a specific algorithm (modulus 11, modulus 97, etc.). Check digit validation catches transposition errors and random digit strings that happen to be the right length.

Practical Scenarios

Scenario 1: You Sell Software to a German Company

Your company is registered in France. A German company wants to buy your software. They provide their VAT number (DE format). You validate it through VIES and confirm it’s active. You issue the invoice without VAT, noting “Reverse charge: VAT to be accounted for by the recipient” and including both your FR VAT number and their DE number.

Scenario 2: A Customer Provides an Invalid Number

A customer in Spain gives you a VAT number that fails VIES validation. You can’t apply the reverse charge. You must charge VAT at your country’s standard rate (or the rate applicable to the customer’s country under OSS rules, depending on your registration). Inform the customer and ask for a corrected number.

Scenario 3: Selling to Non-EU Businesses

VAT numbers are an EU concept. Businesses in the US, UK (post-Brexit), or other non-EU countries don’t have EU VAT numbers. Sales to these businesses are exports and are generally zero-rated under different rules (proof of export rather than VAT number validation).

Scenario 4: The UK After Brexit

Since January 1, 2021, UK VAT numbers (format GB + 9 digits) aren’t part of the EU VIES system anymore. The UK operates its own VAT registration check service. If you sell to UK businesses, you need to validate through HMRC’s system, not VIES.

Record-Keeping Requirements

Tax authorities expect you to maintain records that demonstrate due diligence. For each validated VAT number, store:

The VAT number as provided by the customer
The date and time of validation
The result (valid/invalid)
The consultation number from VIES (if available)
The name and address returned by VIES

Keep these records for the retention period required by your country’s tax law, typically 7-10 years.

VAT Numbers on Invoices

A compliant cross-border B2B invoice must include:

Your VAT identification number
The customer’s VAT identification number
A reference to the reverse charge provision (e.g., Article 196 of the VAT Directive)
The net amount without VAT
A clear indication that no VAT is charged

Use an invoice generator to create invoices that include all required fields. Missing information can delay your customer’s VAT reclaim and trigger audit questions for both parties.

Common Mistakes to Avoid

Not Validating Before Invoicing

Some businesses collect the VAT number but never check it. If the number is invalid and you didn’t charge VAT, you may owe the tax yourself. Always validate before applying zero-rate treatment.

Confusing VAT Numbers with Tax IDs

Some countries issue separate tax identification numbers for domestic purposes. These aren’t the same as VAT numbers and can’t be used for cross-border transactions. Ensure you are collecting the VAT-specific identifier.

Assuming All EU Countries Use the Same Rules

While the VAT Directive provides a framework, each country implements it differently. Threshold amounts, registration requirements, and filing frequencies vary. Research the specific rules for each country where you have significant sales.

Ignoring the One-Stop Shop (OSS)

If you sell to consumers (B2C) across the EU, the OSS simplifies VAT reporting by allowing you to declare and pay VAT for all EU countries through a single portal. This doesn’t apply to B2B sales with valid VAT numbers, but understanding the distinction is important.

Frequently Asked Questions

How do I check if a VAT number is valid?

Use the European Commission’s VIES service, which queries national tax databases in real time. You can also use our VAT number validator to verify the format before submitting to VIES. Always save the VIES consultation number as proof that you performed the check.

Do I need a VAT number to sell in the EU?

If you exceed the EU-wide distance selling threshold of 10,000 EUR for cross-border B2C sales, you must register for VAT in the EU. For B2B sales only, the rules depend on where you are established and the nature of the services. Consult a tax advisor for your specific situation.

What happens if a customer’s VAT number becomes invalid after I validated it?

You are protected for transactions where you validated the number at the time of the sale and can prove it. For future transactions, you need to re-validate. If the number is no longer valid, you must charge VAT on subsequent invoices until the customer provides a new valid number.

Are VAT numbers the same across all EU countries?

No. Each country has its own format, length, and check digit algorithm. A German VAT number starts with DE and has 9 digits. A French number starts with FR and has 11 characters after the prefix. The country code prefix always identifies which member state issued the number.

Can I use a sales tax calculator for VAT calculations?

VAT and sales tax are different systems, but the arithmetic is similar. You can use a sales tax calculator to compute the tax amount for a given rate and price. However, determining which VAT rate applies and whether the reverse charge mechanism is in effect requires understanding the specific rules for each transaction type and country.