Checking your customer's VAT number: when it is required and how

You sell to a wholesaler in Antwerp and invoice at 0% VAT. Rightly so, because it is a supply to a business owner in another EU member state. But did you know the Tax Authority can refuse that zero rate if the wholesaler's VAT number was not valid at the time of delivery? Not when the number was missing from your invoice, but when it was incorrect. In this article you will read when you have to check a VAT number, how often, and what such a check does and does not prove.

Since 2020 it is no longer a formality

Until the end of 2019, a VAT number on the invoice was mainly an administrative requirement. The European "quick fixes" of 1 January 2020 changed that. For an intra-Community supply, meaning a sale of goods to a VAT-liable customer in another member state, two material conditions have applied since then: your customer has a valid VAT identification number from a member state other than the one the goods depart from, and you record the supply correctly in your intra-Community transactions statement (ICP).

Material here means: if the condition is not met, the right to 0% lapses and you should simply have charged 21%. During an audit this comes back as an additional assessment, including tax interest and often a fine. The fact that you acted in good faith is of little help if you cannot show anywhere that you checked the number.

For services to EU business owners it works slightly differently: there the VAT is usually reverse-charged to your customer, and even then you want to be sure you are supplying a business owner and not a private individual. A valid VAT number is the common proof of that.

When do you check?

The law names no frequency. Practice does, and it comes down to four moments:

1. With a new customer, before the first invoice. This is the moment at which a wrong number is cheapest to correct.
2. At a change. A customer who changes legal form, merges or relocates to another member state often gets a new number. The old one sometimes still "exists" for a while in your records.
3. Before every ICP statement. Run through the numbers of all customers in the statement. A number that has since been withdrawn leads to a rejection of the statement or questions afterwards.
4. For large amounts. For a one-off order with five figures, an extra two-minute check is no excess.

You do not have to check per invoice, provided you can show that you checked the number at a reasonably recent moment. What "reasonably recent" means is set out nowhere; per quarter, tied to your ICP statement, is a rhythm you can explain well during an audit.

Where do you check?

All checks ultimately run through VIES, the European Commission's system that verifies a number with the tax authority of the country that issued it. You can do that manually on the VIES website, and for a single number that is fine.

It gets trickier when you want to keep the proof, or when you want to check twenty customers at once. A screenshot is not strong evidence, and VIES only gives a verification number when you include your own VAT number as the requester. That is why we built a free connector that lets you do it through your AI assistant: you ask "check this customer's VAT number", the connector queries VIES at that moment and returns the result, the date and the verification number. How that proof works and why a screenshot is not enough, you can read in <a href="https://www.iwebdevelopment.com/blog/btw-nummer-controleren-verificatienummer">You checked the VAT number. Now prove it</a>.

What a valid number does and does not prove

"Valid" means the number exists, is active and was issued for intra-community transactions. It does not automatically mean it belongs to your customer. Someone can put a valid number from another company on an order form.

That is why you check the name and address alongside the number. Some member states return that data with a VIES check, others do not; the Netherlands, for example, does not. For a Dutch number you can take the name and address from the Trade Register and compare them with the registration. The connector does that on request automatically and tells you honestly when a member state does not verify the data. That is better than a green checkmark that promises more than it delivers.

Also good to know: a number that is valid today may be revoked next month. The check applies on the date of the check. Hence that quarterly rhythm.

What if the number turns out to be invalid?

First ask the customer to provide the number again; most errors are typos or a mix-up between the turnover tax number and the VAT identification number. If it stays invalid, you treat the customer as a private individual and charge Dutch VAT. If the customer does not want that, it is their problem to sort out with their own tax authority, not yours to absorb. We consider that a hard but fair rule: the risk of the zero rate lies with the seller.

And if VIES itself is unreachable, which happens more often than you would think, then "cannot be checked" is not the same as "invalid". Record that you tried, and try again later.

How to turn it into a routine

Put the check in three places: when creating a new customer, in your quarterly checklist before the ICP return, and as a standard question for an order above an amount you choose yourself. With the connector each check costs one sentence in your AI assistant, and the proof comes with it automatically. A hundred verifications per month are free; for most entrepreneurs that is more than enough.

Want to try it yourself? Connect AI VAT Number Validation for free →

Try these questions in your own AI assistant

• "Check VAT number DE123456789 and give me the verification number."
• "Is this VAT number valid, and does it belong to a company at this address?"
• "Check the VAT numbers of these five customers before I file the ICP return."