Intra-Community Value Added Tax Number (VAT Number)

How to Verify an Intra-Community VAT Number

Companies engaged in business transactions with EU customers or suppliers should verify the validity of a VAT Number to prevent fraud and avoid financial risks.

This verification can be done using the VAT Information Exchange System (VIES), an official online service that checks the legitimacy of a Value Added Tax Number.

Best Practices for VAT Number Verification

• Always confirm that the VAT Number appears correctly on invoices before processing transactions.
• If a business partner’s VAT Number is invalid, they must provide a certificate of VAT liability from their tax authority.
• If they fail to do so, the transaction may need to be invoiced under the French VAT system (or the VAT system of the buyer’s country).

What to Do If an EU Partner’s VAT Number Is Invalid

If the intra-Community VAT Number of an EU partner is invalid, the partner must:

1. Contact their local tax authority to correct the issue.
2. Provide proof of their VAT registration.
3. If the company is based in France, the responsible authority is the Company Tax Office (SIE).

Important: There is no European database that allows searching for an intra-Community VAT Number by company name or business name.

When Can a VAT Number Be Invalidated?

A company’s Value Added Tax Number may be invalidated by the tax authorities under specific circumstances. The business will be notified of the reason for the invalidation.

Reasons for VAT Number Invalidation

1. Providing False Information
   • If a company provides incorrect information when applying for a VAT Number, it may be revoked.
2. Failure to Update Business Information
   • Companies must notify tax authorities of any changes, such as ownership, address, or status. Failure to do so can lead to invalidation of the VAT Number.
3. Involvement in VAT Fraud
   • If a company is directly or indirectly involved in VAT fraud within France or another EU country, its intra-Community VAT Number may be invalidated.
   • Fraudulent activities include:
     • Failure to submit VAT declarations
     • Not responding to tax authority requests within 30 days
     • Providing repeated incorrect VAT information
     • Obstructing tax audits or investigations

Example of VAT Fraud

A company is created for the sole purpose of collecting VAT, then dissolved to avoid paying the tax back to the government. This is a fraudulent scheme and will lead to VAT Number cancellation and potential legal consequences.

1. Non-Compliance with Tax Representation
   • A non-EU company conducting taxable business in the EU must appoint a tax representative.
   • Failure to do so may result in VAT Number revocation.

How to Restore an Invalidated Value Added Tax Number

A company whose intra-Community VAT Number has been invalidated can request reinstatement once the issue is resolved.

Steps to Restore a VAT Number

• Correct any false or missing information
• Provide accurate data if invalidation was due to repeated submission of incorrect details
• Cooperate with tax audits and regulatory checks
• Submit an official request justifying why the VAT Number should be reinstated

Once the tax authorities confirm compliance, the Value Added Tax Number will be restored without delay.

Who to Contact for Assistance?

For inquiries or assistance regarding an intra-Community VAT Number, businesses should contact their local Company Tax Service (SIE).

Key Takeaways

• A VAT Number is essential for businesses trading in the EU
  – Companies liable for VAT must obtain an intra-Community VAT Number
  –  VAT-exempt companies can apply voluntarily for a VAT Number
  – Verifying VAT Numbers through VIES prevents fraud
  – VAT Numbers can be invalidated due to fraud, misinformation, or non-compliance
  –  Invalidated VAT Numbers can be restored once compliance issues are resolved