The Commission’s service gives businesses access to certain
parts of the system of electronic information exchange used by tax
authorities, known as the "VAT Information Exchange System" or
"VIES". The new service exists to save time and administrative
costs both for businesses and tax administrations.
When to use the validation service
Under current VAT rules, supplies of goods made by a trader in
one Member State to a trader in another Member State are exempt
from VAT in the country of origin, on the basis that they will be
taxed in the country of destination. However, a trader making
intra-EU supplies must be sure that his customer is subject to VAT
in another Member State before despatching the goods free of VAT as
otherwise he may have to pay the VAT himself.
Until now, a supplier wishing to confirm the validity of the VAT
identification number provided by his customer had to contact his
own tax administration which would check the VIES and confirm that
the number quoted was valid. This is part of the Commission's work
to make doing business in the EU's internal market as simple as
possible, by removing practical obstacles which are a headache for
businesses.
The on-line service allows checking of the databases of VAT
registration numbers which each Member State maintains as part of
the VIES.
The database of VAT identification numbers is only one aspect of
the VIES. Members of the public logging on to the site will not be
able to see any of the other VIES information which is used by
Member States' taxation authorities for VAT control purposes and
which should, in the interests of taxpayer confidentiality, remain
reserved for the use of taxation authorities only.
Under the current VAT system, all intra-EU supplies between
traders subject to VAT are exempted from VAT in the country of
sale, the tax being declared at destination by the receiving
trader. Normally the customer provides his VAT identification
number to the supplier when he orders the goods. However, it is the
responsibility of the supplier to confirm that his customer is
indeed VAT registered in another Member State before he sends the
goods free of VAT. Otherwise the supplier may be obliged to pay the
VAT himself.
Up to now, a supplier wishing to confirm the validity of the VAT
identification number provided by its customer generally had to
contact its own tax administration which would check the VIES and
confirm that the number quoted was valid. The new service cuts out
the intermediary step.
The tool is located at: http://europa.eu.int/vies
