Every business subject to value-added tax (VAT) in the EU receives an intracommunity VAT number when it registers. This tax ID is particularly important for cross-border trade. But how can you check a European partner’s intracommunity VAT number, and what tools can you use to check it? What is VIES and what does it stand for? In this article, we’ll answer these common questions and give an overview of the VIES system.

What’s in this article?

• What is VIES, and what is it used for?
  
• How does VIES work?
  
• How do you use the VIES system?
  
• What are the possible results?
  
• What should you do if you can’t confirm a VAT number through VIES?
  

What is VIES, and what is it used for?

VIES stands for the EU’s automated “VAT Information Exchange System.” The European Commission developed this free online tool so anyone can check the validity of EU intracommunity VAT numbers for cross-border transactions. Checking VAT numbers is key for trading within the EU. It helps businesses ensure that the tax identification number provided by a trading partner is valid and prevents invoicing errors.

The VIES system is designed to quickly verify VAT numbers for cross-border trade within the EU, helping to reduce VAT errors and fraud. In essence, it’s an administrative tool for managing trade between EU countries.

How does VIES work?

The tax authorities of each EU member state are required to maintain an up-to-date database of all persons registered for VAT, which can be accessed through the VIES system. The VIES system automates the electronic exchange of information between EU tax authorities, allowing VAT numbers to be verified instantly.

How do you use the VIES system?

You can access the VIES system on the EU website. To check your European partner’s intracommunity VAT number, fill out the required fields (country code and VAT number).

Note that you cannot verify an intracommunity VAT number using just a name or company name.

What are the possible results?

When you use the verification tool, you can get one of two results:

• The VAT number you entered is valid and belongs to a business authorised to conduct cross-border trade within the EU.
  
• The VAT number you entered is invalid, either because it doesn’t exist, hasn’t been activated, or isn’t authorised for cross-border transactions within the EU.
  

You can also use a tool such as Stripe Tax to validate intracommunity VAT numbers and automate tax calculations. Stripe Tax determines your customers’ tax jurisdictions and tells you where and when you need to register for tax collection.

What should you do if you can’t confirm a VAT number through VIES?

If the VIES tool indicates an invalid intracommunity VAT number, you should contact your European partner for clarification. The foreign company must then verify its VAT number by providing a certificate of tax liability from its country’s tax authorities. If the company cannot provide a valid VAT number, it will need to comply with the French VAT system and pay the required taxes.

You can also contact the national tax authorities to verify the VAT number yourself. Note that while national tax authorities can verify the validity of a VAT number and confirm the existence of a name and address, they cannot disclose specific details to protect the operator’s identity.