An intracommunity value-added tax (VAT) number is required to do business across borders within the European Union. But what exactly does this VAT number do, and how can you check yours (and those of your commercial partners)? This article introduces the concept of an intracommunity number, with a detailed explanation of the transactions it affects. It also explores the impact that intracommunity transactions have on VAT due.

What’s in this article?

• What is the intracommunity VAT number, and what is it used for?
  
• How is the intracommunity VAT number structured?
  
• Which companies need an intracommunity VAT number?
  
• How is intracommunity VAT calculated?
  
• Where can I find the intracommunity VAT number?
  

What is the intracommunity VAT number, and what is it used for?

An intracommunity VAT number is a taxpayer identification number that a company receives automatically on registering the business. The number identifies the company within the EU and facilitates customs transactions and VAT repayments. In France, it is issued by the SIE (government business tax office).

You must include the intracommunity VAT number on all government and commercial documentation, such as invoices (including invoices between companies registered in the EU), quotes, VAT returns, goods transaction declarations (DEB), and services transaction declarations (DES).

How is the intracommunity VAT number structured?

The structure of the intracommunity VAT number depends on where the company is registered. In France, the number starts with the code FR, followed by a two-digit key and the company’s nine-digit SIREN number.

For example, here are two French intracommunity VAT numbers: FR 89 128370925 and FR 10 123456789.

Note: the SIREN number is a unique business identification number that is also issued when registering the company. You can find yours on the National Industrial Property Institute (INPI) website.

Which companies need an intracommunity VAT number?

All VAT-registered companies have their own intracommunity VAT number. The number is particularly important for business transactions within the EU—such as sales and purchases from France and other member states—because it allows the government tax office to record transactions between countries.

Companies that operate within the duty-free system (and therefore do not pay VAT) can make a special request to the tax office to obtain their intracommunity VAT number. They are only required to do this if their purchases exceed 10,000 euros per year, or if they conduct intracommunity business.

Transactions that require the intracommunity VAT number

The intracommunity VAT number specifically applies to the import and export of goods within (and not outside) the EU. During customs inspections, companies completing intracommunity deliveries must present their DEB (goods transaction declaration) or DES (services transaction declaration), which includes the seller’s and the acquirer’s intracommunity VAT number.

Companies absolutely must check the intracommunity VAT number of each of their business partners before completing the transaction because an incorrect number may affect the calculation of the VAT they owe.

How is intracommunity VAT calculated?

Intracommunity VAT is calculated per the traditional VAT calculation applied to the exchange of goods and services in France. Generally, exports (defined here as intracommunity deliveries from France) are exempt from VAT in France if the acquirer is also subject to VAT in the EU country where it is registered. This is because the acquirer pays VAT on its purchases in its country. However, imports of goods into France are liable for tax at their applicable rate of VAT in France. The company can then deduct this VAT when filing its VAT return. Services are taxed in the buyer’s country.

Where can I find the intracommunity VAT number?

You can easily find a company’s intracommunity VAT number on its invoices, its VAT returns, and its goods or services transaction declarations. To avoid errors during a transaction, check your European business partner’s intracommunity VAT number using a verification tool.

You can also access a service such as Stripe Tax that confirms intracommunity VAT numbers and makes it easier for you to comply with tax requirements. Stripe Tax automates the calculation of tax on your transactions and indicates when and where you need to register to collect taxes. To find out how this solution can meet your company’s tax needs, contact one of the Stripe experts.

If you can’t find your own VAT number, contact your government tax office (SIE in France) as soon as possible so the office can help you locate it.