VAT information exchange system (VIES) - Avalara

The VAT Information Exchange System is an free online service that enables companies to check that other businesses that they are trading with are properly VAT registered. This EU VAT number checking is a major requirement of all companies, and can lead to investigations and heavy fines if not completed.

VIES and the EU Free trade market

The European Union launched its single market initiative in 1993. This did away with border controls between all member states for the movement of goods and services. Since trading goods often triggers a VAT liability, and the EU VAT system is not yet harmonised, it was decided that sales of goods over EU borders would be VAT free – deemed an ‘intra-community supply’ and nil VAT. The only condition was that both companies had to have a VAT number in their countries to cancel out the VAT – .

National Variations in VIES

Whilst most countries participate in the above system, there are some variations, including:

German VIES – which is for German tax registered users only
Italian VIES – which only holds Italian VAT numbers
Spanish VIES – which only holds Spanish numbers

Some other countries still only offer a telephone checking service.

European Online VIES

To help trading companies comply with this requirement, all EU member states have created database of companies within their countries that are VAT registered. This is then shared on the European’s online VIES system. Traders can go online to this to check that their customer does have the VAT number they claim, and the intra-community supply can go ahead without a VAT charge.

How to degister on EU VIES databases

For most countries, receiving a VAT number will automatically trigger entry on the relevant country’s VIEW register. There are though exceptions, which means additional work will be required at the time of registration, or subsequently when the authorities are willing to accept the company. This variation is due to fears of fraud in the EU VAT system around intra-community supplies. Germany, Italy, Spain and Austria may require additional proof.

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