More than 160 countries worldwide are registered for VAT purposes and have a VAT number. This acronym stands for value-added tax. With a few exceptions, most businesses operating in these countries are legally required to charge, declare and deduct this tax at each stage of the supply chain. Under certain circumstances, American companies might need to conduct a VAT number lookup.
The easiest way to find a company's VAT ID is to check its invoices and other legal documents. This number may also be listed on its website.
VAT is a consumption tax that applies to all products and services that are sold and bought in the European Union, Australia, China, Japan, Mexico, New Zealand and other regions around the world. In Canada and Australia, it's called GST or goods and services tax. Each country has its own VAT rate, which is mostly based on taxpayers' consumption.
The standard VAT rate in Norway, for example, is 25 percent. In Japan, it's only 8 percent. The value-added tax in Denmark and France is 20 percent. Hungary charges the highest VAT rate at 27 percent.
This tax is imposed on all commercial transactions in the supply chain, from production to sales. VAT numbers have the role of identifying the place of transaction as well as the tax status of the customer. Companies are required to list their VAT number on invoices. American companies deal with VAT when they sell software and other digital products in Europe, hold an inventory of goods in the EU or open branches in countries that charge VAT.
If you're doing business with suppliers, vendors or partners located in a VAT country, you may need their VAT number for invoicing purposes and legal compliance. There are a number of things you can do to find the VAT registration number of a company, both online and offline.
Start by checking the invoices and other legal documents issued by that company. EU businesses, for example, list their VAT ID along with their name and contact details on invoices. Billing details will usually include a brief description of the goods or services provided as well as the number of units, the price per item, the total cost excluding VAT, the total amount of VAT, the final price including VAT and other relevant information.
Make sure you know what to look for. A typical EU VAT registration number starts with the country code, such as AT for Austria, DE for Germany or PL for Poland, followed by eight to 12 characters. Be aware that each country uses a different VAT format. In Austria, for example, the VAT number starts with AU followed by nine characters, the first one always being a "U."
Some EU countries, such as the Netherlands, require local businesses to list their VAT ID number on their websites. Many companies, though, list this number at the bottom of the home page or in other sections without being required to do so.
Once you've found its VAT ID, use the VAT Information Exchange System to check its validity. Head over to the European Commission’s website and access VIES VAT number validation. Select the country where the company is located, enter its VAT number and click Verify. If the number is valid, the system will display the company's name and physical address. You may also use a different VAT checker, such as Avalara's VATlive or Vatcheck.eu.
If you're doing business with a U.K. company, call HMRC at +44 2920 501 261 to get the information you need. This service is available Monday to Friday and handles general VAT inquiries. Most countries have a VAT help line, so don't hesitate to use it.
Another option is to contact the company in question and request its VAT registration number. A legitimate business should have no problem providing this information.