When You Need an Intra-Community VAT Number and How to Get One

If your business buys or sells goods and services across EU borders, intra-community VAT is something you will need to understand. It is not the same as domestic VAT, and the rules around registration, invoicing, and reporting work differently from what most businesses are used to. Getting it right from the start avoids the kind of compliance gaps that tend to surface at the worst possible time.

Key Takeaways

  • Intra-community VAT facilitates EU cross-border trade by allowing VAT-registered businesses in different EU countries to trade under specific VAT rules, distinguishing these transactions from domestic and non-EU trade
  • VAT numbers and the reverse charge mechanism are key: businesses need valid VAT numbers verified through VIES, while in many B2B transactions the seller does not charge VAT and the buyer reports it in their own country
  • Businesses must maintain ongoing compliance, which includes submitting VAT returns and other required reports, verifying VAT numbers, and keeping supporting documents such as invoices and proof of transport
  • The EU’s approach to intra-community VAT is evolving as part of broader digital reforms, including the VAT in the Digital Age (ViDA) package, which businesses with cross-border EU trade should be aware of

What Intra-Community VAT Is and Why EU Cross-Border Trade Needs It

Intra-community VAT is a system that exists in the European Union which governs the movement of goods and services between the various EU Member States by allowing businesses to trade with one another without being subject to additional VAT costs.

It must be noted that intra-community transactions differ from purely domestic transactions and third-country transactions, meaning transactions involving countries outside the EU.

 

Intra-community Transactions:

The main types of intra-community transactions are as follows:

  • Intra-community supplies of goods or services: a business sells products or provides services to other EU member states
  • Intra-community acquisitions of goods and services: a business purchases products or receives services from a supplier in another EU member state

In order for a business to qualify for the above, they must meet the following conditions:

  • Both the supplier and the customer must have a valid VAT number and be registered on VIES (VAT Information Exchange System)
  • The intention of the supplied goods or services must be for business purposes
  • There must be a physical movement of goods from one EU member state to another

For example: a German company sells goods to a VAT-registered business in France.

 

Domestic Transactions:

A domestic transaction occurs entirely within one EU Member State.

For example: a French company sells goods to another French company.

 

Third-Country Transactions:

A third-country transaction involves an EU Member State and a country outside the EU.

For example: a French company buys goods from a company in the United States.

For businesses involved in cross-border EU trade involving three parties, see our guide on VAT triangulation and EU cross-border trade.

When Your Business Needs an Intra-Community VAT Number

What Is an Intra-Community VAT Number?

An intra-community VAT number, also referred to as a Tax Identification Number (TIN) or VAT Registration Number, is required for a business to be able to successfully process intra-community transactions as it allows the government tax office to record transactions between countries.

It is essentially a taxpayer identification number that a company receives automatically upon registering the business. The structure of the number varies between EU Member States and is dependent upon where the company is registered.

For example, in France the number is comprised of:

  • The code FR
  • A two-digit key
  • The company’s nine-digit SIREN number
  • For example: FR 10 123456789

 

Transactions That Require the Intra-Community VAT Number

It is important to remember that the intra-community VAT number specifically applies to the import and export of goods within the EU, not outside.

 

As such, it is imperative that when completing intra-community deliveries, a company ensures that both the seller’s and acquirer’s intra-community VAT number is included on their DEB (goods transaction declaration) or DES (services transactions declaration) during customs inspections.

 

If, for any reason, these documents reflect the incorrect intra-community VAT number, this may affect the calculation of the VAT the company owes.

If a company operates within the duty-free system and thus does not pay VAT, they can make a special request to the tax office to obtain their intra-community VAT number, however this is only required if their purchases exceed EUR 10,000 per year or if they conduct intra-community business.

How the Reverse Charge Mechanism Works in Practice

Under normal conditions, the supplier collects tax from the buyer and passes it onto the government, essentially acting as the tax middleman.

 

Under the reverse charge mechanism this step is cut out, meaning the responsibility for tax is reversed from the supplier back to the buyer such that the tax money goes directly from the buyer to the government.

 

Normally: Seller charges VAT > Buyer pays VAT > Seller pays it to the tax authorities

 

Reverse Charge Mechanism: Seller does not charge VAT > Buyer calculates the VAT > Buyer reports it to the tax authority

 

For qualifying B2B transactions within the EU, the buyer accounts for the VAT directly, and the supplier issues an invoice without it.

 

At the Point of Sale:

  • The seller confirms the tax registration number provided by the buyer is valid
  • The seller issues a tax invoice that is identical to other sales receipts except that the tax is not added to the total charge
  • Instead, the seller must indicate that they are using the reverse charge mechanism
  • A copy of this invoice must be kept on record by both the seller and buyer

 

In the Tax Return:

  • The buyer declares both their purchase (input VAT) and the supplier’s sale (output VAT) in their tax return
  • From a cash payment point of view, these two declarations offset each other whilst providing the tax authorities with full visibility of the transactions

Example scenario:

  • German company buys services from a French company for EUR 10,000
  • Both companies are VAT registered

Without Reverse Charge:

  • French company would add French VAT to its invoice

With Reverse Charge:

  • The French company invoices as follows:

Consulting services: €10,000
French VAT: €0
Total: €10,000
Reverse Charge

 

What Happens Next:

  • Although the French seller did not charge the German buyer VAT, the German buyer needs to account for German VAT on the purchase
  • Assuming German VAT is 19%, the German company calculates: €10,000 x 19% = €1,900
  • It then reports the €1,900 as output VAT on its German VAT return
  • If the German company uses the consulting services for taxable business activities and is entitled to deduct the VAT, it can generally claim the same €1,900 as input VAT

 

Why This Is Called “Reverse Charge”:

  • The normal process is: French seller charges VAT, collects it, pays it to the tax authority
  • With reverse charge: German buyer calculates German VAT, reports it, deducts it if eligible
  • The tax obligation has shifted from the seller to the buyer

For more information on reverse charge invoices, see our guide on reverse charge VAT invoices explained.

How to Apply for an Intra-Community VAT Number

Registration Process

The requirements for VAT registration vary between EU Member States, however the general steps are as follows:

1. Determine if you need to register for VAT
If you are a business that sells goods or services in the EU and your sales exceed €10,000, you would need to register for VAT.

2. Gather the required documentation

  • Business registration documents
  • Corporate documents
  • Tax certificates
  • Proof of activity
  • Proof of identity
  • Proof of address
  • Transaction evidence
  • Local forms and translations

This list is not exhaustive as additional documents may be required depending upon the country in which you are registering.

3. Complete the VAT registration form
Once you have gathered the documents above you will need to complete a VAT registration form, providing details such as your business name, address, tax identification number, information about your suppliers, and turnover. In many instances the form must be completed in the local language.

4. Submit the VAT registration form
Submit the completed form to the local tax authority in the country in which you are registering. Depending on the country, you will either need to submit the form online or in person.

5. Wait for your EU VAT registration number
Issuance of your EU VAT number can take anywhere from a few days to several weeks depending on the registration process and timings in the various countries.

How to Verify the Number Is Active Before Using It

You can check the validity of the VAT number in the VAT Information Exchange System via the following link: VIES on-the-Web

The Ongoing Compliance Obligations After Registration

Reporting Requirements

 

Once a business has been registered, they are required to document their intra-community transactions via regular filings. The main filings are as follows:

 

VAT Return: summarises all acquisitions, supplies and domestic sales within a reporting period. Sellers declare zero-rated intra-community supplies here and buyers record their acquisitions.

 

EC Sales List (ECSL): comprises a list of all zero-rated B2B sales to other VAT-registered entities in the EU. This list assists the tax authority in matching the sellers’ and buyers’ data across borders and investigating discrepancies.

 

Intrastat Report: records statistical data on goods movements between member states once annual thresholds are exceeded. VAT reporting is separate from Intrastat reporting but they both use the same underlying information.

 

The reporting frequency of these filings is determined by the business’s member state and size.

For example:

  • The Netherlands requires a monthly ECSL
  • Ireland allows quarterly ECSLs for lower volumes

Follow-up audits or penalties may be initiated due to late or inconsistent filings.

 

Record Keeping

In order to prove that their intra-community transactions are valid, buyers and sellers must keep evidence in the form of:

  • Invoices and credit notes
  • Proof of transport or delivery
  • VIES verification logs
  • Contracts
  • Purchase orders
  • Correspondence

 

This list is not exhaustive as additional documents may be required depending upon the country in which you are registered.

Depending on national requirements, documents must be kept for 5 to 10 years in an accessible digital format.

 

For a broader view of how EU VAT rules are evolving and what businesses with cross-border trade need to prepare for, see our guide on VAT in the Digital Age (ViDA).

Frequently Asked Questions

1. Are intra-community and domestic VAT numbers the same thing?

Yes, on an underlying basis both numbers are the same. However, a domestic VAT number identifies your business for VAT purposes within your own EU Member State, whilst an intra-community VAT number is your VAT identification number when used for qualifying transactions with businesses in other EU Member States. It is only visible on VIES once it has been separately activated for intra-community trade within the EU.


2. What if a buyer’s VAT number is inactive in VIES?

The tax authorities may challenge the 0% VAT rate application if a company issues an invoice without a valid EU VAT number. Consequences could include the transaction being reclassified as a domestic supply, the seller having to charge VAT at the local rate, and the company facing penalties for incorrect VAT reporting.


3. Do all B2B services fall under the reverse charge?

No. Whilst the reverse charge mechanism is the general rule for many cross-border B2B services within the EU, it is not a blanket rule covering every B2B service. Exceptions exist, including property-related services, event admission, passenger transport, catering, and short-term vehicle hire. Always check the service-specific place of supply rules.


4. How long does intra-community VAT number activation typically take?

Activation timeline depends on the country in which you are registering, with some countries taking between three and six weeks. In Spain, for example, the process has an official legal maximum timeline of three months.

Next Steps

If your business is involved in cross-border trade within the EU, ensuring your intra-community VAT number is correctly registered and active on VIES is the starting point. From there, maintaining accurate records, filing returns on time, and verifying your trading partners’ VAT numbers before each transaction are the ongoing obligations that keep your compliance position clean.

 

VAT IT supports businesses in managing their EU VAT registrations and ongoing compliance obligations across multiple member states.

 

Get in touch with our team to discuss your intra-community VAT position.

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