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.
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:
In order for a business to qualify for the above, they must meet the following conditions:
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.
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:
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.
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:
In the Tax Return:
Example scenario:
Without Reverse Charge:
With Reverse Charge:
Consulting services: €10,000
French VAT: €0
Total: €10,000
Reverse Charge
What Happens Next:
Why This Is Called “Reverse Charge”:
For more information on reverse charge invoices, see our guide on reverse charge VAT invoices explained.
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
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
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:
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:
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).
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.
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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