If your company is foreign and wants to do business with companies in other European Union countries, the EU VAT number is one of the first things worth understanding. Whether those transactions can be treated as intra-community depends on it.
In this guide we explain, step by step, what this number is, what role VIES plays, which transactions require it, what is needed before applying, what the procedure looks like, how long it can take and which obligations a single EU VAT number does not cover.
What the EU VAT number is
The EU VAT number (NIF-IVA in Spain) is the VAT identification number that allows a company to carry out transactions with companies in other European Union countries. It is the number that identifies your company in those transactions.
Its format is simple: the country code goes in front of the tax number. For example, for Spain it is written as ES followed by the company's NIF (ES + NIF).
It is also known as an intra-community VAT number. In this guide we use both names for the same number.
Having the number is the first step, but not the only one: to be useful in your transactions with other EU companies, it must be active. That is what VIES is for.
What VIES is and why it matters
VIES is the European system used to check whether a VAT number is active. It is the reference that matters to your European customers and suppliers when they do business with you.
That is why having the number is not enough: it must appear in VIES. If your number does not appear in VIES, your European customers and suppliers cannot apply the VAT exemption to intra-community transactions with you.
Which transactions require it
The EU VAT number is needed to carry out intra-community supplies and acquisitions of goods and certain services between businesses within the EU. These are transactions between companies in different European Union countries.
Without it, those transactions cannot be treated as intra-community.
That said, the EU VAT number is not requested just in case: the application must meet the prerequisites set out below.
This also applies to companies from outside the EU. For example, a US LLC can have an EU VAT number if it carries out intra-community transactions. As a company from outside the EU, it will also need a fiscal representative to meet its VAT obligations.
Prerequisites
Before applying for the EU VAT number, your company needs to have the following:
- A tax number for the company in its country of registration.
- Documents proving that the company exists and the signatory's power of attorney, with an official translation and apostille where required.
- Genuine transactions that justify the application for registration in the register of intra-community operators.
The documents usually need to be translated and apostilled: the tax authorities may require an official translation of documents in a foreign language, and foreign public documents generally require a Hague apostille.
These preliminary procedures (documentation, obtaining the tax number and registration in the register of intra-community operators) are not included in the annual fee and are quoted separately.
Step-by-step procedure
The procedure follows four steps, in this order:
- Tax number: having the company's tax number in its country of registration.
- Documentation: gathering the documents proving that the company exists and the signatory's power of attorney, with the official translation and apostille where required.
- Application: filing for registration in the register of intra-community operators, justified by genuine transactions.
- Decision: the tax authorities decide on the registration application.
If the registration is granted, remember what we saw about VIES: the number must appear as active so that your European customers and suppliers can apply the VAT exemption.
You can read the official information on the register on the Spanish Tax Agency website: Register of intra-community operators (Spanish Tax Agency) (opens in a new tab)
Timeframes and possible refusal
The tax authorities have up to three months to decide on registration in the register of intra-community operators.
If they do not decide within that period, the application is deemed refused. In other words, the absence of a reply does not amount to approval.
Bear this in mind when planning the start of your transactions with other EU companies.
What a single EU VAT number does not cover
A single EU VAT number allows you to carry out intra-community transactions with companies in any EU country. However, it does not cover every obligation your company may have in other countries.
For example, storing goods in another country or selling there to end consumers may require additional registrations and accounting in that country.
Those obligations in other countries, like accounting and tax returns, are not included in fiscal representation and are contracted separately.
That is why, before you start trading, it is worth reviewing in which countries you will store goods or sell to end consumers.