VAT registration campaign

Worldline has identified that we do not have a Value Added Tax (VAT) number of all our clients in  our systems or that the domestic VAT number or VAT registration which we have is not registered with the European Union repository “VIES” (VAT Information Exchange System) for intra-Community supplies.

Due to EU tax laws and regulations, Worldline (Europe) S.A. will be obliged to issue its invoices with value added tax (VAT) if the merchant is not registered at national VIES database or if the merchant is not liable for VAT registration locally. 

The value added tax identification number, also known as a VAT registration number, is the unique number that identifies a taxable person (business) or non-taxable legal entity that is registered for VAT.

A business is obliged to register for VAT in the following cases:

• when it carries out the supply of goods or services taxed with VAT;
• when it makes an intra-EU acquisition of goods;
• when it receives services for which it is liable to pay VAT;
• when it supplies services for which the customer is liable to pay VAT;

In the EU, a VAT identification number can be verified online at the EU's official VIES website. It confirms that the number is currently allocated and can provide the name or other identifying details of the entity to whom the identifier has been allocated. However, many national governments will not give out VAT identification numbers due to data protection laws.

Under normal business to business rules, Worldline is allowed to apply a VAT zero rate on the invoice to our customers. One of the conditions for the VAT zero rate is that we would need a valid VAT number of our customer to substantiate that our customer is indeed a business. In absence of a valid VAT number, Worldline needs to charge VAT on the invoice. There is a risk that this VAT would not be deductible for you and therefore is an extra cost. As you are a valued customer, we would like to explore whether this can be avoided.

In principle, everyone that is in business would qualify as a taxable person for VAT purposes. Even if a company only provides supplies that are exempt from VAT, such as financial services, such a company would still qualify as a taxable person for VAT purposes. Whilst this may not have any impact in a domestic situation, having a VAT number is important when a company is involved in cross-border activities.

In case your VAT number applies for an ‘intra-EU’ status, according to the EU VAT rules we no longer have to charge non-deductible VAT on our cross-border supplies to you. You may however need to report VAT on the receipt of these supplies through your own VAT return. However, in most instances such a local VAT obligation would exist anyway, regardless of whether we charge VAT on our invoice or not. In absence of an active VAT number, there may even be a risk on double taxation. Regardless of the fact that we charge VAT on our invoice, the tax authorities in your jurisdiction may find that you are responsible for VAT and may choose to assess you for this. We find it important that our customers do not experience any unpleasant surprises such as these by having us as a supplier and therefore kindly request you to carefully consider this.

We do note that there is one exception for registering. Local jurisdictions may apply a threshold for VAT registrations and if you remain to be under that threshold a local VAT registration may not be required. In such case, we would charge VAT on the invoice.

With the introduction of the single market on 1 January 1993, fiscal customs based controls at internal frontiers were abolished and a new VAT control system was put in place for intra-Community trade. The most significant benefit was the reduction of the administrative burden on companies;

Under the new VAT system intra-Community supplies of goods are exempt from VAT in the Member State of dispatch when they are made to a taxable person in another Member State who will account for the VAT on arrival. Therefore any taxable person making such supplies must be able to check quickly and easily that their customers in another Member State are taxable persons and do hold a valid VAT identification number. For that purpose each tax administration maintains an electronic database containing the VAT registration data of its traders. Such information includes the VAT identification number, the trader's name, the trader's address.

A computerized VAT Information Exchange System (V.I.E.S.) was set up to allow for the flow of the data held across the internal frontiers which:

• enables companies to obtain rapidly confirmation of the VAT numbers of their trading partners
• enables VAT administrations to monitor and control the flow of intra-Community trade to detect all kinds of irregularities

The structure of a VAT identification number in each member state is given in the table below.

VAT identification number structure

The VAT ID can be verified on the website http://ec.europa.eu/taxation_customs/vies/vatRequest.html.

Step 1: Select the Member State and type in the VAT Number. Click “Verify” to check the VAT ID.

Example Germany:

Example Austria:

Step 2: Verify if the number is valid/invalid.

The VAT number needs to be registered/updated by the national tax administration. Under the following links the national tax administrations can be contacted directly:

More information can be found on the Website of the European Commission, department for taxation and customs:
http://ec.europa.eu/taxation_customs/vies/faq.html