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What is a VAT number?

By / In UK VAT / February 20, 2024

VAT  – Value-added tax is a consumption tax charged on the value added of goods and services as they move through the supply chain. This tax in different countries has different names for example GST – goods and service tax. Businesses registered for VAT  must collect the consumption tax at each stage of the supply chain, although it is ultimately paid by the end consumer. Collecting the tax on behalf of the government is a requirement for these businesses. The main difference from the sale tax is that VAT is charged at each stage of a sale and sales tax is only at the last stage where consumption takes place.

Filing regular tax returns and making payments based on the amount of tax collected is required for businesses registered for Value Added Tax or sales tax in most countries. The VAT number is used to identify the business on tax invoices and payments, ensuring the correct amount of tax is paid.

 

The purpose of VAT

The main goal of a VAT number is to identify and monitor businesses that have registered for VAT with the tax authorities. Businesses without a valid VAT number or those that are not registered for VAT may face penalties and fines.

Regular VAT returns are submitted to tax authorities, detailing collected and paid VAT within a timeframe. Identifying businesses on returns, ensuring correct VAT collection and payment, and tracking payments and refunds is the role of the VAT number. It is important to differentiate between Tax ID and VAT number  – tax ID means that a business is registered with a specific tax authority for direct taxes. Usually, companies need additional application forms to obtain VAT registration and VAT certificate.

Find a company VAT number

To ensure compliance with varying VAT rules, businesses trading within the European Union (EU) need to check the VAT status of their trading partners. A VAT number is critical in this process.

 

Obtain VAT

To obtain a VAT number, a business must follow these 4 steps:

  1. Determine whether registration as a VAT payer is required based on turnover and economic activity of the company  (for example, revenue is more than a country threshold). In some countries, voluntary registration is also possible;
  2. Collect the necessary information: the name of the organization, address, tax identification number, and other documents;
  3. Fill out and submit registration forms to the tax office;
  4. Get a VAT certificate.

Order VAT registration now

 

The format of VAT number

Usually, the number in the VAT certificate consists of numbers but when a company uses it for international transactions they need to add two letters as a sign of the country of origin. For intra-EU trade, the format of VAT numbers generally follows a standard pattern, consisting of two letters followed by a series of numbers. The initial two letters signify the country in which the business is registered, while the subsequent numbers constitute a unique identification code for the business. For instance, VAT number assigned in France might be formatted as follows:

FR 123456789

The format of VAT numbers in the United Kingdom differs for the Northern Ireland region – these companies need to add XI at the beginning of their number when they trade with the EU.

 

Countries where VAT is implemented:

Country Standard VAT Rate % Reduced rate %
Afghanistan 10
Albania 20 6
Algeria 19 9
Andorra 4.5 0; 1; 2.5
Angola 14 0; 1; 2; 5; 7
Anguilla 13 0
Antigua and Barbuda 15 0; 14
Argentina 21 2.5; 5; 10.5
Armenia 20 0
Australia 10 0
Austria 20 10; 13
Azerbaijan 18 0
Bahamas 10
Bangladesh 15 5; 7; 10
Barbados 17.5 0; 7.5
Bahrain 10 0
Belarus 20 0; 10
Belgium 21 0; 6; 12
Belize 12.5 0
Benin 18 0
Bhutan 7 0
Bolivia 13 0
Bosnia and Herzegovina 17
Botswana 12 0
Brazil 17; 18 4; 7; 12
British Virgin Islands 21
Bulgaria 20 9
Burkina Faso 18 0; 10
Burundi 18 0; 10
Cabo Verde 15 0; 8
Cambodia 10
Cameroon 19.25 0
Canada GST/HST: 5, 13, 15
Central African Republic 19 0; 5
Chad 18 0; 9
Chile 19
China 13 1; 1.5; 3; 6; 9
Cook Islands 15 0
Colombia 19 0; 5
Comoros 10
Congo (Dem. Republic) 16 0; 8
Congo (Republic) 18 0; 5
Costa Rica 13 1; 2; 4
Côte d’Ivoire 18 0; 9
Ivory Coast 18
Croatia 25 5; 13
Cyprus 19 0; 5; 9
Czech Republic 21 12
Denmark 25 0
Djibouti 10 0
Dominica 15 0; 10
Dominican Republic 18 0; 16
Ecuador 12 0
Egypt 14 0; 5
El Salvador 13 0
Equatorial Guinea 15 0; 6
Eritrea 3; 5; 10; 12
Estonia 22 0; 9
Eswatini (formerly Swaziland) 15 0
Ethiopia 15 0
Faroe Islands 25 0
Fiji 9 0
Finland 24 0; 10; 14
France 20 2.1; 5.5; 10
Gabon 18 0; 10
Gambia 15 0
Georgia 18 0
Germany 19 7
Ghana 12.5 0; 3
Greece 24 6; 13
Grenada 15 0; 10
Guatemala 12 0
Guinea 18 0
Guinea-Bissau 17 0; 10
Guyana 14 0
Haiti 10
Honduras 15 0
Hungary 27 5; 18
Iceland 24 0; 11
India 12; 18 0; 5
Indonesia 11 0
Iran 9 0
Ireland 23 0; 4.8; 9; 13.5
Isle of Man 20 0; 5
Israel 17 0
Italy 22 4; 5; 10
Jamaica 15 2; 10
Japan 10 8
Jersey 5 0
Jordan 16 0; 2; 4; 5; 10
Kazakhstan 12 0
Kenya 16 0; 8
Kiribati 12.5 0
Korea 10
Kosovo 18 8
Kyrgyzstan 12 0
Laos 7 0
Latvia 21 5; 12
Lebanon 11 0
Lesotho 15 0; 10
Liechtenstein 7.7 2.5; 3.7
Lithuania 21 5; 9
Luxembourg 17 8; 14
Madagascar 20 0
Malawi 16.5 0
Malaysia 10
Maldives 6 0
Mali 18 5
Malta 18 0; 5; 7
Marshall Islands 2-4
Mauritania 16
Mauritius 15 0
Mexico 16 0
Micronesia 5
Moldova 20 0; 8
Monaco 20 2.1; 5.5; 10
Mongolia 10 0
Montenegro 21 0; 7
Morocco 20 0; 7; 10; 14
Mozambique 17 0; 5
Myanmar (formerly Burma) 5
Namibia 15 0
Nepal 13 0
Netherlands 21 9
New Zealand 15 0
Nicaragua 15 0
Niger 19 0; 5; 10
Nigeria 7.5 0
Niue 12.5 0
North Korea 15
North Macedonia (formerly Macedonia) 18 5; 10
Norway 25 0; 12; 15
Oman 5 0
Palau 10
Pakistan 17 0-16
Palestine 16
Panama 7
Papua New Guinea 10 0
Paraguay 10 5
Peru 21 0
Philippines 12 0; 5
Poland 23 5; 8
Portugal 23 6; 13
Romania 19 5; 9
Russia 20 0; 10
Rwanda 18 0
Saint Kitts and Nevis 17 10
Saint Lucia 16 0; 10
Saint Vincent and the Grenadines 16 0; 11
Samoa 15 0
Sao Tome and Principe 15
Saudi Arabia 15 0
Senegal 18 0; 10
Serbia 20 10
Seychelles 15 0
Sierra Leone 15 0
Singapore 8 0
Slovakia 20 10
Slovenia 22 5; 9.5
Solomon Islands 10
Somalia 10
South Africa 15 0
South Korea 10
Spain 21 4; 10
Sri Lanka 8 0
Sudan 18 0
Sweden 25 0; 6; 12
Switzerland 8.1 2.6; 3.8
Chinese Taipei 5 0
Taiwan, China 5
Tajikistan 15 5
Tanzania 18 0
Thailand 7 0; 7
Togo 18 10
Tonga 15
Trinidad and Tobago 12.5 0
Tunisia 19 0; 7; 13
Turkey 18 1; 8
Turkmenistan 15 0
Uganda 18 0
Ukraine 20 0; 7; 14
United Arab Emirates 5 0
United Kingdom 20 0; 5
Uruguay 22 0; 10
Uzbekistan 20 0
Vanuatu 15 0
Venezuela 16 8
Vietnam 10 0; 5
Zambia 16 0
Zimbabwe 14.5 0

The data is updated on 20.02.2024