What is VAT Validation?

VAT validation

All European Union member nations impose a value-added tax (VAT) on items sold in the EU. In these countries, businesses are assigned a VAT number, which is similar to the Employer Identification Number (EIN) issued to businesses in the US. VAT validation is the process of verifying that a business has a valid VAT number. It can also be used to confirm whether a VAT number is associated with a particular name and address.

It’s important to note that while more than 160 countries around the world impose a VAT tax and therefore issue VAT numbers, VAT validation typically refers only to countries in the EU.

Frequently asked questions

How can I validate a company’s VAT number?

You can validate a business’s VAT number by querying the VAT Information Exchange System (VIES). To conduct a VAT lookup using VIES, you will need a business’s VAT number and the member state that issued it. You’ll receive one of two results following the search:

Valid: EU VAT information exists
Invalid: EU VAT information does not exist

VIES lookups can be time consuming to conduct manually at scale. Persona offers an automated means of conducting VIES lookups that you can easily incorporate into your onboarding, KYB, and KYC processes.

What’s the difference between a VAT number and a TIN number?

While VAT numbers and TIN numbers can both be used to identify a business, they serve different purposes. VAT numbers are specifically related to a country’s value-added tax scheme, while TIN numbers are tied to a country’s income tax system.

Is there a standard format for a VAT number?

Unfortunately, no. Each country in the European Union is free to determine the format of its VAT numbers; i.e., how many digits those numbers will contain. That being said, all VAT numbers will contain a mix of letters and numbers, and will typically include a country-specific alphabetical prefix (i.e., country code) followed by a set number of numeric digits.