VEXP20500 - Basic principles: Use of customer’s EU VAT number

Zero rating may be based on the customer’s VAT registration number in any member state (in a member State (Reg 133F(1)(b)), not necessarily the one to which the goods are being consigned. If the customer’s number is not available the supply must not be zero rated. However, if the supplier charges VAT to an EU customer who subsequently provides a valid VAT registration number in a member state the supplier can issue a credit note for the amount of VAT charged, zero rate the supply and include the transaction on the next EU sales list and Intrastat Supplementary Declaration, where appropriate.

Invalid EU VAT numbers

Paragraphs 4.7 to 4.12 of Notice 725 VAT on movements of goods between Northern Ireland and the EU provide advice on the importance of checking the validity of the customer’s EU VAT number, and the consequences if an invalid number is used. If a business has quoted an invalid VAT registration number for his customer on a sales invoice, zero rating is not to be disallowed if we are satisfied that all reasonable steps have been taken to confirm the validity of the number – the onus is on the business to demonstrate that the checks undertaken were reasonable in the circumstances of the supply. Notice 725 gives some examples of when we will consider that reasonable steps have not been taken. These include

  • if the VAT number quoted does not conform to the published format in the relevant Member State
  • if we have previously informed a business that the number is invalid
  • if the business uses a number that they know does not belong to their customer.

The Commissioners’ condition that the customer must be VAT registered in another Member state was examined by the High Court in JP Commodities Ltd – see VEXP20600 for details. Most member states applied this condition but following an ECJ case the requirement was added to the EU law with effect from 1 January 2020 and is found in Regulation 133F (1)(b).

  • if the VAT number quoted does not conform to the published format in the relevant Member State
  • if we have previously informed a trader that the number is invalid
  • if the trader uses a number that they know does not belong to their customer.

The Commissioners’ condition that the customer must be VAT registered in another Member state was examined by the High Court in JP Commodities Ltd – see VEXP20600 for details. Most member states applied this condition but following an ECJ case the requirement was added to the EU law with effect from 1 January 2020 and is found in Regulation 133F (1)(b).