Knowledgebase

Home > Item #170

How do I avoid charging VAT to EU businesses?

Item: #170
Date: 3 Apr 2002
Applies to
v3
v4
v5

Question

Is it also possible for us to not charge VAT (tax) to VAT registered EU companies? VAT law requires we charge it to all UK orders and EU orders *unless* they provide a valid EU VAT number?

Answer

We have looked at automating this process, the problem with European orders has been that the EU and Customs & Excise departments around the EU provide no online or automated way to check the validity of VAT numbers. We've found about 50% of the EU VAT numbers we're supplied with get refused first time on the EC Sales List report. Generally, the problem is characters missing from the beginning or end that the companies tend not to use in their own country. Consequently we check all EU VAT numbers with C & E by phone before accepting the order.

The EU VAT system is invented by politicians and not business people and succeeds in making it easier for us to sell CactuShop to a US customer than to a European one. The EU claims that an online database lookup system would breach EU privacy law, while in the same breath stating that company headed paper should include your EU VAT number. It kind of outlines the point that the whole system is not nearly as well thought out as it should be.

Can't find the answer you need? Click here to open a support ticket.

« Back