VIES system for checking contractors from the EU

Website

An entrepreneur starting cooperation with companies based in the European Union is first of all obliged to check the obtained contractor's identification number through the VIES system. In this article, we will answer the questions about what the VIES system is and why it is worth verifying contractors in it before issuing an invoice for them.

What is the VIES system used for?

The VIES system is a search engine that allows you to obtain information whether the verified entity is registered as performing intra-Community transactions. VIES (or VAT Information and Exchange System) belongs to the European Commission and is available in 23 languages. The data obtained from this system come from the national databases of the members of the European Union.

How does the VIES search engine work?

The VIES search engine, available in Polish at: http://ec.europa.eu/taxation_customs/vies/?locale=pl, is very easy to use. Requires the input of data on the verified entity:

  • selecting from the list of the Member State from which the given contractor comes,

  • enter his VAT number (known in Poland as VAT-EU).

Companies from outside the European Union that have been registered for the purposes of settlements in its territory and thus have a tax identification number with the EU prefix, are not included in the VIES system. The additional part concerns the completion of the same information about the company that verifies the contractor. However, they are not mandatory, without completing this part, the search engine will also show the result.

Search results from the VIES system

The following search results can be obtained from VIES:

  • yes, VAT number active (you can also check the contractor's link to the address in a given country, if it returns such information),

  • invalid VAT number for cross-border transactions within the EU.

A negative answer means that the entity is currently not reported as an active VAT-EU taxpayer. This information may mean that the entity:

  • has never been registered for VAT-EU,

  • is in the process of registration,

  • has been removed from the EU taxpayers' database, e.g. by its own resignation or too long a period of non-execution of intra-Community transactions.

Removal from the list of VAT-EU taxpayers

In the VIES database, you can also preventively check your own company, especially if no intra-Community transactions were made for a long time and thus no VAT-EU summary information was submitted.

If, after searching in VIES, it turns out that our company has not been positively verified, it is worth confirming this information with your own tax office in the first place. If the entrepreneur is removed from the list of active VAT-EU taxpayers, it will be necessary to re-register to VAT-EU.

Registration for VAT-EU in Poland

An entrepreneur who intends to make intra-community transactions is required to register for VAT-EU. To do this, complete the VAT-R form in part C.3 and it is necessary to indicate the reason for registration:

  • an entrepreneur who is an active VAT payer will perform intra-Community transactions,

  • an entrepreneur who is not subject to the obligation to register as an active VAT taxpayer will perform intra-Community acquisition of goods,

  • an entrepreneur not subject to registration as an active VAT taxpayer will perform intra-Community supplies of services or import services to which art. 100 of the VAT Act (as a rule, transactions for and from taxpayers from other EU countries).

It is also necessary to indicate the expected date of commencement of intra-Community transactions. Beneficiaries of the VAT exemption purchasing goods from companies from other EU countries may benefit from the exemption from VAT-EU registration and thus submission of VAT-8 declarations, as long as the value of purchases does not exceed the limit of PLN 50,000. More on this subject in the article: Nievatowiec and the purchase of goods in the EU.

VIES system - incorrect information

When verifying your data, it may turn out that it is incorrect or no longer valid (e.g. address). As databases with EU VAT numbers are kept by national tax administrations, no notifications of irregularities are made to the European Commission. The application should be made to your own tax office, which is responsible for updating the data to the database of Polish VAT-EU taxpayers.

Why is it worth checking a contractor in VIES?

In the case of an intra-Community supply of goods, the contractor should be verified in the VIES database to see if he actually exists as an entity registered for VAT-EU. This is necessary due to the right to apply the 0% VAT rate.

The reduced VAT rate can be applied under several conditions, such as confirmation of the exportation of goods to another EU country, as well as confirmation that the buyer is a value added tax payer, identified for the purposes of intra-Community transactions in the territory of a Member State other than the territory of the country (it must have a number EU VAT from outside Poland).

Failure to meet the above conditions will result in the need to tax sales with the domestic VAT rate.

Start a free 30-day trial period with no strings attached!

Integration of the wFirma.pl system with VIES

It is worth noting that when issuing sales invoices in the wFirma.pl system as part of a WDT transaction or intra-Community provision of services, the buyer is automatically checked in the VIES system.

In order to issue an intra-Community invoice, go to the tab REVENUE »SALE» EXHIBITION »INVOICE. When issuing the invoice, it is necessary to complete, inter alia, data of the buyer with a VAT-EU identifier and select the VAT rate "0% intra-Community supply" or "not incl. EU ”(for the intra-community supply of services). When saving the invoice, the wFirma.pl system will automatically connect to the VIES database, if a given contractor is not registered for VAT-UE, it will display the following message: "The given number is not an active VAT number in the European Commission's VIES system".