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VAT no.-History, verification and other basics

Date : Sep 26, 2017 Category : Business / Financial Services
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VAT no.-History, verification and other basics
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A VAT no. is used to identify every company that is running a business in the region where EU has a taxing authority. A VAT number is a number which is unique for each business which has a seat in the territory governed by the European Union.


The importance of VAT numbers lies in tax and excise matters. Each VAT number is associated with particular financial institutions and each number differs in length and how it is constituted depending upon the nationality so that VAT numbers from  different countries can be differentiated between.


Before you furnish the VAT no. in your details concerning a particular transaction you should make sure that the number relates to the business you are operating and from which you are selling or buying. Also make sure that the VAT number and other information provided is true, accurate and current and any changes in the same will be notified by you as soon as possible. Certain business agreements require that the information provided by you including the VAT number should be processed and saved. Make sure you are okay with that before providing the information.


Now let us talk about how to verify a VAT no. When the value in the country or region code is of a EU country or region and you are trying to modify the field for VAT number then your new VAT number and user ID will be seen in the VAT log window. Then you can verify the VAT number by going for the VAT button in the window that says VAT log. Each time one uses a verification function a new line is created. The status field says valid when the number is verified and if not then the status field says invalid.


How a VAT number helps is because a business can maintain records of imports and exports in areas where EU VAT is applicable and it also helps a company calculate how much VAT becomes payable when doing business. The other benefits of a VAT number are that it permits companies to engage in business throughout EU. Also, if a buyer and seller apply tax to a transaction but no tax was due then the VAT number helps to figure out the entity on which refund would become due.


I would like to conclude by giving a background into how VAT number came to be. The first time VAT numbers were used was in 1967 because of coming into effect of the first EU directives related to VAT. In 1993 major changes were introduced in the way that the tax system functioned. It was then that the EU thought of a new system of levying and collection of taxes which set the ball rolling for a transitional VAT system which  would then brought in a new system that is in consonance with all member nations. The current system allows one to look up a particular company when the name and VAT number of the company is known

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