The following abbreviations are used in this article: VAT (Value Added Tax), VAT Information Exchange System (VIES), and VAT Identification Number (VIN).
The VAT Information Exchange System (VIES) was established to respond to the new conditions for trade in goods and services that arose following the introduction of the European Community’s single market in 1993, with the abolition of border customs controls on trade in goods and the introduction of the principle that supplies are subject to value added tax in the place where the recipient is established or registered.
Each Member State of the European Union develops, maintains and updates its own VIES information system, which is linked to the VIES systems of the other Member States.
The VIES system facilitates the electronic exchange of two types of data:
- data on declared supplies of goods and services carried out between taxable persons established or registered for VAT purposes in a Member State of the European Union. The source of this data is the information contained in the VIES returns submitted by traders. With effect from 1 January 2020, the scope of the data in the system has been expanded to include information on declared transactions under the special regime for the storage of goods on call;
- VAT identification numbers issued by EU Member States and the associated additional details regarding the name and address of the person.
Under the VAT system currently in place in the European Union, supplies between counterparties from different EU Member States are referred to as intra-Community supplies. In such cases, in the country where the supplier is established, the supply is subject to a zero rate when the recipient is established in another Member State, is registered for VAT purposes and has a valid VAT number.
The recipient is obliged to account for VAT upon receipt of the goods or services. This creates a need for taxable persons carrying out intra-Community supplies to be able to check, quickly and conveniently, whether their customer, the recipient of the supply, is a taxable person in another – and whether they have a valid VAT number.
Checks on the validity of VAT identification numbers
The VIES system guarantees the right of taxable persons carrying out intra-Community supplies of goods or services to receive electronic confirmation of the validity of their counterparties’ VAT identification numbers, as well as confirmation of their names and addresses.
Check for VAT registration in the EU’s VIES system
The online tool designed to ensure that traders can exercise this right is the European Commission’s website for verifying the validity of VAT identification numbers.
It is important to note that VIES does not maintain its own database of all VAT identification numbers issued within the EU. During validation, the registration details are provided in real time by the VIES system of the Member State that issued the relevant VAT number.
The Commission’s website also enables traders to obtain a unique identification code in order to certify to the national tax authority that they have validated a specific VAT identification number. The condition for obtaining a unique code is that the trader must enter their own VAT number at the time of validation.
Information required for the audit activities of tax authorities
Every taxable person must submit details of supplies of goods and services made to taxable persons established or registered for VAT purposes in another Member State of the European Union. This is done via a VIES return.
In Bulgaria, the VIES return is submitted together with the VAT return by the 14th day (inclusive) of the month following the tax period to which it relates. A VIES return must be submitted by persons registered under the Value Added Tax Act who, during the relevant tax period, have carried out:
- intra-Community supplies;
- supplies as an intermediary in a triangular transaction;
- supplies of services where the recipient is a taxable person established in another Member State.
The VIES return is used to declare details of the recipient’s VAT number and name, the type of supply and the taxable amount.
In the various countries of the European Union, tax periods may be monthly, quarterly, half-yearly or annual. There is also a significant difference in the deadline for submitting tax returns after the end of the tax period – ranging from 10 days to 2 months.
The data on taxable persons collected from VIES returns is processed and analysed by the tax authorities. The aim is to establish:
- whether taxable persons within a single administration have correctly classified certain supplies to persons in other Member States as subject to a zero rate;
- whether taxable persons within a single administration have correctly charged VAT on supplies from persons in other Member States that have been declared to them as recipients.
