What ‘reverse charge’ means (context)
Under reverse charge, the customer accounts for VAT instead of the supplier charging it. In cross‑border B2B scenarios, VAT ID validation is commonly part of establishing that the customer is a taxable person registered for VAT.
Why VAT ID validation is used
- Supports determination of VAT treatment for B2B cross‑border supplies/services.
- Reduces risk of applying reverse charge to non‑registered customers.
- Provides an auditable evidence trail linked to the transaction.
Invoice data points commonly used
- Supplier VAT ID and customer VAT ID (with prefixes).
- Reference to reverse charge (wording depends on the transaction type and jurisdiction).
- Customer legal name and address as used for the transaction.
Operational checklist
- Validate VAT ID at onboarding and near invoicing (or at least at invoicing).
- Store validation evidence (timestamp, result, reference ID).
- Keep shipping/service performance evidence alongside VAT evidence.
Related pages
VAT verification overview | VAT formats by country | When to use VAT vs EORI vs LEI
