Everything you need to know about EU VAT in wholesale trading

We realise that the matters related to tax accounting may not be the easiest ones. This is why we leave them to our countable. :-) Especially difficult are all the issues concerning the VAT. For that reason, below we provide a list of questions and answers that should help you solve your problems and answer the fundamental question:

do I have to pay the VAT while buying wholesale? 

Am I going to I receive a VAT invoice?

You can check it very easily. You just need the seller’s VAT Number, which you may find on the company’s website. If it is not there, you can always ask the seller to provide it to you, and there should be no problem with that as it is not personal data.

Once you have got the VAT Number, check the European Commission’s VIES database: http://ec.europa.eu/taxation_customs/vies/?locale=en Choose Member State, then type the VAT Number and click “VERIFY”.

• IF THE SELLER IS A VAT PAYER according to VIES, you will certainly receive a VAT invoice.
• IF THE SELLER IS NOT A VAT PAYER according to VIES, the proof of purchase does not have to be a VAT invoice. 

Am I registered as a VAT payer?

If you are not sure, get your VAT number at hand and repeat the procedure from the Step 1; i.e. check your own VAT Number in the VIES database.

• IF YOU ARE NOT A VAT PAYER according to VIES, then:
  • each seller who is a VAT payer from a state not belonging to the EU must add VAT to the price
  • each seller who is a VAT payer in your country must add VAT to the price 
  • the seller who is not registered as a VAT payer cannot include the VAT in the invoice
• IF YOU ARE A VAT PAYER according to VIES, then:
  • each wholesaler from a state not belonging to the EU will not add VAT to the price, using the 0% rate instead 
  • each wholesaler from your country will add VAT to the price 
  • each seller who is not registered as a VAT payer cannot include the VAT in the invoice

Summarising:

• The EU VAT payers issue 0% VAT rate invoices, thus not paying the tax in transactions. There is one rule: they must be from two different countries belonging to the EU. 
• The non-VAT payers cannot include the VAT in their invoices, as they do not pay it. 
• When you make a purchase, what decides on whether you should receive the VAT invoice or not is the status of the seller’s company, not yours. It does not matter if you are a VAT payer. What matters is whether or not the seller is.