I am registered in the EU and have a TAX ID number for my company. Why is there tax on my invoice?

You are reading this article because we have sent you an invoice and have added 21% Spanish VAT (value added tax) but you have a EU VAT number and feel that you should not be paying VAT on inter community transactions.

Having an EU TAX ID DOES NOT automatically entitle your company to be tax exempt when performing EU cross-border transactions. Your company MUST ALSO BE registered with the local and/or national tax agency in your country to perform EU cross-border transactions.

When we take on a client, we will verify their EU Tax ID "status" against the VIES (VAT Information Exchange System) system which is the search engine owned by the European Commision.

Here is the link to their checker and additional information: https://europa.eu/youreurope/business/taxation/vat/check-vat-number-vies/index_en.htm 

If we are not able to verify that your TAX ID is registered for EU cross-border transactions, then we are obligated to add the Spanish VAT at 21% after which you are able to recoup in your home country.

In the first screenshot below you can see that the client submitted their VAT number to us, but according to VIES, their VAT number is not eligible for  
EU cross-border transactions and requires them to be registered with their local/national tax authority. In this case we are obligated to apply Spanish VAT at 21% on any of their invoices and they would need to recoup that Tax in their country of registration.

failed vies lookup

Below is a screenshot of our own company and as you can see its valid for EU cross-border transactions and any invoices sent to us from a country within the EU should be without VAT.

jucra views lookup results

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