Applying for Your Company's VAT-ID
Many have heard about this number, but do you really know what it's about? There are three main practical reasons for needing a VAT ID. They are:
- for business/invoicing purposes with other businesses inside the EU,
- inside of Germany, to identify your business as existing in online sales platforms,
- as an alternative "tax number" on your invoice.
The only catch in obtaining a VAT ID is that your sales or services are subject to VAT. The advantage of using the VAT-ID for invoicing is that it never changes, unlike your domestic tax number. When you relocate your business into the jurisdiction of another tax office, the tax number constantly changes – the VAT-ID remains the same. When you invoice other European businesses using their VAT ID, you must apply the "reverse charge system," and your invoice is cheaper.