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:

1. for business / invoicing purposes with other businesses inside the EU,
2. inside of Germany, to identify your business as existing in webshops,
3. as "tax number" on your invoice.

The only catch in obtaining a  VAT-ID is that you have to be a VAT registered business. When you register your business as a so-called "small entrepreneur" pursuant to §19 UStG, you are not eligible for this number. The advantage of using the VAT-ID for invoicing purposes is that it never changes, in contrast to your domestic tax number. When you relocate your business into the jurisdiction of another tax office, the tax number always changes – the VAT-ID remains the same. When you invoice other European businesses using their VAT-ID, then you are to apply the "reverse charge system" and your invoice is cheaper.