Is EU VAT Number Transferable? Analysis on Compliance and Legal Risks

Can an EU VAT Number Be Used by Others? A Discussion on Compliance and Legal Risks

In the European market, Value Added Tax VAT is an essential part of business operations. Each EU member state issues a unique VAT number to eligible enterprises, which not only serves as an identifier for the enterprise but also plays a crucial role in tax reporting and transactions. However, in commercial practice, can one company’s VAT number be used by other enterprises or individuals? This question involves complex compliance requirements and potential legal risks.

According to EU VAT regulations, a VAT number is essentially an exclusive identifier for a specific enterprise. It represents the enterprise's tax obligations and its legitimate business identity in a particular country. In principle, a VAT number cannot be transferred to a third party. For instance, an EU Commission guidance document in 2025 clearly stated that companies can only use their own VAT numbers within their own business scope and must not sell or gift them to other entities. This is not only to ensure the transparency of the tax system but also to prevent potential fraudulent activities.

Despite this, such restrictions are not always fully enforceable in practical operations. Some enterprises may choose to lend their VAT numbers to others for various reasons, such as reducing tax costs or evading regulation. Although this may bring short-term convenience, it carries long-term risks. For example, in a case in Germany in 2025, a company was fined heavily after being found guilty of participating in tax evasion due to allowing another company to use its VAT number for transactions. This shows that even in cases of business cooperation, legal requirements must not be overlooked.

Using someone else's VAT number can also lead to a series of legal consequences. First, it may increase the frequency of audits by tax authorities. Once abnormal transactions are discovered, tax departments have the right to request detailed account records from enterprises and verify the authenticity of all transactions. If violations are found, enterprises will not only need to pay back taxes but may also face hefty fines. Second, the misuse of VAT numbers can also affect a company's credit rating, thereby damaging its future financing capabilities and market reputation.

From another perspective, the EU's support policies for cross-border trade provide certain flexibility on this issue. For example, through the establishment of the One-Stop Shop OSS, enterprises can complete VAT declarations for multiple countries on a single platform. This mechanism greatly simplifies the process of cross-border transactions but requires enterprises to strictly follow the rules and use their own VAT numbers. Any attempt to bypass these rules may be considered non-compliant behavior.

It is worth noting that with the rapid development of e-commerce, more small enterprises and individual sellers are entering the EU market. Against this backdrop, how to correctly use VAT numbers has become a pressing issue. For example, platforms like Amazon usually require sellers to provide valid VAT numbers so that they can withhold and remit corresponding taxes on behalf of the sellers. However, some sellers may misapply others' numbers due to a lack of understanding of the rules, thus getting into legal disputes.

In summary, although the use of EU VAT numbers seems simple, it actually involves many complex factors. Whether for enterprises or individuals, caution should be exercised when handling such matters to ensure all operations comply with local laws and regulations. Only in this way can potential legal risks be minimized, and legitimate rights protected. At the same time, strengthening communication and collaboration within the industry and jointly maintaining a healthy business environment is also the responsibility of every participant.