EU VAT legislation 2020 implications for Vat Calculation Service

According to the new EU VAT legislation, local VAT registration numbers cannot be used for the tax exemption of intra-community B2B supplies of goods from January 1, 2020.

What does this mean for sellers?

With the new legislation, Amazon’s VAT Calculation Service will only use VAT registration numbers validated or listed in the VAT Information Exchange System (VIES) of the EU commission for VAT calculations and invoicing. Sellers therefore need to validate and get their local VAT registration numbers listed in VIES by December 31, 2019, in order to continue benefiting from Amazon's VAT Calculation Service on their account.

What will happen if sellers do not validate local VAT registration numbers in VIES?

Amazon’s VAT Calculation Service will not be able to use local VAT registration numbers for VAT calculations and invoicing, and sellers remain responsible for the creation and provision of VAT invoices for shipments from countries where they have local VAT registration numbers.

If sellers have already validated and listed their VAT registration numbers in VIES, no further action is required and Amazon will automatically update their VAT registration number status.

How do sellers validate and list local VAT registration numbers in VIES?

To validate local VAT registration numbers and list them in VIES, do the following:

For Spain:

1. Complete the registration form 036 for the changes in VAT number registration (complete entry 130 on page 1, and entries 582 and 584 on page 5) on the online portal of the Spanish tax authorities.
2. Submit the completed form 036 along with the identification details and capacity of the person electronically signing the form.
3. Once the Spanish tax authorities have started processing the request, they will request the documents that accredit sellers’ activities with other European countries.
4. Provide the documents describing the taxable activities and proof of the intra-community transactions (for example, copies of invoices and customer orders).

For Italy:

• Submit a request to activate VIES validation of the local VAT registration number online using Fisconline/Entratel.

  Activation is immediate and automatic upon approval by the Italian tax authorities.

Further help and advice?

We recommend that sellers consult with their local tax advisor to better understand the potential consequences of this change in legislation for their business.

Sellers should validate and get their local VAT registration numbers listed in VIES as soon as possible.

Frequently asked questions

What is the VIES system?

VIES provides a tool to validate EU VAT registration numbers. However, VIES is also an internal information exchange system for the EU tax authorities. Information collected by tax authorities in the European Sales List (revenue generated per EU VAT registration number) of the seller is shared with the tax authorities of the customer’s country. These tax authorities can then verify if the customer correctly reported the acquisition of these goods in their VAT returns. In this respect, VIES is a tool for EU tax authorities in their fight against cross border VAT fraud.

What is the difference between an EU VAT registration number and a local VAT number?

EU VAT registration number: VAT registration number that is validated and listed in VIES. The EU VAT registration number is preceded by a country prefix (for example, IT for Italy, ES for Spain) from the country that granted the number.

Local VAT registration number: A local VAT registration number does not have a country prefix and is in principle only meant to be used for domestic transactions within the country that granted the number (for example, purchases from a domestic supplier).

How do I determine if my VAT registration number is local or VIES validated?

Sellers can verify the validity of their VAT number on VIES by doing the following:

1. Visit the VIES website.
2. Select the Member State from the drop-down menu.
3. Enter the VAT number.

Message if the VAT number is valid in VIES:

Message if the VAT number is not valid in VIES:

Where can I find more information?

• VIES frequently asked questions: http://ec.europa.eu/taxation_customs/vies/faq.html?locale=en
• EU VAT legislation: Council Directive (EU) 2018/1910 of 4 December 2018 amending Directive 2006/112/EC
• Italy tax portal: https://www.agenziaentrate.gov.it/portale/contatta
• Spain tax portal: https://www.agenciatributaria.gob.es/AEAT.sede/tramitacion/ZZ09.shtml