VAT Number

VAT Number

Looking to grow your business and take it global with international shipping? You might need to think about getting a VAT number or VAT ID.

Sure, the idea might seem daunting, but the ins-and-outs of value-added tax aren’t as complex as they first appear. However, it’s true that getting a solid understanding of VAT registration numbers can be a challenge.

The web is saturated with countless articles, each offering fragments of the information you’re after. But in this piece, we’ve gathered the crucial knowledge you need about VAT numbers and their impact on your business – all in one convenient place.

What is VAT Number?

VAT, an acronym for value-added tax, is represented by a unique VAT number, VAT registration, or VAT ID. This is a number given by the government to track your business’ taxes in certain countries. It’s widespread, being used in the EU, India, Japan, and 113 more countries.

Important to note, a VAT number isn’t identical to your tax ID. It’s exclusively for the value-added tax system. This system applies to a majority of services and goods, based on a percentage of the total cost of the item. This could range from 0% to 27%, depending on the cost to produce, distribute, or sell the product.

VAT shares similarities with the Goods and Services Taxes (GST) that countries such as Singapore and Australia employ. However, there’s a key difference: while VAT is a percentage of value-added, GST is a flat-rate percentage that remains constant.

What is the Importance of VAT Numbers?

The importance of a VAT number can’t be understated. Here’s why:

  • It helps determine the tax status of the customer
  • It pinpoints the location of taxation
  • It’s included on invoices for easy tracking
  • It ensures that the holder pays taxes accurately as determined by the proper authority

For any business looking to reach other countries and expand, a VAT number is crucial. It can open the door to potentially boosting your sales. Besides the reasons mentioned above, getting a VAT ID for your business could be the key to shifting from limited sales to significant growth.

Advantages of a VAT Number for Your Business

Securing VAT registration offers substantial advantages for businesses, such as expanding your product shipping reach and boosting profits. If you’re running a business in a VAT-implementing country, you have the right to claim tax refunds, even those from past transactions. Even if your business isn’t VAT-registered, you’re still eligible to recover taxes, but only on the products and services procured for your business activities.

Who Grants a VAT Number?

The issuance of a VAT number is governed by specific policies and systems in each country, meaning the country you’re aiming to sell in will provide your business’s VAT registration. If you’ve already been conducting sales in other countries without a VAT registration, it’s crucial to register straight away to prevent potential penalties. Luckily, the procedure is quite uniform across countries and is reasonably straightforward.

How to Secure a VAT Number

If you’re based outside of VAT-system countries, the process to apply for a VAT number typically involves the following steps:

  1. Select the country you want to sell to and register via its VAT MOSS
  2. Provide your bank account and business details
  3. Input your contact information
  4. Respond to queries about your VAT history
  5. Review the information
  6. Finalize the process

Decoding a VAT Number

Understanding a VAT number isn’t as daunting as it seems. A VAT number can range from 4 to 15 digits. It generally starts with a two-digit country code, which can be numeric or alphabetic (like DE for Germany or IN for India). Following the country code, there will be an additional 2 to 13 digits. You can check out different formats here.

When is a VAT Number Unnecessary?

If your business involves exclusively selling B2B digital products, there’s no need to apply for a VAT number. In B2B sales, you can use the VAT number of the company you’re selling to in order to reclaim VAT via the reverse-charge mechanism.


Weighing the Pros and Cons of a Business VAT Number

Here are some advantages and disadvantages of having a business VAT number for international shipping with Super International Shipping


  • Enables international sales
  • Makes you eligible to reclaim some of the VAT
  • Excellent for marketing
  • Opens up opportunities to collaborate with larger companies


  • Some of your customers may not be VAT registered
  • Requires meticulous tracking of all sales

The benefits of VAT registration clearly outweigh the drawbacks. It could be the game-changer that propels you past your previous sales record and elevates your business performance. Now that you’re armed with all the necessary information to apply for a VAT number, you’re all set to take your business to the next level.


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