Checking a VAT number: why and how to make it standard practice for your SMB

A VAT number check takes less than a minute but catches a large share of invoice fraud and fake suppliers. Here's how to build the check smartly into your administration.

You get an email from a supplier. New logo, different email address, and a request to start paying to a different bank account. Does that add up? Before you forward anything to the bookkeeper, you want to know who you're actually dealing with. One of the quickest ways to find out: the VAT number.

In this post we show you what you can verify in five minutes before adding a new business contact to your system — or changing an existing one.

Why a VAT check is more than a formality

A VAT number is the official registration number with the tax authority. When someone sends you an invoice with a VAT number on it, you can verify that number in the public European database VIES. You'll see:

• whether the number exists and is active;
• which company name is linked to it;
• which registered address the tax authority has on file.

Sounds dull. It isn't. Because this is exactly where invoice fraudsters and fake suppliers trip up: they can set up a fake email address and design a convincing PDF letterhead, but they can't invent a real VAT number that also matches the right company name.

Four situations where you'll really want to run the check

1. New supplier or subcontractor

Before you pay the first invoice: check the VAT number against the company name on the invoice. Don't match? Call them using a phone number you look up yourself — not one from the email.

2. Change of bank account number or address

Received a message that an existing supplier now wants to be paid "to a different IBAN"? Alongside the IBAN check, run a VAT check on the company name. If the VAT number now shows a different address, or is no longer active, you have your answer.

3. New customer with a large order

Especially with B2B sales on invoice terms: verify that the customer is who they claim to be. A non-existent VAT number on the order confirmation is a major red flag.

4. Intra-community supplies (0% rate)

Supplying goods or services to a business in another EU country and applying 0% VAT? You are required to verify your customer's VAT number and retain a record of when you checked it. If the tax authority comes knocking later and the number was already invalid at the time, you could end up having to pay the VAT yourself.

How to go about it in practice

You don't need a subscription or special software. The EU provides a free, public system (VIES). All you need to do is select the country and enter the number. We've built a simple, clean interface around it so you don't have to navigate an EU form in a foreign language: the VAT check.

What you enter:

• the country (NL, BE, DE, etc.);
• the VAT number, without spaces or dots.

What you get back:

• valid or invalid;
• if valid: the registered name and address.

Compare that name with what appears on the invoice or in the email. Significant discrepancy? Don't pay — call first.

A few caveats worth knowing

Some things to keep in mind so you're not caught off guard:

• Sole traders in some countries may have two numbers. Since 2020, Dutch sole traders have a VAT identification number (for use on invoices) and an internal VAT number (for filing returns). The invoice should show the ID, and that's the one you can check.
• Not every business has a VAT number. Small business schemes, certain healthcare providers, hobby income: these don't appear in VIES. That doesn't automatically mean something is wrong, but it does mean you'll need to verify by other means — a Chamber of Commerce number, for example.
• The database isn't perfectly real-time. A number issued yesterday may not appear for a few days. If in doubt, call the party or ask for proof of registration.
• Keep a record of the check. For intra-community supplies you'll want to be able to demonstrate that you checked. A screenshot with a date, or an export from your own system, will do.

Combine with other checks

A VAT check is one piece of the puzzle. For a new supplier or a change to existing details, combine it with:

• an IBAN check — is the format correct and does the bank code match the stated bank?
• a look at the Chamber of Commerce register — does the legal entity exist, who are the directors, since when?
• a quick callback using a number you find yourself on the official website;
• for emails: check who actually sent it (the sender domain, not the display name).

Three or four minutes of work. Enough to catch 90% of standard invoice fraud and dodgy "new suppliers" before any money leaves your account.

Build it into your process

The best time to run a VAT check isn't "when something feels off" — it's always, at two fixed points in your administration:

1. when creating a new creditor or debtor;
2. whenever a name, address, or bank account number changes.

Write that down in a brief work instruction for whoever processes the invoices. Two bullet points, one link. Done.

Want to try it right now on a supplier you're unsure about? Head to our VAT check and enter the number. No registration, no cookie banners to click away. Just an answer before your coffee goes cold.