A VAT number is a unique tax identification code that businesses use to collect, report, and reclaim value-added tax (VAT) on goods and services. If you sell to clients in the EU, you will almost certainly need one. It tells tax authorities who you are and connects every invoice you issue to your business.

What is a VAT number?

VAT (value-added tax) is a consumption tax added to most goods and services in Europe and many other regions. When you are registered for VAT, you charge it on your sales, pay it on your purchases, and report the difference to the tax authority on a regular schedule.

Your VAT number appears on every invoice you send. Clients and partners use it to verify that you are a registered business. In the Netherlands, it is called a BTW-nummer. In Germany, USt-IdNr. The format varies by country, but the purpose is the same.

When do you need a VAT number?

Requirements depend on your country and turnover. In many EU countries, you must register once your annual revenue crosses a set threshold. Some businesses register voluntarily before reaching it, especially if they want to reclaim VAT on business purchases.

If you are a ZZP'er, freelancer, or small company owner, your accountant can confirm whether registration is mandatory for your situation. Once registered, include your VAT number on all invoices and keep records for every transaction where VAT applies.

Managing VAT with bunq

Calculating and setting aside VAT manually is tedious and easy to get wrong. AutoVAT, part of bunq's Tax Automation tools, automatically reserves the correct VAT amount whenever you receive a payment in your Business Account. When it is time to pay the tax authority, the money is already there.

Pair AutoVAT with organized bookkeeping and you spend less time on admin and more time on the work that actually earns you money.

Common questions

Is a VAT number the same as a tax ID?

Not always. A VAT number specifically relates to value-added tax on sales. Your general tax identification number (used for income tax) may be separate. In some countries, one number serves both purposes.

Do I charge VAT to clients in other EU countries?

Cross-border VAT rules depend on where your client is located and whether they are a business or consumer. Reverse-charge mechanisms often apply for B2B services within the EU. Consult your accountant for cross-border situations.