VAT - Taxpayer Status and VAT on Services

VAT - Taxpayer Status and VAT on Services 

Starting in 2010, European Union companies in most cases no longer have to charge VAT on most services sold to North American business customers. There are exceptions.

The condition sometimes for not charging VAT is that the North American customer is a legal entity that qualifies as a business, and that the services provided will be used for the business.

European Union companies will continue to charge VAT on most services when sold to private persons, or to a business that will not use the services for their business. VAT will generally also continue to be charged on several services sold to North American businesses, such as lodging, car rental, tradeshows and some conference services.

In order for a European Union company to show to their local VAT authorities that they have sold to a business entity in North America, they sometimes will ask the North American customer to confirm that they have the "official taxpayer status of a business" and that they will use the services purchased for their business. European Union companies will sometimes request that a North American customer provide "valid proof of tax payer status" which is a specific certificate issued by the IRS.

If you receive such a request from a vendor in the European Union, contact Euro VAT Refund, Inc. for clarification and assistance with how to respond.