A VAT ID (also tax number) is a unique number for businesses registered for VAT.
When do customers use their VAT ID?
To buy without VAT under certain conditions.
Mostly in B2B sales inside the EU or similar regions.
How does it work?
The customer enters the VAT ID at checkout.
If it's valid, the invoice has no VAT (zero-rated).
So the purchase is cheaper for the customer.
Important:
Always check the customer's VAT ID before a tax-free invoice. Wrong VAT handling can cause tax problems later.