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What is a VAT ID (Tax Number) and why is It important?

Customers can provide their tax numbers during checkout

Updated over 4 months ago

A VAT ID (also called a Tax Number) is a unique number given to businesses that are registered for VAT (Value Added Tax).

When do customers use their VAT ID?

  • When they want to buy without VAT (tax-free purchase) under certain conditions.

  • Mostly used for business-to-business (B2B) transactions inside the EU or other specific regions.

How does it work?

  • Customers enter their VAT ID during checkout.

  • If the VAT ID is valid, the invoice will not include VAT (zero-rated VAT).

  • This makes the purchase cheaper for the customer.

Important:
Always verify the customer's VAT ID if you plan to issue a tax-free invoice. Incorrect VAT handling can cause tax problems later.

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