Why a VAT number check is particularly important in the age of e-invoicing

Digital transformation has revolutionised accounting – particularly through the increasing use of electronic invoices. At the same time, the European Union is pursuing the goal of completely digitising and harmonising VAT processes with its ViDA (VAT in the Digital Age) programme. In this new reality, accurate and up-to-date company data – especially the Value Added Tax identification number (VAT ID) – is not just “nice to have” but a must. Regular VAT ID checks are therefore becoming a fundamental building block for legally compliant, automated and efficient e-invoicing processes – both nationally and internationally.

ViDA and the importance of the VAD ID check

The EU’s ViDA initiative is a comprehensive modernisation programme for the European VAT system. A key component is the introduction of mandatory e-invoicing and real-time reporting of transactions to the tax authorities. From 2030, it will be mandatory in the B2B sector to issue electronic invoices for intra-Community transactions and to report relevant VAT data digitally.

In this new environment, correct VAT numbers are a prerequisite for the legally compliant issuance, exchange and reporting of invoice data. Incorrect or invalid VAT numbers can:

  • lead to the rejection of input tax deductions,
  • lead to delayed payments to business partners,
  • result in fines or tax disadvantages during tax audits.

An automated VAT ID check – ideally when creating or updating a business partner in the system – ensures that the data complies with the requirements of ViDA-compliant systems.

Correct master data as the basis for e-invoices

customer master data

A correct VAT number is essential for proper invoicing in the B2B sector. Incorrect customer data can lead to the following:

  • Invoices may not be accepted or may be rejected by customers.
  • Incorrect or invalid VAT numbers may lead to problems with the recapitulative statement (ZM).
  • Tax risks may arise, for example if the place of supply is incorrectly determined or the tax liability is incorrectly assessed.

These risks can be minimised by integrating regular VAT ID checks into master data maintenance. Data quality is a crucial success factor, particularly in the context of e-invoicing, where all master data is processed and forwarded electronically.

supplier master data

Valid VAT numbers are also essential on the input side. Incorrect data can lead to:

  • input tax cannot be claimed,
  • Invoices have to be manually reworked or even disputed,
  • automated processing procedures are disrupted, which reduces efficiency.

An automated VAT ID check, such as the EPO VAT ID check, can already help when setting up suppliers. This ensures that all invoicing processes run correctly, especially in a ViDA-compliant scenario.

VAT ID check as the key to automated invoice matching

A clean VAT number record is not only relevant for legal certainty, but also a key prerequisite for automated matching in accounting. This involves automatically reconciling incoming invoices with orders and goods receipts.

The correct VAT number plays a particularly important role when invoices are sent via the PEPPOL network, as is the case in the Belgian market. In Belgium, from 2026 onwards, the VAT number (company identification number) will actually be used as the address for electronic invoicing in the PEPPOL system. This means that if the VAT ID provided is incorrect, the invoice will not reach the correct recipient and will not be delivered, which can lead to significant disruptions in the invoicing process and non-compliance with legal requirements.

The correct VAT number is also becoming increasingly important in an international context, as companies use the PEPPOL network to control identification and routing via this identifier. In countries where electronic invoicing is mandatory, such as Belgium, the technical and procedural allocation of invoices is based on the stored VAT number. Errors here lead to delays, rejection of invoices or even sanctions by the tax authorities.

A correct VAT number makes it easier to clearly identify the business partner – especially in complex corporate structures with several affiliated companies. This:

  • reduces the risk of errors because incorrect links are avoided,
  • increases processing speed, as there are no queries,
  • created the basis for so-called shadow processing – i.e. bookings without manual intervention, as all criteria are met.

This is an efficiency gain that should not be underestimated, especially in companies with high document volumes.

Potential for automation in invoice receipt through VAT number checks

In the context of digitalisation and with regard to ViDA, the question arises: How automated can an invoice receipt process actually be? The answer: Very automated! Provided that the master data is correct and the invoices match the orders and goods receipts.

A VAT number check enables:

  • Automated workflows: Invoices with a valid VAT number can be processed immediately, e.g. by automatic approval when the order is received.
  • Real-time validation: If necessary, the VAT ID is checked against national and EU databases to immediately clarify its validity.
  • Reduction in testing effort: Manual tests are replaced by automated, regular tests.
  • Compliance security: Only correct invoices are processed, minimising the risk of incorrect reports or tax disadvantages.

In practice, this means a significant reduction in manual testing effort and thus a significant improvement in quality and efficiency.

Shadow processing with order reference: efficiency through precision

“Shadow processing” is the ideal scenario for an automated invoice receipt process: an e-invoice arrives, is automatically assigned to the correct business partner, matched with the order, checked and posted.

For this to work, the following criteria, among others, must be met:

  • The VAT number is correct and clearly assigned.
  • The supplier number and address match the order.
  • There is a clear order reference that is automatically recognised.
  • The order has already been checked and approved.
  • The quantities and prices on the invoice correspond to the order.

The VAT number check ensures that the supplier assignment is correct. Companies that automate this process at an early stage not only reduce their processing times, but also significantly increase process quality.

Conclusion: VAT ID check as an indispensable tool in the digital age

Electronic invoicing is no longer a vision of the future; it is already a reality in many countries. In Germany, it has been mandatory since 2025. In this new environment, VAT ID checks are becoming an indispensable part of modern, digital accounting.

Companies that invest in clean, automated VAT ID verification processes today will benefit tomorrow from:

  • Higher process quality
  • Faster turnaround times
  • Fewer queries and complaints
  • Better compliance
  • Fully digitised processes

In an increasingly complex regulatory environment, the VAT ID check is more than just a control mechanism; it is a strategic element of any sustainable digitalisation strategy.