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Need help verifying validity of Hungarian VAT number (URGENT!)
Thread poster: Maciek Drobka

Maciek Drobka  Identity Verified
Poland
Local time: 13:24
Member (2006)
English to Polish
+ ...
Feb 8, 2008

Hi all,

A prospective client from Hungary called me yesterday, asking for a quote.

In the process, I asked him to provide a VAT ID number. He provided xxxxxxxx-1-43. ('xxxxxxxx' are masks here, there were actual digits there.)

As a standard procedure with European prospectives, I looked up the whole number here: http://ec.europa.eu/taxation_customs/vies/vieshome.do?selectedLanguage=EN

The site said the number was invalid. Then, in the FAQ section, I read a Hungarian VAT no. can only contain 8 digits. So I tried verifying the 'xxxxxxxx' bit. No good, also invalid.

Oh, and the client says:

----------
This number is our Representative Office local taxation number. The “-1-“ in it means we are not obliged to pay or claim VAT , because we do not have such an commercial or other activity.

The full number is the taxation ID for the tax authority’s purposes.
----------

Now, this is a bit smelly to me.

With the above in mind, do you think I should be wary, or do you think I can go ahead and start the job?

All input will be appreciated.

Maciek


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Binnur Tuncel van Pomeren  Identity Verified
Germany
Local time: 13:24
Member (2007)
English to Turkish
+ ...
VAT-liable or not? Feb 8, 2008

Dear Maciek,

Maciek Drobka wrote:


----------
This number is our Representative Office local taxation number. The “-1-“ in it means we are not obliged to pay or claim VAT ,
The full number is the taxation ID for the tax authority’s purposes.
----------

Now, this is a bit smelly to me.



Difficult to answer. Yet, two comments come up my mind:

- Is your client employed (is s/he wage-labourer)?
then s/he is not VAT liable.
- Does this person run her/his business (which s/he claims not: which puts him as non-VAT-liable), there may be a minimum limit for being exempted from paying VAT (this is the case in Germany)?

Best wishes and good luck,

Binnur

[Edited at 2008-02-08 10:49]


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Maciek Drobka  Identity Verified
Poland
Local time: 13:24
Member (2006)
English to Polish
+ ...
TOPIC STARTER
To clarify... Feb 8, 2008

Binnur Tuncel van Pomeren wrote:

Difficult to answer. Yet, two comments come up my mind:

- Is your client employed (is s/he wage-labourer)?
then s/he is not VAT liable.
- Does this person run her/his business (which s/he claims not: which puts him as non-VAT-liable), there may be a minimum limit for being exempted from paying VAT (this is the case in Germany)?

Best wishes and good luck,



Should've said that in my original posting.

The client is a business entity (company), not a natural person.

M


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Yvonne Gerstheimer  Identity Verified
Germany
Local time: 13:24
Japanese to German
+ ...
Hi Maciek Feb 8, 2008

My tax accountant gave me a list for European VAT number standards just last week. A Hungarian VAT ID should start with 2 letters: HU, followed by 8 digits.

But it could be another tax number. In Germany there are two different kinds of tax numbers, a national one (mostly containing 10 numers) and an international VAT number, starting with DE followed by 8 digits. Maybe it is the same for Hungary?

My tax accountant also told me that it is unbelievable how many people do not know what a VAT ID number is and provide the most curious numbers, e.g. their phone numbers, region codes etc.

Just call them and tell them that a VAT ID should start with HU followed by 8 digits. Maybe they are not aware that it is NOT their VAT ID they gave you.

Yvonne


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Adam Podstawczynski  Identity Verified
Local time: 13:24
Polish to English
+ ...
not necessarily invalid Feb 8, 2008

Hi,

Being deemed by the EU VAT validation site as "invalid" does not mean the company is not a valid VAT entity. It only means they have not registered/applied for EU VAT number, which not all companies do. This number may be valid and sound for Hungarian taxation purposes; it is simply not a valid EU number. They may not even need an EU VAT number in the first place if they do not export services to EU (at least this is how my tax office interprets the idea).

Hope this helps,

Adam Podstawczyński

[Edited at 2008-02-08 12:22]


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Attila Piróth  Identity Verified
France
Local time: 13:24
Member
English to Hungarian
+ ...
Their reasoning is correct Feb 8, 2008

Adam Podstawczynski wrote:

Being deemed by the EU VAT validation site as "invalid" does not mean the company is not a valid VAT entity. It only means they have not registered/applied for EU VAT number, which not all companies do. This number may be valid and sound for Hungarian taxation purposes; it is simply not a valid EU number. They may not even need an EU VAT number in the first place if they do not export services to EU (at least this is how my tax office interprets the idea).



Yes, something along these lines. But this situation may arise even for companies that export services to the EU. I have just checked with a small company in the translation business with a similar tax number, and http://ec.europa.eu/taxation_customs/vies/vieshome.do?selec tedLanguage=EN said the number was invalid - while it is certainly not.
The format "xxxxxxxx-1-43" is OK. Their explanation, This number is our Representative Office local taxation number. The “-1-“ in it means we are not obliged to pay or claim VAT , because we do not have such an commercial or other activity. is correct.
HTH
Attila


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Maciek Drobka  Identity Verified
Poland
Local time: 13:24
Member (2006)
English to Polish
+ ...
TOPIC STARTER
Thank you... Feb 8, 2008

Thank you all, and especially Attila and Adam.

I guess I will go for it then.

Maciek


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translexIQ  Identity Verified
Local time: 14:24
French to English
+ ...
Yes and No Feb 8, 2008

This EU VAT number is needed only for international business within EU (starts with country code, "HU" in this case). The companies should have a national one which can or cannot coincide with the national one. (e.g. international HU12345678, national 12345678 or other) A company cannot make international business (issue invoices, make payments) in the EU without this number. I do not know how the papers and money run between you two but I would be cautious to do international business without this number. The explanation they gave you could also show that they never did international business and have no idea about the requirements to do so and they refer to national regulations.
On the other side, I have visited the site you mentionned and tried several VAT numbers from legitimate companies I work with for the last years (RO, PL, DE, FR) and every time I got an error message. This site is as good as their access to the several databases needed. For the recent members of the EU it might be that either the databases are not yet ready or the access to them is not granted. On the other hand, for the old members DE, FR I still had the error message which puzzles me.
I had the same problem and solved it from the German Tax Office site http://www.bzst.bund.de but to do so you need the VAT number of a German company to log on. This site is also not perfect as the data base for Slovakia is not yet complete and that might be the case for Hungary, too. I hope you succeed.


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Marie-Céline GEORG  Identity Verified
France
Local time: 13:24
English to French
+ ...
Invoice VAT Feb 8, 2008

Hi,

AFAIK, as regards VAT (i.e. in France, but logically it should be the same in all Europe), you can invoice a European customer without VAT only if this customer can provide you a VAT number, which proves that he will pay VAT in his country.

If the customer has no VAT number for whatever reason, you have to invoice it as if it was a private individual (who can buy anything abroad, but always paying the corresponding VAT) so you should take it into account in your quote.


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H_Laci
Local time: 13:24
English to Hungarian
+ ...
Hungarian Tax and Financial Control Administration Feb 8, 2008

Hi,

This mask is correct
xxxxxxxx-1-43.

From the homepage of Hungarian Tax and Financial Control Administration
http://www.apeh.hu/adatbleker/afaalanytaj/afalekerdezes


The VAT number consists 11 digits, 8 are the identification nr. the 9. is the VAT code and the last 2 are for the assigned administration office.

Laci


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