The difference between EU tax code and vat.

Difference between EU tax code and VAT

The EU tax code and VAT (Value Added Tax) are important tax systems in European countries, but they are different in many ways. The EU tax code is a unique number issued by the European Commission that identifies taxpayers conducting multinational transactions within the EU, and usually consists of a country code and a company number, whereas VAT is a tax system used by EU countries for the sale of goods and services.

First of all, the EU tax code is mainly used to identify taxpayers in multinational transactions. It is very important for import and export business, and can help governments track and manage multinational transactions to ensure that taxpayers pay taxes in accordance with the corresponding tax laws and regulations. VAT, on the other hand, is a kind of consumer tax, which is mainly levied on the final consumers through the sales of goods and services, and is paid by enterprises to the government.

Secondly, the application procedures of EU tax code and VAT are also different. The application for an EU tax code needs to be made at the European Commission or the tax authorities of the member states, and the applicant needs to provide the corresponding corporate information and supporting documents, and obtain a tax code after examination. On the other hand, VAT applications are handled by the tax authorities of each EU member state, and applicants are required to file and register according to the specific regulations of the respective country.

In addition, there is a difference between the EU tax code and VAT in terms of tax payment. The EU tax code is mainly used for VAT exemption procedures in cross-border transactions, and taxpayers are required to provide their tax codes to the other party to ensure the legality and compliance of the transactions. VAT, on the other hand, is a step-by-step tax levied on the sale of domestic goods and services, and is ultimately borne by the consumer.

Overall, although both the EU tax code and VAT are important tax systems in the EU, there are obvious differences in their functions, application procedures and tax payment methods. Understanding these differences will help enterprises and taxpayers to better comply with the corresponding tax laws and regulations, and to legally file and pay taxes in cross-border transactions and domestic sales.