Validating European VAT numbers in Salesforce with VIES

In cross-border B2B sales, a lot comes down to trust and speed: quoting fast, closing fast, invoicing fast. In that rush, one element goes wrong remarkably often, with consequences you only feel much later in your bookkeeping and during a possible audit. Your European customer’s VAT number.

It looks like an administrative detail. In reality it touches directly on your tax risk, your cash flow and the quality of your customer data.

Why a valid VAT number is not a detail

If, as a Dutch company, you sell goods or services to a business in another EU member state, you may apply the 0% VAT rate. That is attractive for your customer and makes your offer competitive. But there is a clear condition attached.

The legal obligation for invoices to EU customers outside the Netherlands

To be allowed to apply the 0% VAT rate, you have to demonstrate that your customer is a VAT-registered business in another EU member state. In practice this means you must be able to show that the VAT number used was valid and active in that country at the moment of supply.

That number has to appear on the invoice, and the number has to be correct. The Dutch Tax Administration does not assume that you simply trusted the number to be right. As a supplier you have a duty of care to verify this and to keep evidence of it.

In other words: an incorrect, expired or non-existent VAT number leaves your entire application of the 0% rate vulnerable.

What goes wrong with an invalid or expired number

If an audit reveals that you used an incorrect or expired VAT number, the Tax Administration may conclude that you applied the 0% rate wrongly. The result is that you still have to pay 21% Dutch VAT on that revenue, often with interest and possibly with a penalty. That is rarely an amount you budgeted for in advance.

There are practical problems too. Customers may reject invoices because the VAT number is incorrect or does not match the official company name. You receive requests to amend the invoice, you have to issue credit notes and send out new invoices. That costs time, delays payments and causes frustration for both finance and sales.

On top of that, companies regularly change their legal form, relocate or are dissolved. A VAT number that worked fine last year may be invalid this year. Without structural checks, you only notice once it is too late.

What VIES actually is

To make this problem manageable, the EU has set up a system that lets you check VAT numbers centrally.

The European system behind the validation

VIES stands for VAT Information Exchange System. It is a system run by the European Commission that connects the VAT registers of the member states. Through VIES you can check in real time whether a VAT number is valid and active in your customer’s country.

The strength of VIES is that it checks directly with the national tax authorities. The information you get back therefore comes from the source registration and is current. You see not only whether the number is valid, but also under which name and at which location the company is officially registered.

This check via VIES is a recognised way to meet your duty of care. If you can show that you checked the number via VIES and that it was valid at that moment, you stand much stronger in a discussion with the Tax Administration.

Why the standalone VIES website is cumbersome in a busy sales process

The European Commission offers VIES as a public website. In theory that is the solution: you open the site, choose a country, enter a VAT number and read the result. In practice, that often does not work in a busy sales process.

Your sales team works in Salesforce. An employee receives a new VAT number, opens the account, copies the number, switches to another browser tab, fills in the details on the VIES site, assesses the outcome and then has to record somewhere that a check was carried out. These are a lot of manual steps, at exactly the moments when attention is fully on the deal.

The reality is that this extra step is skipped or postponed too often. It is not because people fail to see the importance, but because the process is not integrated into the environment where they work every day. The obligation then remains something that mainly exists on paper, but is not structurally complied with.

Validating VAT numbers without leaving Salesforce

The solution is to treat VIES not as a separate website, but as a service you use directly from within Salesforce. That makes validation a natural part of your customer and invoicing process.

Validating from the account record

In Salesforce you add a field for the VAT number to the account record, supplemented with functionality to validate the number directly. Through an API connection with VIES, Salesforce checks in real time whether the number is valid and retrieves the official company name and location.

You see the outcome immediately on screen, for example as a status field indicating whether the number is valid. At the same time, the system records when the check was carried out and what the outcome was. This way you automatically build up a check history for each customer.

For finance and operations, it is visible at a glance which accounts have a validated VAT number. Reports can show which customers have not yet been checked or for whom a re-check is advisable. Everything happens within Salesforce, without separate lists or notes.

Creating new companies based on a VAT number

You can also use the VIES connection as a starting point when creating new accounts. Instead of an employee manually typing out the company name, address and VAT number, they only enter the VAT number.

Salesforce then requests the official details via VIES and fills them automatically into the fields of the new account record. That saves time, prevents spelling mistakes and ensures the basic data matches the registration with the tax authority straight away.

An added benefit is that you prevent duplicates. If the same VAT number is entered again, Salesforce can flag this immediately. That keeps your customer base clean and prevents the same customer from ending up in your system under different names.

What this delivers for sales and finance

By building VIES validation structurally into your Salesforce environment, you improve your tax certainty, your operational efficiency and your data quality all at once.

A clean accounts receivable and fewer corrections after the fact

For sales, this means that creating and updating customer data becomes less error-prone. There is no longer a separate screen needed to check a VAT number, and there are no more loose emails to finance asking whether a number is correct. Validation takes place at the moment the number is recorded, right where your team is already working.

For finance, it brings immediate peace of mind to the accounts receivable. Invoices are based on validated data, which sharply reduces errors around VAT numbers. Fewer credit notes are needed, there are fewer discussions with customers about incorrect invoices, and during a VAT audit you have immediate insight in Salesforce into which numbers were checked and when.

Data quality is not a by-product, but a visible result. Account data is complete and consistent from the start. That quality carries through into reporting, forecasting and marketing activities aimed at European customers. You build an environment in which you can rely on your data, instead of having to clean it up afterwards.

For organisations already working on further integrations and process automation, this solution fits in seamlessly. VIES validation can be combined with connections to financial packages, automatic creation of debtors in the ERP system and workflows that only allow invoicing once the VAT number has been approved.

Getting started

VIES validation in Salesforce does not require years of implementation, but it does require a well-considered setup. You want the solution to fit your existing sales and invoicing process, and you want finance, sales and IT to all be able to rely on it.

Resolve IT is a Salesforce Crest Partner and helps organisations realise improvements like this in a practical and future-proof way. We set up Salesforce so that VIES validation becomes a logical part of your sales process. In doing so, we look beyond just the VAT field. Where it makes sense, we combine this with improvements in data quality, process automation and integrations with your financial systems.

Want to see what VAT validation via VIES in Salesforce could look like in your situation, and what it concretely delivers for sales and finance? Plan a demo or request a trial setup. We will show you in a live environment how you move from a vulnerable manual process to a tightly secured part of your daily operation.

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