When you ship goods to another EU country, you are exempt from VAT in your country. But this exemption does not apply where it is shown that the supplier knew or could not have been unaware that the intended recipient of the shipment or transport had no real business.
It is thus up to each business to be able to demonstrate that it has implemented reasonable controls on its customers to avoid losing its VAT exemption.
The tax authorities may also refuse to deduct VAT paid to one of your suppliers, including from your country, if they show that you knew or could not have been unaware that, through this acquisition, you were participating in a fraud consisting in not paying the tax due on this supply.
One of the various checks a business can carry out on its customers and suppliers is to check the validity of the VAT number supplied. By checking the existence of this number with the tax authorities in the customer's or supplier's country of origin, the company shows its good faith. While this check is not sufficient in itself to prevent the exemption or deduction from being called into question, depending on the case, it is a first element in demonstrating the company's good faith.
The European Commission has set up a VAT number verification service which issues, to identified businesses, a consultation certificate for each number verified. This certificate is provided by CheckTVA for each number tested.
As a business's activity is likely to change rapidly, it is advisable to periodically check the VAT numbers of its customers and suppliers. However, an annual verification seems insufficient in view of the speed of closure of businesses involved in VAT fraud schemes. The best protection seems to be a monthly verification, in line with the periodicity of VAT returns in most EU countries.
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