Verification of the tax status of business partners
In international business, companies face the challenge of identifying tax risks in business relationships at an early stage and managing them effectively.
In many EU Member States, the recipient of a supply may be liable for the supplier’s VAT – particularly if the business partner is classified as untrustworthy for tax purposes or if payments are made via unregistered bank accounts.
In addition, specific settlement mechanisms apply in certain countries – such as the split-payment procedure – which must be taken into account.
The relevant information is provided by the tax authorities in national registers, such as the Polish ‘White List’, the Czech list of unreliable taxpayers or the relevant split-payment registers.
Companies must check this data before carrying out transactions. In practice, this is complex to implement: status information can change at short notice, and checks must be carried out regularly.
Companies therefore face the challenge of establishing a secure and efficient verification process.
With the status checks within the Verifier Suite, KMLZ offers a specialised solution for the automated verification of business partners’ tax status.
The tool cross-checks relevant data directly against official tax authority registers and presents the results in a structured and clear manner.
The system clearly indicates whether a business partner is considered tax-compliant, whether the bank accounts used are registered, and whether special arrangements such as split payment apply.
Databases
PL – White List (VAT-ID / IBAN)
CZ – Unreliable VAT Payer
IT – Split Payment
SK – IBAN
FAQ
What is checked during status checks?
Status checks involve verifying business partners’ tax compliance, their registered bank accounts and specific settlement mechanisms such as split payment.
Why are status checks necessary?
In many countries, the recipient of a supply may be liable for the supplier’s VAT. These risks can be avoided by carrying out checks at an early stage.
What is the ‘White List’ in Poland?
The ‘White List’ is a register maintained by the Polish tax authorities which, amongst other things, lists companies’ bank accounts registered for tax purposes. Payments made to accounts not included on the list may give rise to tax risks.
What does ‘unreliable VAT payer’ mean?
In some countries, such as the Czech Republic, the tax authorities maintain lists of unreliable taxpayers. Doing business with such companies may give rise to liability risks.
When must a status check be carried out?
The check should be carried out prior to any relevant transactions, in particular before making payments or entering into new business relationships.
Why isn’t a one-off test enough?
A company’s tax status may change at any time. It is therefore necessary to carry out regular or transaction-specific reviews.
What role does split payment play?
Under the split payment scheme, VAT is not paid to the supplier but is remitted directly to the tax authorities. It must be checked in advance whether this procedure applies.
How does the tool assist with status checks?
The tool checks the relevant registers and presents the results in a clear and structured manner, enabling a quick decision to be made as to whether a risk exists.
Automated validation of EU VAT identification numbers and tax numbers from selected third countries via relevant national and international databases.
- ensures VAT exemption for intra-Community supplies
- reduces liability risks
- documents audit results
Screening of individuals, companies and organisations against international sanctions and compliance databases.
- prevents breaches of embargo and sanctions regulations
- reduces the risk of criminal prosecution and fines
- provides a transparent and traceable assessment of hits
- documents screening results
Verification of the validity of exemption certificates for construction withholding tax.
- avoids liability risks
- carries out verification efficiently, even with high volumes
- documents verification results
