Each business in the supply chain charges VAT on what it sells, pays VAT on what it buys, and remits the difference to the government. A VAT number is the unique identifier that ties a business to this system, appearing on every invoice and enabling the chain of credits that makes VAT function. A VAT number (Value Added Tax number) is a unique identifier assigned to businesses and legal entities that are registered for value-added tax.

Understanding the Context

It is used primarily in invoicing, cross-border transactions, and tax reporting.