Fonoa Lookup allows you to validate tax identification numbers by format, integrity, and through digital connections with government databases throughout the world. This ensures the tax identification number provided to you by customers and/or suppliers is accurate.

Validating tax identification numbers is important for various reasons. Sometimes certain transactions, like cross-border services to business customers, do not carry indirect tax (e.g., VAT, GST, ST). To determine if you need to charge indirect tax to your customers in cross-border situations, you need to verify the customer’s taxable status (i.e., consumer or business customer) through your customer’s Tax Identification Number. Validating your customer’s Tax Number provides you with important evidence tax authorities require to support your decision to charge or not charge tax.

However, without validation, any given Tax Identification Number the customer provides you with might be incorrect, like in the following common situations:

The customer accidentally entered a Tax Identification Number incorrectly.
In order to purchase goods or services for a lower price and circumvent paying taxes, the non-business customer entered a Tax Identification Number belonging to another entity.

In these situations, not charging tax generates liabilities for your business, as your business is liable to remit taxes on the transaction instead of your customer. To avoid errors and unforeseen liabilities, you can validate whether the entered Tax Identification Number corresponds to the customer’s entity and how to treat that entity with regards to taxes.