Fonoa data shows that 10% of business tax information changes every year. If you aren’t regularly validating your existing data, one in ten of your VAT or GST IDs may be outdated.

This isn’t just a data problem. It’s a compliance risk, a financial liability, and a major operational blind spot.

The business threat in your master data

Every global finance team knows the sting of a rejected invoice, a surprise audit, or a denied tax reclaim. Often, the immediate reaction is to blame system bugs or human error. But dig deeper, and you'll uncover a far more worrying, yet easily preventable issue: outdated or invalid tax identification numbers (VAT, GST, TINs).

In today’s world of real-time tax enforcement and digital reporting, a single invalid tax ID can ripple across your entire operation. The good news? A simple shift in how you manage and revalidate these IDs can dramatically reduce compliance risk, prevent costly disruptions, and give your business a scalable edge.

Revalidation is no longer optional for tax data

Indirect tax numbers are not fixed assets. They change constantly due to deregistrations, supplier restructuring, cross-border expansions, and new tax mandates. A VAT number that was valid six months ago may now be canceled. In the age of API-mandated validations and e-invoicing clearance models, this seemingly small error becomes a business critical problem.

Fonoa’s data shows that, on average, 10% of business tax data changes every year. That means one in ten of your tax IDs could be outdated, creating risk you can’t afford to ignore.

Here’s what’s at stake:

• Rejected invoices = delayed payments and cash flow issues
• Denied VAT or GST reclaims = direct hits to your bottom line
• Wrong tax charges = customer dissatisfaction or future liability
• Bad master data = inaccurate reports and audit risks

And it’s not just theoretical. From Egypt’s API-based buyer validation to Turkey’s clearance mandates and South Africa’s rigorous audit enforcement, governments are moving fast and enforcing in real time.

Real-world proof: what digital leaders are doing right

Companies like Amazon and Twilio have already built tax ID revalidation into their operational DNA.

Amazon validates every seller’s VAT registration before they are allowed to sell in the EU, protecting itself from marketplace VAT liabilities. Twilio performs real-time checks at both signup and billing, only charging VAT where legally required.

These are not just compliance checks. They are smart, scalable systems that:

• Avoid unnecessary tax charges
• Maintain audit-ready documentation
• Enable seamless global expansion without multiplying complexity

Quarterly revalidation keeps Remote safe from audit risk

Another standout example is Remote, a global HR and payroll platform operating in over 180 countries. With a growing network of business customers, Remote understands how quickly tax data can become stale, and how risky it is to rely on outdated VAT/GST numbers.

To stay ahead of any outdated data, Remote automatically revalidates tax identification numbers every quarter. This cadence ensures their records stay fresh, even as businesses restructure, deregister, or change jurisdictions.

I think Fonoa’s Lookup is the best on the market. Now we can catch invalid VAT IDs before invoicing.
Kirsten Best, Head of VAT at Remote

By automating this process, Remote catches hundreds of invalid tax IDs every year, well before they can impact invoicing, reporting, or tax filings. This proactive approach gives their finance and compliance teams peace of mind and keeps the customer experience friction-free while validating tens of thousands Tax IDs every year.

How to build a better validation process

Tax ID revalidation doesn’t have to cause headaches. In fact, it should be proactive and automated. Here’s how:

1. Validate at onboarding
   Ensure every new vendor or customer has a correct, active tax ID before they enter your systems.
2. Use format and live checks
   Do not just validate syntax. Confirm IDs against real-time government databases.
3. Revalidate regularly
   Every three months is a strong baseline to catch deregistrations and changes.
   A recurring validation cycle (every 3 months) helps catch changes early and prevents downstream issues
4. ‍Store validation proofs
   Log every check to create a clear audit trail and reduce compliance headaches.
5. ‍Automate everything
   Manual checks will not scale. Use tools that connect directly to tax authority systems for continuous validation.

Reframe the narrative: from burden to business advantage

Revalidating tax IDs is not just a compliance chore. It is a strategic safeguard and your first and most effective line of defense against downstream chaos. It ensures:

• Your e-invoices are accepted
• Your tax filings are accurate
• Your customer experience remains smooth
• Your expansion plans do not hit avoidable snags
• Your revenue and working capital is protected 

Too often, tax data validation is treated as a necessary evil. But the companies winning today and staying audit ready tomorrow are leveraging it as an operational differentiator. If you’re still relying on static master data, now is the time to change that.

Final thought: revalidate like a pro

As tax authorities evolve and compliance moves into real time, ignoring tax ID revalidation is a risk few businesses can afford. The leaders of tomorrow are already embedding validation into their finance stack and reaping the benefits of control, confidence, and continuity.

So the next time someone asks, "Why bother rechecking that VAT number?" you have your answer.

Revalidate early. Revalidate often. Revalidate smart.

Fonoa’s Lookup makes it easy. One API, continuous validation, fully integrated across your tax tech stack. From onboarding to tax calculation, e-invoicing, and return filings, Lookup keeps every part of your indirect tax lifecycle connected and accurate.

Ready to future-proof your tax data? Let’s talk.

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