What Is the VAT Classifier and How to Use It?

Correct calculation of value-added tax (VAT) is one of the most important parts of any company’s accounting. To manage this area accurately, smoothly, and without risk, it is essential to use the correct VAT classifier codes.

These codes help identify which taxation regime applies to goods or services—whether the standard rate, a reduced rate, or VAT exemption applies.

Even small mistakes in VAT declarations can cause serious problems in business: from incorrect filings to tax disputes or penalties. Therefore, knowing what the VAT classifier is and how to use it is essential for anyone working with invoices, VAT declarations, or other accounting data.

In This Article You Will Learn:

• What the VAT classifier is and why it matters
• What its structure looks like and where to find the latest codes
• How to practically use the classifier in your business
• What mistakes to avoid

The VAT classifier is an official document that provides codes used to describe the VAT taxation rules for specific goods or services. These codes act as “tags” that help precisely determine which VAT rules apply to a given transaction.

It is maintained by the State Tax Inspectorate (VMI) and is regularly updated according to changes in legislation. Each code is linked to a specific article of the VAT law—for example:

• PVM96 means the reverse charge mechanism applies
• PVM33 indicates the transaction involves the supply of goods to other EU countries

The classifier helps to:

• Correctly issue invoices
• Manage VAT accounting in the bookkeeping system
• Prepare and submit VAT declarations
• Ensure compliance with VAT law and avoid tax violations

Without the classifier, there is a risk of miscalculating taxes or even being fined for incorrect tax accounting. Therefore, every accountant or business owner should not only know that the classifier exists but also know how to use it.

The VAT classifier consists of codes that define:

• The type of goods or services (e.g., construction work, consulting services, exports)
• The nature of VAT application (standard, reduced, reverse charge, or exempt)
• The legal basis under which VAT is applied or not applied

Examples:

• PVM95 – indicates a VAT exemption
• PVM33 – related to the supply of goods to other EU countries
• PVM96 – used in reverse charge cases

The latest version of the classifier can be found on the VMI website

Every time an invoice is issued or a transaction is recorded in the accounting system, the appropriate VAT code must be selected to reflect the nature of the transaction.

How to do it:

1. Assess the nature of the good or service
2. Check whether standard, reduced, or reverse VAT applies
3. Select the appropriate VAT code from the classifier
4. Assign the code in the invoice and accounting software

Using the Rivile ERP business management system, all VAT codes are integrated directly into the invoice and declaration generation processes—reducing the risk of errors and saving time.

Incorrect use of VAT codes can lead to serious consequences:

• Tax errors: Incorrect VAT calculation can distort declarations
• STI audits: If codes don’t match the actual transaction type, the STI may initiate an investigation
• Fines and penalties: Financial penalties apply for incorrect VAT declarations

Therefore, businesses must pay close attention to this area—especially if using multiple VAT rates or exporting services.

Current VAT classifiers are published:

• On the VMI website
• On national information portals
• In accounting systems like Rivile ERP, where VAT codes are regularly updated according to the latest laws

How often is the VAT classifier updated?
The classifier is updated according to changes in the VAT law—usually several times a year.

How to use the VAT classifier?
Choose the code based on the type of good or service and the applicable VAT rate—use it in invoices and accounting.

Can I use an older version of the classifier?
No, always use the latest version, as old codes may be invalid or incorrect.

Is the VAT classifier the same across the European Union?
No, each country uses its own national classifiers, although some provisions (e.g., intra-EU supply of goods) are harmonized.

If you want to learn more about the VAT law itself, we invite you to read our article What is the VAT Law?