Enable VAT number validation

Problem Statement

Customers are charged taxes even when a VAT number is present. Reverse charge is not applying. How does Chargebee validate VAT numbers? I want to tax customers who have not validated their VAT in VIES. Chargebee is applying reverse charge to NO VIES customers—how do I avoid this?

Solution

Chargebee uses VIES to validate VAT numbers. You can enable EU VAT validation for your merchants' VAT numbers on signup and renewal via the tax region settings. If VAT validation is not enabled for the EU region, Chargebee does not validate the VAT number in VIES and exempts the customer from taxes.

Steps to Set It Up

Go to Settings > Configure Chargebee > Taxes
Enable EU VAT validation

Additional Information

Note:

VAT validation runs in these cases: (1) every 3 months, and (2) when the VAT number is added or updated.

Note:

When VAT validation is enabled, it applies only to upcoming invoices for new and existing customers.

Reverse charge: Applied for customers in a different EU member state than your organization when a VAT number is present. See EU VAT exemption.
Tax exemption: Taxes are not applied if "This customer is exempt from tax payment" is enabled under Customers > Configuration.

My company is incorporated in a Non-EU country, do I have to charge EU VAT for customers from the European Union?

'[Message] This customer''s location couldn''t be validated as required for compliance with the new EU VAT 2015 rules. Subscriptions for this customer will cancel upon renewal if the required information isn''t updated.'

Subscription canceled due to EU VAT compliance

I haven't registered for VAT MOSS. How can I display my company's VAT number on the invoices?

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