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DAC7 marketplace seller VAT verification

Verify seller VAT numbers during marketplace onboarding for DAC7 compliance. EU platforms must collect and validate tax IDs for sellers earning above the reporting threshold.

Implementation steps

1. 1

   Collect VAT number during seller registration

   Add a VAT number field to your seller onboarding flow and make it required for EU-resident sellers who select 'business' account type. Apply client-side country-prefix validation (e.g. FR must start with FR followed by two alphanumeric characters and nine digits) to catch format errors early, but treat client-side checks as UX only — always re-validate server-side.

2. 2

   Validate via TaxID API

   Call GET /api/v1/validate/:country/:vat from your onboarding backend and store the entire JSON response body. For status: 'service_unavailable', set the seller's tax_status to 'pending' and schedule an automatic retry using a queue (e.g. BullMQ or SQS) so validation completes before the seller's first payout rather than silently passing an unverified number.

3. 3

   Store validation result and timestamp

   Persist status, company_name, company_address, request_id, and validated_at in your sellers table. Index validated_at so your DAC7 reporting job can efficiently query sellers whose validation is older than 12 months and trigger a re-validation sweep before the annual January 31 filing deadline.

4. 4

   Generate annual DAC7 reports

   At year-end, query all sellers whose cumulative platform earnings exceed €2,000 or who completed 25+ transactions. For each, include the validated company_name, company_address, and VAT number from your stored TaxID results in the XML report file submitted to your competent tax authority. Sellers whose VAT was never successfully validated (status remained 'pending') must be flagged and withheld from payouts per DAC7 Article 12 obligations.

Code example

const res = await fetch(
  'http://localhost:3000/api/v1/validate/DE/DE123456789',
  { headers: { 'Authorization': 'Bearer YOUR_API_KEY' } }
);
const { valid, status, company_name, company_address } = await res.json();

if (valid) {
  console.log(`Valid EU business: ${company_name}`);
} else if (status === 'service_unavailable') {
  // VIES is temporarily down — retry or allow with manual check
  console.log('VIES unavailable — check back in a few minutes');
} else {
  console.log('Invalid VAT number — charge local tax rate');
}

import requests

res = requests.get(
    "http://localhost:3000/api/v1/validate/DE/DE123456789",
    headers={"Authorization": "Bearer YOUR_API_KEY"}
)
data = res.json()

if data["valid"]:
    print(f"Valid: {data['company_name']}")
elif data["status"] == "service_unavailable":
    print("VIES temporarily unavailable")
else:
    print("Invalid VAT number")

API response

The TaxID API returns a consistent JSON response for every validation request:

{
  "valid": true,
  "status": "active",
  "country_code": "DE",
  "vat_number": "123456789",
  "company_name": "Example GmbH",
  "company_address": "Musterstraße 1, 10115 Berlin",
  "request_date": "2026-05-10T00:00:00.000Z",
  "cached": false,
  "request_id": "req_01j..."
}

Error handling

The API uses a consistent Stripe-style error format. Always handle service_unavailable separately — VIES has occasional downtime and you should not reject valid customers during outages.

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