Home / Use cases / Custom

EU VAT compliance for SaaS billing

Handle EU VAT for SaaS subscriptions. Validate customer VAT numbers at signup, determine B2B vs B2C tax treatment, and generate compliant invoices with the correct VAT amount.

Implementation steps

1. 1

   Collect VAT number at signup

   Add an optional VAT number field to your signup form and show it conditionally when the user selects an EU country. Use a client-side regex to catch obvious format errors before the form is submitted (e.g. DE must be DE + exactly 9 digits), reducing unnecessary API calls and giving instant feedback to users who mistype their number.

2. 2

   Validate and classify customer (B2B/B2C)

   On form submission, call GET /api/v1/validate/:country/:vat from your server. Set the customer's tax_treatment column to 'reverse_charge' when status === 'active', 'standard_rate' when status === 'invalid' or no VAT number was provided, and 'pending' when status === 'service_unavailable' so a background job can retry within the hour. Store the cached flag from the response to distinguish a live VIES confirmation from a cached result.

3. 3

   Configure billing engine for correct tax

   Pass the tax classification to your billing engine: for reverse_charge customers, disable VAT calculation and add a 'Reverse charge — VAT to be accounted for by the recipient' line to the invoice per EU invoice Directive Article 226(11a). For B2C customers, apply the destination-country VAT rate and flag the invoice for OSS reporting. Using Stripe Tax, this translates to tax_exempt: 'reverse' for B2B and a standard tax_behavior: 'exclusive' subscription for B2C.

4. 4

   Generate compliant PDF invoices

   EU-compliant invoices must include the supplier's VAT number, the buyer's VAT number (for reverse-charge invoices), the company_name and company_address from the TaxID validation response, and the reverse-charge annotation. Render these fields from your customer record into your PDF template; missing any of them can cause the invoice to be rejected by the buyer's tax authority and denied as input VAT credit.

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.

Related use cases