In this support document for the EU VAT Number extension, the abbreviation EU means European Union.
EU VAT Number for WooCommerce allows you to:
- Collect and validate EU VAT numbers at Checkout
- Exempt businesses from paying VAT (Value Added Tax), if necessary
- Collect and validate user location in B2C transactions
- Handle EU Tax requirements for digital goods
The team at WooCommerce.com can help with setting up tax rates in the WooCommerce settings and how the platform handles taxes/VAT/GST based on these settings, but not when or what to charge.
We’re not tax professionals so our advice is how to use our software. For specific advice when it comes to what or when to charge tax/VAT/GST etc, we recommend consulting with a tax professional or an accountant on what may be your best options.
Each business is unique, and there’s no way we can cover every possibility.
- Purchase the product from WooCommerce.com
- Download the ZIP file from your WooCommerce.com dashboard
- Go to Plugins > Add New > Upload and select the ZIP file you just downloaded
- Click Install Now and then Activate.
- Read on to learn how to set up and configure the product.
More information at: Install and Activate Plugins/Extensions.
Setup and Configuration
- Go to WooCommerce > Settings > Tax and scroll down the page.
EU VAT Number Handling
- VAT Number Field Label – Shown to customers at checkout. The default is VAT Number.
- VAT Number Field Description – Shown below the VAT field on the checkout page when the field is in focus. The default is blank.
- Remove VAT for Businesses in Your Base Country – If enabled, businesses with a valid number in your base country will be VAT exempt.
- Failed Validation Handling – Tell the plugin what to do if a VAT number fails validation.
- Reject the order and show an error
- Accept the order without removing VAT
- Accept the order and remove VAT as normal
- Enable B2B Transactions – This will force users to check out with a VAT Number, useful for sites that transact purely from B2B.
EU VAT Digital Goods Handling
EU VAT laws for digital goods changed on January 1, 2015, affecting B2C transactions only. VAT on digital goods must be calculated based on customer location, and store owners need to collect evidence of this via IP address and Billing Address.
There are two settings:
- Tax Classes for Digital Goods – Select which of your Tax Classes is specifically for digital goods. This ensures the user is charged tax based on their Billing Address and not the base or shipping address that physical good taxes are often calculated with.
- Collect and Validate Evidence – Tick the box to validate the user’s IP address against their billing country. If they mismatch, the user is required to confirm their address is correct (self-declaration). Data is stored in the order.
4. Save changes.
Set up EU VAT rates for digital goods
For EU VAT on digital goods, you need to input VAT rates into WooCommerce. We have a guide for this at: Setting up EU VAT Rates for Digital Products.
The checkout process va