The "Value Added Tax / Goods and Services Tax" add-on supports tax exemption based on the customer's VAT ID. Buyers who specify a VAT-using European country in the Country field of their address (in either the shipping or the billing address block, during checkout, or while editing the address book in their profile) will have an option to fill in an additional field - VAT number. If they have a VAT ID that allows them not to pay VAT on the purchase, they can submit it using this field.

Your online store will provide validation of the VAT number format and will submit the provided VAT number to the free VAT number validation service at http://ec.europa.eu/taxation_customs/vies/. If the service returns information that the specified VAT number is valid, the X-Cart store will automatically remove the VAT amount for the buyer, so they will not have to pay it. However, if the service responds that the VAT number is invalid or fails to respond (this sometimes happens if the service is down or overloaded), your online store will not remove the VAT taxation for the buyer.

As an alternative to the free http://ec.europa.eu/taxation_customs/vies/ service, it is possible to use a paid VAT number validation service - https://vatlayer.com/.

To do so:

  1. Sign up at https://vatlayer.com/product.

  2. Get an API key to access the service.

  3. Submit the API key in the "EU VAT Number Validation API key (vatlayer.com)" field on the "Value Added Tax / Goods and Services Tax" add-on settings page (Store Setup -> Taxes).

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