Viewing 3 replies - 1 through 3 (of 3 total)
  • Plugin Author Diego

    (@daigo75)

    The plugin checks if the VAT number exists and if it’s valid for the selected country, using the VIES service. It doesn’t currently check if it matches the billing details. For example, if you enter your own Dutch address and enter a valid Dutch VAT number, the plugin will accept it.
    We are evaluating the possibility of adding further validation in a future version.

    Please note that checking the address might not increase validity of data as much as it seems. A malicious customer could simply enter all the data copied from VIES (it’s a public service), and the validation would pass anyway. Since the billing address doesn’t really matter for digital downloads, and the shipping address is independent from it. A consumer could easily enter perfectly valid billing data and, eventually, his own shipping address (completely different) and get around the VAT.

    If the issue of customers trying to “cheat” is critical, our suggestion is to install an anti-fraud solution that could cross check the information provided during the purchase. This will surely decrease the risk, with the drawback of an added cost (good anti-fraud solutions are rarely cheap).

    Thread Starter beltex

    (@beltex)

    Its not the problem that people try to cheat, its the problem that we cant prove we checked in an ok matter.

    I personally dont care who buys at my shop, but i need to prove that i checked. Geoip is nice, customer ticking a box is awesome but the VIES check is mandatory if they provide a tax id. But unfortunatly including the business details as else its useless.

    That people could fake that… well as we did all checks that we could thats not our problem.

    It is a legal requirement to check for business details also using the VIES system where an exception is only made for member states that do not provide that information.

    This is not smth i dream up, its in our laws. Per example the Dutch tax agency states on their website that doing a VIES check is sufficient but has to include the business details. Only if they are not available can u skip it. I asume that this is true in all states, or they dont make the exception

    The reasons are obvious and they are working to have all member states report on the business details.

    Plugin Author Diego

    (@daigo75)

    I’m not aware that checking all VIES details is a legal requirement, as the information we got from our own tax agency is different. It’s possible that some countries are stricter than others, of course (we don’t know the Dutch law, we only communicated with our own tax agent).

    As I wrote, we will review the check in a future update, to see how we can add further verifications. We work to improve the solution as much as we can, but please note that we are not tax consultants, and that we cannot give a guarantee of compliance.

    The fact that the information can easily be faked is probably the reason why larger marketplaces do not allow to enter a VAT number at checkout, but require a separate registration as a business (the VAT number is entered in the account page), with the inclusion of scans of official documents that prove the business registration, signatures and so on. For example, Amazon (which, incidentally, was the actual target of the new EU regulations, which were supposed to make the market “fairer for small businesses“), does that, so that they are 100% covered. A small merchant cannot implement and manage such a complicated system, thus getting into even further disadvantage.

    Curiously, one of the most common requests we receive is to allow VAT to be deducted even when the VAT number check fails because VIES is not available (and it can happen, randomly, because each country provides its own independent system). The reason is that many of the SMB that sell digital products online want to streamline the checkout process as much as possible. Many of them never collected a single detail about the buyer: they published a PayPal “buy now” button, that the customer used to pay and get immediate access to the products.
    Requesting extra information, such as name, address, etc, made the purchase process slower and more cumbersome, resulting in a much higher abandonment rate. Due to that, many merchants are trying to collect as little information as possible.

    It looks like what the regulations ask and what the merchants are trying to do are going in opposite directions.

Viewing 3 replies - 1 through 3 (of 3 total)
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