How to Handle VAT Validation in Your SaaS Billing Flow

A SaaS billing flow needs both customer evidence and a tax-treatment decision. VAT validation supplies registration evidence; it does not establish the customer's business status, establishment or the treatment of every transaction. This guide covers ordinary cross-border B2B SaaS services to EU customers.

Why validate before invoicing?

A backend check gives customers a chance to correct their details and lets you retain evidence before finalizing the invoice. An outage does not mean a number is invalid. Keep an unresolved checkout or invoice available for retry or review, and use the applicable correction process if an issued invoice needs changing.

The validation flow

1. Collect: Ask for the VAT number, business details and the establishment receiving the service. Some businesses, including sole proprietors, have VAT numbers; others do not.
2. Validate: Make the authoritative request on the backend. Check HTTP status, validity and freshness metadata.
3. Store: Retain the original timestamp, source, request ID and consultation number when returned. Represent missing proof explicitly.
4. Assess: Determine customer status and capacity, place of supply and supplier establishment separately. Review missing or invalid evidence without automatically classifying the buyer as B2C.
5. Invoice: Apply the resulting treatment and the applicable invoice rules. Reverse charge means the customer accounts for VAT; it is not a statutory zero rate.

Article 196 can cover a supplier outside the EU when ordinary B2B services are taxable in the EU customer's Member State and the supplier is not established there. Same-country ordinary SaaS normally follows domestic rules, while specialist reverse charge regimes and other exceptions require separate analysis. See the reverse charge guide for the scope and sources.

Code example

Use the runnable TypeScript registration-evidence example. It returns Verified, Invalid, Unavailable or Error, preserves evidence, and leaves tax calculation to your billing policy. It uses native fetch with cache=false and fallback=false, then checks that the response is live, noncached and not stale. Stored outage responses are not fresh checks.

curl --max-time 15 "https://api.avatcado.com/v1/validate?vat_number=FR82542065479&cache=false&fallback=false" \
  -H "Authorization: Bearer $AVATCADO_API_KEY"

Set AVATCADO_API_KEY on your server. Add your genuine requester VAT number only if you have one; a non-EU seller does not need to invent a number. See the API documentation for the response schema and error codes.

Plugging into your billing tool

Stripe

Stripe supports a customer tax_exempt: "reverse" setting. Set it only after your tax assessment establishes that reverse charge applies to the relevant supplies. A valid VAT number alone is not sufficient. Keep registration evidence in your own billing records and reassess the setting when customer details or the supplied services change. Configure Stripe Tax or your manual rates for the treatment you have established; an API failure must not silently choose a rate.

Paddle and Lemon Squeezy

With a merchant of record, follow the provider's tax and customer-evidence workflow. An independent validation record can support your customer data, but does not override the provider's assessment.

Custom billing

Keep validation, evidence storage and tax assessment as explicit steps. Retrying an unavailable check should update the evidence without silently rewriting issued invoices. Follow the reverse charge invoice requirements guide for invoice fields and corrections.

Get started

Avatcado's free tier includes 500 validations per month. The API response format is consistent across plans.

Start validating for free →