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Selling to business customers in the EU requires proper VAT handling. These recommendations cover VAT number validation and reverse charge configuration in Shopify.

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VAT number validation

Shopify can validate customer VAT numbers at checkout. When a valid EU VAT number is provided, the order can be tax-exempt under the reverse charge mechanism.
Enable VAT number collection and validation in your checkout. This automates tax exemption for eligible B2B orders within the EU.
Shopify verifies VAT numbers against the EU’s VIES (VAT Information Exchange System) database in real-time during checkout. See Collecting VAT numbers in the Shopify documentation.

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Reverse charge mechanism

When selling B2B within the EU (but across borders), the reverse charge mechanism means the buyer — not the seller — accounts for VAT. This requires:
  1. A valid VAT number from the buyer
  2. The buyer and seller are in different EU countries
  3. The goods are shipped to the buyer’s country
With VAT number validation enabled, Shopify automatically applies tax exemption when these conditions are met.
The reverse charge mechanism only applies to cross-border B2B sales within the EU. Domestic B2B sales still require you to charge local VAT.

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Limitations

Shopify’s B2B-specific checkout (available on Shopify Plus) does not currently support VAT number validation at checkout. VAT validation is only available through the standard checkout flow.
If you use Shopify’s dedicated B2B checkout, VAT number validation is not yet available. Use the standard checkout with VAT number collection enabled instead.
See Shopify changelog: Tax number validation at checkout for the latest updates on this feature.

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VIES verification

The VIES database is the official EU system for verifying VAT numbers. Shopify checks this database automatically when customers enter a VAT number at checkout. You can also verify VAT numbers manually. See VIES VAT number validation on the European Commission website.

Tax and VAT

Automated VAT calculation and EU compliance

Shipping within the EU

VAT, customs, and regulations for intra-EU shipments