Magento 2 wrong VAT for EU B2B customers – tax configuration

A B2B shop was charging 23% VAT to customers from Germany and France who provided EU VAT numbers. Under the reverse charge principle, VAT should be 0% for EU businesses with a VAT number. The problem generated customer complaints and tax risk. Fix time: 8 hours.

Symptoms

• EU customers with VAT number pay full 23% VAT
• Invoices issued with incorrect VAT rate
• The “VAT number” field in checkout is visible but does not affect price

Configuration

# For B2B reverse charge you need a Customer Tax Class
# Stores > Tax > Customer Tax Classes: add "EU B2B Customer"
# Stores > Tax > Tax Rules:
#   - Customer Tax Class: EU B2B Customer
#   - Product Tax Class: Taxable Goods
#   - Tax Rate: 0% EU
#   - Priority: 0 (higher than standard VAT)

<?php
// Observer that changes tax class after EU VAT number validation
class VatValidationObserver implements \Magento\Framework\Event\ObserverInterface
{
    public function execute(\Magento\Framework\Event\Observer $observer): void
    {
        $customer  = $observer->getCustomer();
        $vatNumber = $customer->getTaxvat();

        if ($this->isValidEuVat($vatNumber)) {
            $customer->setGroupId($this->getB2bGroupId());
            $customer->setTaxClassId($this->getEuB2bTaxClassId());
        }
    }

    private function isValidEuVat(string $vatNumber): bool
    {
        $client      = new \SoapClient('https://ec.europa.eu/taxation_customs/vies/checkVatService.wsdl');
        $countryCode = substr($vatNumber, 0, 2);
        $number      = substr($vatNumber, 2);

        try {
            $result = $client->checkVat(['countryCode' => $countryCode, 'vatNumber' => $number]);
            return $result->valid;
        } catch (\Exception $e) {
            return false;
        }
    }
}

Takeaways

Reverse charge for EU B2B requires VAT number validation via VIES API, a separate tax class for B2B customers and an appropriate tax rule with 0% VAT. Always consult tax configuration with an accountant.