How does VAT work for EU customers?

Last updated: 3 months ago

Cathopic complies with EU VAT regulations for all customers located in European Union member states.

Standard VAT rate

For EU customers:

  • A standard VAT rate of 21% is applied to all subscriptions

  • VAT is automatically calculated and added to your subscription price

  • The system initially detects your location through your IP address

  • The country set in your profile settings takes precedence for VAT calculation

VAT exemption for businesses

If you are an EU business with a valid VAT ID number, you can be exempt from paying VAT through the reverse charge mechanism:

How it works:

  • Enter your VAT ID during the checkout process

  • The system validates your VAT ID in real-time through the official EU VIES service (VAT Information Exchange System)

  • If valid, VAT is automatically removed from your order

  • You will be responsible for declaring and paying the VAT in your own country

VAT ID format:

  • Include country code: ES12345678B, DE123456789, FR12345678901

  • Or enter just the number (system will add ES as default): 12345678B

  • The system accepts VAT IDs from all 27 EU member states

Validation process:

  1. At checkout, locate the "VAT ID" field

  2. Enter your VAT identification number

  3. Click the validate button (checkmark icon)

  4. Wait for validation (typically 2-5 seconds)

  5. If valid, you'll see confirmation and VAT will be removed from your total

  6. If invalid, you'll receive an error message and VAT will remain

What appears on your invoice

For customers paying with VAT (no VAT ID provided):

  • Subscription price (excluding VAT)

  • VAT amount (21%)

  • Total amount charged (including VAT)

For businesses using VAT ID (reverse charge):

  • Subscription price

  • Your VAT ID number

  • Note indicating reverse charge applies

  • No VAT amount charged

Important notes about VAT ID validation

Requirements for VAT exemption:

  • Your VAT ID must be currently registered and active in the EU VIES system

  • The VAT ID must belong to a business entity (not individuals)

  • You must be located in an EU member state (excluding your home country's VAT rules may vary)

If validation fails:

  • Verify your VAT ID is correct and includes the country code

  • Check that your VAT ID is registered and active

  • The EU VIES service may occasionally be unavailable - try again in a few minutes

  • Contact your tax authority if issues persist

Updating your location for VAT

To ensure correct VAT application:

  1. Go to Settings → Profile

  2. Update your country to your actual location

  3. Save your changes

Your country setting determines whether VAT is applied to your subscription.

VAT on renewals

If you've provided a valid VAT ID:

  • The VAT exemption applies to all future subscription renewals

  • Your VAT ID is stored and automatically applied

  • You don't need to re-enter it for each renewal

  • You can update or remove your VAT ID anytime in your billing information

For any VAT-related questions or issues with validation, please contact our support team.

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