Use case summary
Turn VAT on in your commerce account, choose the currencies and the category your goods or services fall into, and the rate that applies to the customer's country is added at payment. The invoice is generated with VAT already in it, before processing fees are calculated. Result: VAT is settled at the moment of payment rather than corrected afterward.
- Finance & CFO
Why VAT gets decided after the payment instead of during it
When you sell across the EU, the rate you charge depends on where your customer is, not where you are. 27 countries, each with a standard rate and reduced rates for particular categories of goods and services.
Most teams handle that outside the payment flow. A rate table sits in the billing system or a spreadsheet; someone updates it when a country changes a rate, and checkout charges an amount that was worked out before anyone knew which country the customer was in.
The errors show up late. An invoice issued at the wrong rate has to be corrected afterward, and the shortfall comes out of your margin because the customer has already paid the amount they agreed to.
How to apply VAT at the moment of payment
VAT is configured once per commerce account, the environment that holds your payment settings, and applied on every payment that qualifies.
- 1
Turn VAT on in the Taxes section
VAT is enabled in the Taxes section of your commerce account settings. No development work is involved.
- 2
Choose the currencies and the category
Select the currencies VAT applies to and the category your goods or services fall into. When no category is specified, the standard rate is used for the calculation.
- 3
Work from a maintained rate table
The platform stores current VAT rates for EU countries, including standard rates and category-specific rates, so your team doesn't have to maintain that table.
- 4
Let the customer's country decide the rate
At payment, the customer's IP address and country are analyzed. If the country is on the VAT list, the tax is applied at that country's rate.
- 5
Issue an invoice with VAT already in it
The invoice is generated with the VAT amount included, and it is added before processing fees are calculated, so the fee base is correct from the start.
- 6
Show the customer one total
By default, the hosted payment page displays the total amount including VAT, without breaking out the percentage for the customer.
What you get
VAT is decided at the moment of payment, by the same system that takes the money.
Correct rates without a spreadsheet to maintain
Rates for EU countries are held and updated in the platform, so nobody on your team is tracking rate changes across twenty-seven jurisdictions or updating a table when one moves.
Invoices that do not need correcting
The VAT amount is on the invoice when it is issued, which removes the cycle of finding the wrong rate later, reissuing the document, and absorbing the difference on a payment the customer has already made.
A fee base that is right the first time
Because VAT is added before processing fees are calculated, your fee figures and your reconciliation start from the correct amount rather than one that has to be restated.
One setup across currencies and markets
The same configuration covers every currency and country you enabled, so opening a new EU market does not mean building the VAT handling for it separately.
Five years of EU e-commerce VAT rules, €125 billion declared through one-stop shops
The European Commission reported in September 2026 that businesses have declared more than €125 billion in VAT through the One Stop Shop and Import One Stop Shop schemes in the five years since the EU's e-commerce VAT rules took effect. Those rules replaced national thresholds with a single EU-wide threshold of €10,000 a year for cross-border B2C sales. Above it, the rate of the customer's country applies, and the seller either registers in each country or reports through the OSS. Either way, the rate has to be correct at the moment of the sale.