Subscription canceled due to EU VAT compliance

Modified on: Fri, 4 Aug, 2023 at 2:10 PM


Error - "This customer's location couldn't be validated as required for compliance with the new EU VAT 2015 rules".



According to EU VAT Rules, Chargebee carries out location validation to ensure that the right location is used to calculate the right tax rate for customers.


Location validation is carried when adding a card for the first time and when a card is updated, it is validated against the billing address the customer is provided.

Validation is done against the below data. The customer’s billing address country should be the same as either:

  • The location (country) of the IP address that is used at the time.

  • The country the customer Credit Card's BIN (Bank Identification Number) is allocated.



Solution:

 

To reactivate subscriptions that have been canceled, you could do one of the following:-

  1. If there's a mismatch in the Credit card BIN -  the customer’s card information will need to be updated again, ensuring they are using a card from the same country as their billing address. And then the subscription can be reactivated. Here’s more on updating the card for a customer.

  2. If there is an IP mismatch - The IP address can be updated by APIs using the Update a subscription API using the parameter “card[ip_address]”. After the IP address is updated, you can call the "re-activate subscription" API.

  3. You would need to use Chargebee's Update a Card Payment Source API and pass the correct IP address using the parameter card [ip_address]. The card IP address HAS TO BELONG TO the customer's billing or shipping address.




Related articles and documentation:





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