Pro Forms and the new EU VAT rules

  • Hi there,

    I’ve been successfully using S2Member for a while now and really like its workflow and features. However, from 1.1.2015 there are some VAT regulation changes inside the EU and we’ll need to change the checkout process to comply. We use PayPal and Stripe pro forms and basically what we would need is a way to collect billing address and check the entered country against the customers IP so the proper VAT could be charged.

    At the moment VAT can be calculated, but customers can enter whatever they like in the “Billing Address” fields while there’s no verification and so the system can be tricked easily not to pay VAT.

    According to some search result I can tell that PayPal and Stripe can be forced to collect address and the address fields can be added to the form, but then again the users would need to enter address twice and basically still enter whatever they want.

    Is there a way to implement that kind of IP against address check and make it possible to collect the address without making the customers enter it twice? Are you guys maybe already working on some kind of extension?

    Any help would be nice!

    https://www.ads-software.com/plugins/s2member/

Viewing 10 replies - 1 through 10 (of 10 total)

  • @shegy,

    I am not one of the s2Member devs, but I very much doubt that any such extension is planned. Nor will most other membership plugins be producing such an extension.

    Why not? Well, the key is in your phrase “there’s no verification”. Actually, it’s impossible to verify that the IP address is accurate. There are all sorts of ways for users to be registered with an IP address for the “wrong” country — and most of these reasons are perfectly legitimate.

    One thing I should point out, though, is that if Stripe (and, I believe, PayPal too) is configured to demand a billing address, it has to match the registered address for the credit card being used. So that’s already verifiable.

    Nevertheless, the best anyone will be able to do is to (a) collect the data, and (b) charge the appropriate amounts based on the data you have. You might find this site helpful, though you won’t be able to use PayPal if you want to use it: just Stripe.

    Thread Starter shegy

    (@shegy)

    Hey KTS915, thanks for a quick response.

    Yes, I’m aware that verifying IP is not 100% possible. However, most users are not going to try to trick the system that way. They will mostly try to input a VAT-less country (USA for example) to avoid being charged VAT. I guess 10-15 % of the customers does that with the current system. The goal would be to make it just a bit harder as it is now:-).

    There is an extension for Easy Digital Downloads that does that in a quite nice way. Take a look here https://www.lyquidity.com/wpstore/2013/10/vat-for-edd/. However, EDD don’t really fit the way we built our system and if not really necessary we wouldn’t leave S2Member.

    I guess that’s true what you said about Stripe (for PayPal I’m not sure) that it has to match the registered address, but the address sent (custom field),as far as I know, is not the one the people enter when calculating Tax. That means I should check for each one if they paid appropriate VAT.

    Thanks for the site you sent. It is cool, but PayPal is just to widely used payment method and in fact our main gateway.

    Anyway, it would be nice to have such a sleek solution for S2Member like the one for EDD. If you have any other ideas on how to improve the current system don’t hesitate to write:-)

    shegy,

    Yes, I have seen the EDD add-on. That’s why I said “most other membership plugins”! But it just isn’t necessary.

    What any tax authorities will require from you is that your accounts seem genuine (all auditing involves sampling anyway, not checking every single item) and are internally consistent. They aren’t going to be checking whether a particular IP address exists or not. In any event, I’m sure they recognize that IP tracking is imperfect.

    AS I said, most IP “inaccuracies” are perfectly legitimate. (No tax authority is going to hold you liable for someone else’s fraud anyway, unless you colluded in it.) IP “inaccuracies” can be caused, for example, simply by the location of an internet service provider. If that provider has a base in a different country, then the IP will be “wrong”. Or if the computer was purchased in a different country, that can sometimes cause a similar result. I’m sure you’ve seen all this, and more, with Stat Tracking plugins.

    So the question is: what can a plugin extension actually offer? It can’t claim to capture “accurate” IP addresses, because it would be subject to the same constraints as any other stat tracking software. It could ask the user to input his or her address again — say, one for billing address, and one for delivery — but s2Member forms already enable you to do that.

    So I just can’t see what a plugin extension could offer, unless, like Quaderno, it was going to calculate the VAT for every country for you. But that’s not really membership plugin territory.

    Thread Starter shegy

    (@shegy)

    KTS915,

    I get your point of view and agree that no authority can hold anyone liable if the IP doesn’t match the real country.

    Anyway, I need to think of the user experience side of things as well. It seems quite strange to ask for the address twice and I’m not even selling a product that needs to be shipped.

    Is there a way around it?
    Ideal solution would be to use the billing address that would include street address, zip and country to calculate VAT and the same address to be passed to PayPal and Stripe. Is that possible?

    The other thing; if I enable ns=”2″ will it pass the address to Stripe as well or is it just a PayPal thing?

    S2Member is capable of calculating VAT for every country and it comes very close to being ideal solution, but those small checkout flow issues would need to be addressed to get there.

    I understand your point about asking for the address twice when you aren’t selling physical goods. I was just explaining that, even in such a situation, s2Member already provides for that functionality (and would essentially be doing what e.g. Amazon does).

    For Stripe (which is what I use) you need to go into your Stripe account and set it to ask for the address. It does not capture it by default. I can’t remember about PayPal, but I thought it asked for an address by default.

    I can’t answer coding questions, though. I’m just a user of the plugin, not a dev, and I don’t code.

    Thread Starter shegy

    (@shegy)

    KTS915,

    thanks for your time!

    I’ll try to post another question just regarding customizing checkout process in another thread. Hope to get some of the developers to chip in:-)

    shegy,

    Since you have the Pro version, you could contact Pro support at s2member.com/contact

    Any news on this, This whole VAT issue is really troubling – especially the need now to send invoices for any transaction!!!

    I found vatapi.com – which seems to also allow for paypal (besides Taxamo) and being a lot cheaper than taxamo – so that would be a great solution to implement..

    Really troubling finding not much info. If everything goes wrong I will need to move to EDD or WooCommerce – both have plugins to handle the new EU VAT laws…

    According to the EU officials the IP address *is* necessary. I’d be highly interested in the answer to the original question from @shegy, but (sorry for that) from a source that *really* knows the answer, and not from somebody who is just guessing. What has @s2member to say?

    Ha, ha!

    No-one said that the IP address was not necessary. There was discussion about its accuracy. That’s quite different.

    But if you want the latest from s2member, you can get a status update here: https://github.com/websharks/s2member/issues/395

    You could even then tell them what you are looking for, though, since I assume you have the Pro version, you will no doubt already have contacted them direct through Pro support and received their official response.

Viewing 10 replies - 1 through 10 (of 10 total)
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