Apply the correct VAT Rate to your customer in Stripe Checkout

countries.ts

export const COUNTRIES = [
  { name: 'United States', code: 'US' },
  // only EU countries included here, checkout this gist for a full country list: https://gist.github.com/keeguon/2310008
  //Be careful:  I don't keep this list updated, it's from 17. January 2021
  { name: 'Austria', code: 'AT', isEU: true, vatPercentage: 20 },
  { name: 'Belgium', code: 'BE', isEU: true, vatPercentage: 21 },
  { name: 'Bulgaria', code: 'BG', isEU: true, vatPercentage: 20 },
  { name: 'Croatia', code: 'HR', isEU: true, vatPercentage: 25 },
  { name: 'Cyprus', code: 'CY', isEU: true, vatPercentage: 19 },
  { name: 'Czech Republic', code: 'CZ', isEU: true, vatPercentage: 21 },
  { name: 'Denmark', code: 'DK', isEU: true, vatPercentage: 25 },
  { name: 'Estonia', code: 'EE', isEU: true, vatPercentage: 20 },
  { name: 'Finland', code: 'FI', isEU: true, vatPercentage: 24 },
  { name: 'France', code: 'FR', isEU: true, vatPercentage: 20 },
  { name: 'Germany', code: 'DE', isEU: true, vatPercentage: 19 },
  { name: 'Greece', code: 'GR', isEU: true, vatPercentage: 24 },
  { name: 'Hungary', code: 'HU', isEU: true, vatPercentage: 27 },
  { name: 'Ireland', code: 'IE', isEU: true, vatPercentage: 23 },
  { name: 'Italy', code: 'IT', isEU: true, vatPercentage: 22 },
  { name: 'Latvia', code: 'LV', isEU: true, vatPercentage: 21 },
  { name: 'Lithuania', code: 'LT', isEU: true, vatPercentage: 21 },
  { name: 'Luxembourg', code: 'LU', isEU: true, vatPercentage: 17 },
  { name: 'Malta', code: 'MT', isEU: true, vatPercentage: 18 },
  { name: 'Netherlands', code: 'NL', isEU: true, vatPercentage: 21 },
  { name: 'Poland', code: 'PL', isEU: true, vatPercentage: 23 },
  { name: 'Portugal', code: 'PT', isEU: true, vatPercentage: 23 },
  { name: 'Romania', code: 'RO', isEU: true, vatPercentage: 19 },
  { name: 'Slovakia', code: 'SK', isEU: true, vatPercentage: 20 },
  { name: 'Slovenia', code: 'SI', isEU: true, vatPercentage: 22 },
  { name: 'Spain', code: 'ES', isEU: true, vatPercentage: 21 },
  { name: 'Sweden', code: 'SE', isEU: true, vatPercentage: 25 },
];

create-stripe-checkout.ts

export async function createStripeCheckoutSession(stripePriceId: string, user: UserModel) {
  const userCountry = COUNTRIES.find((c) => c.code === user.billingCountryCode);
  const isEUCustomer = !!userCountry.isEU;
  let taxRate: TaxRateModel;
  if (isEUCustomer) {
    taxRate = await TaxRateModel.query().findOne({ countryCode: userCountry.code });
  }

  try {
    const session = await stripe.checkout.sessions.create({
      mode: 'subscription',
      customer: user.stripeCustomerId,
      payment_method_types: ['card'],
      line_items: [
        {
          price: stripePriceId,
          quantity: 1,
          tax_rates: taxRate ? [taxRate.stripeId] : undefined,
        },
      ],
      allow_promotion_codes: true,
      // {CHECKOUT_SESSION_ID} is a string literal; do not change it!
      // the actual Session ID is returned in the query parameter when your customer
      // is redirected to the success page.
      success_url: `${applicationUrl}stripe/success?session_id={CHECKOUT_SESSION_ID}`,
      cancel_url: `${applicationUrl}profile/${user.userName}/billing`,
    });

    return session.id;
  } catch (e) {
    throw new Error(e.message);
  }
}

TaxRateModel.ts

import { Model } from 'objection';

export default class TaxRateModel extends Model {
  countryCode!: string;
  stripeId!: string;

  static tableName = 'tax_rate';
}

update-tax-rates.ts

export async function createOrUpdateVatTaxRates() {
  const EU_COUNTRIES = COUNTRIES.filter((c) => !!c.isEU);
  for (const country of EU_COUNTRIES) {
    const existingTaxRate = await TaxRateModel.query().findOne({ countryCode: country.code });
    if (!existingTaxRate || existingTaxRate.vatPercentage !== country.vatPercentage) {
      getLogger().info({}, 'TaxRate changed for country: ' + country.code);

      const taxRate = await stripe.taxRates.create({
        display_name: 'VAT ' + country.name,
        inclusive: false,
        percentage: country.vatPercentage,
      });

      if (existingTaxRate) {
        await stripe.taxRates.update(existingTaxRate.stripeId, { active: false });
        await existingTaxRate.$query().patch({ stripeId: taxRate.id, vatPercentage: country.vatPercentage });
      } else {
        await TaxRateModel.query()
          .insert({
            countryCode: country.code,
            stripeId: taxRate.id,
            vatPercentage: country.vatPercentage,
          })
          .returning('*');
      }
    }
  }
}

upsert-stripe-customer.ts

function mapUserToStripeCustomer(user: UserModel, isEUCustomer: boolean): Stripe.CustomerUpdateParams {
  // our business is located in Austria, so we have to check if the customer is also from Austria
  const COUNTRY_CODE_AUSTRIA = 'AT';
  let taxExempt: Stripe.CustomerUpdateParams.TaxExempt;
  if (isEUCustomer) {
    if (user.billingVatNumber && user.billingCountryCode !== COUNTRY_CODE_AUSTRIA) {
      // if it is a country in the EU and not from austria, reverse charge applies
      taxExempt = 'reverse';
    } else {
      // b2c in EU or business from Austria, VAT applies normally
      taxExempt = 'none';
    }
  } else {
    // customer from outside the EU, no VAT applies
    taxExempt = 'exempt';
  }

  return {
    email: user.billingEmail,
    name: user.billingName,
    address: {
      city: user.billingCity,
      country: user.billingCountryCode,
      line1: user.billingStreet,
      postal_code: user.billingZip,
    },
    tax_exempt: taxExempt,
  };
}

export async function upsertStripeCustomer(user: UserModel, updatedVatNumber: boolean) {
  const userCountry = COUNTRIES.find((c) => c.code === user.billingCountryCode);
  const isEUCustomer = !!userCountry?.isEU;
  const baseData = mapUserToStripeCustomer(user, isEUCustomer);

  if (user.stripeCustomerId) {
    if (isEUCustomer && updatedVatNumber && user.billingVatNumber) {
      await stripe.customers.createTaxId(user.stripeCustomerId, { type: 'eu_vat', value: user.billingVatNumber });
    }

    await stripe.customers.update(user.stripeCustomerId, baseData);

    return user.stripeCustomerId;
  } else {
    const customer = await stripe.customers.create({
      ...baseData,
      tax_id_data: isEUCustomer && user.billingVatNumber ? [{ type: 'eu_vat', value: user.billingVatNumber }] : undefined,
      metadata: {
        trueqId: user.id,
      },
    });

    const success = (await user.$query().patch({ stripeCustomerId: customer.id })) > 0;
    if (!success) {
      throw new Error(`Error updating the stripe customer id (${customer.id}) of the user with id ${user.id}`);
    }

    return customer.id;
  }
}