EU VAT

[ChrisTERiS]

Hello,

I want to add Commerce in my license but I want to know if it supports EU VAT calculation, something that Nexus didn't supported that's why I never used it.

Thank you

Chris

Edit: Follow up. I registered for a demo mostly to check Commerce and I seen that EU VAT is not supported. Sure you can set a Tax and name it EU VAT and then set tax rate per country but this is not the way that EU VAT works. To make understandable how it works, let's use as example an online store located in UK. 

1.- If the client is out of EU no need to pay VAT

2.- If client is located in EU (but not in UK):

1. If he has a valid EU VAT id he does not pays VAT
2. If he don't he must pay, the VAT (his country VAT rate.

3.- If the client is located in UK where is the shop's base, with or without VAT id he must pays VAT.

For what many shop owners have been confused is the saying "My Shop is outside EU, so no need for this". That's totally wrong. As long as they deal with EU clients, even if the shop is locating in Africa they must collect VAT. If not, and according EU instructions, 3 years after this law (this means from 1st January 2018), all these sites should be blocked in all EU nameservers and will not be accessible.

 

[MarianHärtel]

It does not. There is a plug-in being worked on, but not sure if and when it reaches the market place. 

I am helping the developer with  the legal side. But you Show perfectly that it should be in there native, including correct invoicing and archiving these.

[kar3n2]

Im on the cusp of adding downloads into my forums as I've got several people would like to sell their digital products but there is no way I can see it can be set up to work for this EU VAT MESS ...

I would prefer to block the EU countries totally but even this is supposedly illegal... and if I promote the products onto twitter or FB, so that guests not logged in can buy,  then there is no way to prevent people from sharing and potentially wanting to make a purchase ..

[kar3n2]

On 12/29/2017 at 7:55 PM, MarianHärtel said:

It does not. There is a plug-in being worked on, but not sure if and when it reaches the market place. 

I am helping the developer with  the legal side. But you Show perfectly that it should be in there native, including correct invoicing and archiving these.

any news on the plugin? 

[PhilippDE]

For digital products you will need to use the tax of the individual country. For physical products it is the way you described. The EU is thinking about to make this for physical products as way. It has not decided yet, but I think this may start in 2019. 

[kar3n2]

for me I think the solution is to NOT add the taxes inside the commerce but when they click though to Paypal the taxes can be added in there. This way Paypal collects the necessary information ie the billing address and country of residence. But I need to know if this would work before I purchase the downloads

[opentype]

I doubt it. 

[ChrisTERiS]

On 17/1/2018 at 2:54 PM, kar3n2 said:

for me I think the solution is to NOT add the taxes inside the commerce but when they click though to Paypal the taxes can be added in there. This way Paypal collects the necessary information ie the billing address and country of residence. But I need to know if this would work before I purchase the downloads

Even if your idea is correct, is not exactly the best way, for a simple reason. PayPal collects VAT from all clients ignoring the the fact that clienst with a valid VAT id must exclude from paying it.

On 16/1/2018 at 11:04 PM, PhilippDE said:

For digital products you will need to use the tax of the individual country. For physical products it is the way you described. The EU is thinking about to make this for physical products as way. It has not decided yet, but I think this may start in 2019. 

Only if the client does not has a valid VAT id.

[opentype]

All depends on what you are selling to whom. If you sell MP3s to to consumers for example, VAT IDs wouldn’t even be an issue. B2B or mixed B2B/B2C shops have the need to base pricing calculation on VAT ID and/or business/consumer status. 

[kar3n2]

I'd be selling the digital downloads to consumers only. ( initially at least as they will be mp3 music files and its not likely a business buys them rather just the fans who are consumers)  So at least that's one part of the headache gone.

VAT in EU countries can be set in commerce and I presume then we have to rely on the consumer to act honestly and to click the dropdown box for his own EU country hence pay his correct VAT on the product.

In Paypal we can set the Vat rates for the EU countries also.  And I'm sure Paypal recognizes where the customer is from either from his current Paypal account or credit card details. Then that customer is presented with the correct VAT rate per his country.

SO.. the choice has to be made.... either set up the VAT rates in Paypal  OR set them up in Commerce.  I'm 100% sure you shouldn't set them up in both at the same time.

PLUS  even if you are based in US or any other country you ALL have to account for EU vat if you are selling to EU countries.

Found this maybe it helps a bit re US selling digital products  " For instance, if you’re selling electronically supplied services into the European Union, you are required to register, collect, and remit VAT on your sales. The EU has enacted rules to make this obligation simpler, but many businesses selling electronically supplied services are unaware of this requirement and are exposed to compliance risks. "

https://taxify.co/2016/07/12/collecting-vat-digital-sales-europe/

 

With respects to IPS I presume everyone who purchases the forums etc is a business... and I presume marketplace downloads are for businesses as well.

It's those darn digital sales to EU consumers.. like music files, images, e-books etc that is where the challenge lies.

 

If they gonna do physical products next also ... uhhhooooohhhh  :-(

 

 

[kar3n2]

3 hours ago, ChrisTERiS said:

Even if your idea is correct, is not exactly the best way, for a simple reason. PayPal collects VAT from all clients ignoring the the fact that clienst with a valid VAT id must exclude from paying it.

Only if the client does not has a valid VAT id.

That's right. IF you have mixed clients  B2C and B2B then there is a problem 

[ChrisTERiS]

25 minutes ago, kar3n2 said:

That's right. IF you have mixed clients  B2C and B2B then there is a problem 

What I can't understand is why they don't add this feature, which is very easy to implement. I've added it in my Free eCommerce plugin for vBulletin. It's just an API call to VIES

[kar3n2]

Just also realised that the donations is part of the commerce app so if I set VAT rates for different countries for my digital downloads it will charge VAT on donations too.

Thats it then... I'll use donations elsewhere on the wordpress part of my site ( with a menu link) and not via the commerce app!

[kar3n2]

7 minutes ago, ChrisTERiS said:

What I can't understand is why they don't add this feature, which is very easy to implement. I've added it in my Free eCommerce plugin for vBulletin. It's just an API call to VIES

cant you make a plugin for IPS? 

[ChrisTERiS]

11 hours ago, kar3n2 said:

cant you make a plugin for IPS? 

Sorry no, as IPS has different style of code than vBulletin, even if both are based on PHP. That's why I also stop coding for vBulletin and I'm coding standard PHP code.

But if any IPS Plugin developer wants to do it, there is no copyright restriction from my side. He can get the code, functions, templates from my plugin and change it to work with IPS.

 

[ChrisTERiS]

11 hours ago, kar3n2 said:

Just also realised that the donations is part of the commerce app so if I set VAT rates for different countries for my digital downloads it will charge VAT on donations too.

Correct. But sorry to say, here is not a mistaken approach of IPS. Don't know the law terms in other countries but for EU any income (including donations) is taxable. There is a complicated procedure to move the tax amount to seller, but the initial payment is taxable,

[kar3n2]

5 hours ago, ChrisTERiS said:

Correct. But sorry to say, here is not a mistaken approach of IPS. Don't know the law terms in other countries but for EU any income (including donations) is taxable. There is a complicated procedure to move the tax amount to seller, but the initial payment is taxable,

If its reward based fundraising/donations then VAT is payable and would be subject to EU Vat laws too.  IF its a donation with no reward then its outside the scope of VAT. Therefore I will be removing my forum donations because they are not reward based but commerce will add the VAT according to its settings which Ill need for membership fees and digital product sales

https://www.vatlive.com/vat-news/eu-confirms-vat-on-crowdfunding/

[ChrisTERiS]

1 hour ago, kar3n2 said:

If its reward based fundraising/donations then VAT is payable and would be subject to EU Vat laws too.  IF its a donation with no reward then its outside the scope of VAT. Therefore I will be removing my forum donations because they are not reward based but commerce will add the VAT according to its settings which Ill need for membership fees and digital product sales

https://www.vatlive.com/vat-news/eu-confirms-vat-on-crowdfunding/

Without any mean to underestimate the value of information given in 3nd party websites, I do believe that the best place is the official EU website (department for VAT)

https://ec.europa.eu/taxation_customs/business/vat_en

Also pay attention to an important difference between Directive and Regulation (in case that you'll see any of them in any terms)

http://www.enhesa.com/blog/eu-directive-vs-eu-regulation-whats-difference?language=en