Setting up EU value-added tax (VAT)

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If you’re a VAT-registered business based in European Union, you’re most likely required to pay value-added tax (VAT). Online store lets you set up your store according to the EU VAT rules:

  • Charge VAT to your customers
  • Apply reverse charge when selling to another EU VAT registered business
  • Display your VAT ID number on invoices

In this article:

Charge VAT from your customers

To make your store automatically charge the proper VAT amount to your customers, enable the Automatic tax rates in your Control Panel → Settings → Taxes.

Store calculates the tax rates automatically based on the store and customer's location and includes VAT into product prices. At checkout, the customer will be charged a proper VAT rate according to the country and regional tax rules.

Online store stays up to date on the current VAT rates, so when the rates are changed, your store will automatically use the new rates with no actions required from your side.

Only standard VAT rates are supported by the automatic calculation scheme at the moment. If you are required to charge reduced rate or have zero-rated products in your store, we recommend disabling the automatic rates and setting up manual tax rates. See how to do that in this article: Manual Tax Setup

Enable VAT reverse charge

If you sell goods to another business and these goods are sent to another EU country, you do not charge VAT. The VAT rules also require you to save a customer's VAT number and make sure it’s a valid EU VAT number.

To enable VAT to reverse charge for B2B sales in your store, go to your Control Panel → Settings → Taxes, scroll down to Settings and enable the Ask for buyers' VAT ID at checkout option:

vat_id__1_.png

It will add the VAT ID number field at checkout and apply VAT reverse charge when necessary. The customer's VAT number will also be saved in the order details for your future reference.

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Display the VAT ID on the order invoice

Show your VAT ID on the invoice

Please find the instruction here: Adding a business registration number to the invoice

Show buyer's VAT ID on the invoice

The VAT number a customer submits at checkout is printed on the invoice as well as in the order details in your Control Panel.

However, if you ever customized your invoice template, it doesn't get to it automatically — in this case you should add it to the invoice template manually. To do that, go to your Control Panel → Settings → Invoice, click Edit Template and add this code:

<#if order.customerTaxId?has_content>
<p>${textLabels.taxId} ${order.customerTaxId}</p>
</#if>

Show buyer's VAT ID in admin email notifications

If the option Ask for buyers' VAT ID at checkout is enabled and order details have the customer's VAT ID number, the VAT ID will be shown in the admin email notifications of the order automatically.

In some cases, if you ever customized your email template, the buyer's VAT ID number in the admin notifications might be missing. You will need to add a corresponding piece of code to the notification template manually. Go to your Control Panel → Settings → Mail, scroll to Admin Notifications, click Edit next to the New Order Placed notification. Scroll down to "Billing info" and add this code:

<#if order.customerTaxId?has_content>
<tr>
<td align="left" valign="top" style="font-family: Arial,sans-serif;font-size: 14px;line-height: 18px;color: #333333;padding-top: 5px;">
<b>VAT ID: ${order.customerTaxId}</b>
</td>
</tr>
</#if>