Gift Cards and new EU VAT regulations

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Excursionist
11 0 5

@Victor Is there an update on this matter?

 

 

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New Member
2 0 1

@Victor Same question here. I got offered the Gift Card possibility today (because Shopify wants to help their shop owners, considering COVID-19..) 
But tell me.. How can there still be no solution for this?! This problem has been there for all EU shop owners for more than a year now..

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Excursionist
11 0 5
Same here @Jochem73.

A lot of my customers are asking to buy gift cards right now, so they can help my company out with the coronavirus and its impact on smaller businesses.

Currently I'm missing out on a lot of sales because Shopify is too lazy to actually put in the effort to be compliant with EU laws...

Honestly it's getting to the point where I'm seriously considering changing ecommerce platforms. But as a Dutch company with a mainly US client base, it's a pain in the ass.
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Shopify Partner
4 0 0
I agree this should be included but I've been using Rise: gift card & loyalty app and it ticks all the Tax boxes and is just a nicer delivery system overall, give it a go.
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Shopify Staff
Shopify Staff
274 33 73

Hi @PetraS & @Jochem73,

 

I passed on the feedback given here by different merchants to our internal team reviewing this measure, as per my last post, but do not have an update to provide at this time. It would seem that @Stefan_VR has found some luck with the Rise: Gift Cards & Loyalty app so I would recommend giving that a try if you're wanting to change the way taxes are charged for gift cards,

 

Kind regards,

 

Victor | Shopify Social Care

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New Member
2 0 1

Dear Victor,

thank you for passing on the feedback.. But since this problem has never been adressed up until now, I don't expect it to be adressed in the near future.
And the app you're referring to is a minimal monthly charge of $19.99.. So thank you Shopify for helping me out with your temporarily free use of the gift card option. Don't take this personal, but I'll forget about it all together.

Kind regards, Jochem

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Excursionist
11 0 5

@Victor as @Jochem73 states, that app has a cost of almost $20,- for a feature shopify is pretending to be offering to all merchants for free during the Coronavirus outbreak. Not exactly a fair thing to make all EU sellers use an expensive app for 1 simple feature that is actually mandatory by law for sellers in an area that big. It's just sad that the only repsonse we're getting as vendors is basically 'meh, we don't care about the European market enough to cater to them properly, but we'll happily charge you for everything'.

 

Sadly, this is yet another thing in which Shopify is utterly failing their client base who isn't in the US or Canada. 

 

Cheers for 'helping' us EU vendors through a crisis. Not.

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Excursionist
11 0 5

@Victor I've also checked the Rise app, it does allow for VAT (tax) to be charged but it WILL also charge tax when the client redeems the gift card. Which means taxes are charged twice over the same sum. 

 

In other words: Rise does nothing to solve the issue.

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Shopify Partner
4 0 0
This is true but your VAT is not paid out twice and the voucher value remains unchanged.
You are liable to pay the VAT portion on the card sold but retain the VAT on the product when paid for with the voucher so this simply shifts the VAT liability point. In this way you simply deduct all VAT from sales paid for by gift cards from your total VAT liability. Again, I agree with all the comments that Shopify should include this functionality.
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Shopify Partner
6 0 4

I'll chuck in my tuppenceworth here - I wholeheartedly agree with all the comments by my fellow EU partners. Having lost the best part of a morning down a VAT rabbithole, I can confirm that they are correct, and that VAT must be charged on the voucher when sold. If a client has a company accountant then it's theoretically possible to throw this over the fence at them and let them sort out who paid for what and with what, and they can sort out the VAT liability, but this is not currently shining Shopify in a kindly light: by not being (i) flexible and (ii) expedient in these matter, it appears that you are a platform willing to take a merchant's money but not provide the service one would expect of a market leader.

 

An urgent update on this and some action by Shopify would appear to be overdue and, yes, I know it's only been days since the last comment but given that many stores wish, and are relying, on selling gift cards to remain afloat this is a serious issue.

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