EU VAT application and invoices

New Member
3 0 0

 

Hi all

As many other people I'm sure, I'm stuck on a problem related to EU VAT laws... Just spent the whole day trying to figure out if Shopify can handle EU VAT laws and it seems like it can't do so correctly... Some threads go back to 2006 so it seems like they have been aware of the problem since then but haven't addressed it yet...

For most countries in the EU, three things are required: 

1) prices displayed need to include VAT 

2) VAT needs to be charged to customers within the EU (19.6% in France, 20% in Italy etc.) and not charged to customers outside the EU

3) invoices need to show the VAT for EU customers and no VAT for non-EU customers 

At this point, it seems like it's not possible to do that. If I sell a product, say, €10, then the price displayed needs to be €10. For EU customers, the invoice needs to show a 19.6% tax, €8.36 net + €1.64 VAT; for non-EU customers, it needs to show €10 (no VAT). 

Anther problem stems from the fact that in many EU countries, different product types have different tax rates. In France for example, most products are taxed at 19.6% but food products are taxed at 7%. At this point, Shopify doesn't let me edit tax rates for particular products. 

Do you know if there's a way around any of those two problems?

Here are two previous threads on the topics but none of them seem to provide any answer..

http://forums.shopify.com/categories/1/posts/4445
http://forums.shopify.com/categories/1/posts/1315

Any tips on this would be extremely helpful... Thanks a ton in advance

 

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Hi Alexandre,

I think there is a good way to get what you need to work with Shopify for your 1st issue.

In your Store Admin go to the "Preferences" menu and select "Regions & Taxes". There you have a check mark saying "All taxes are included in my product prices." -> Activate it.

Then setup each country in the section below that you need to charge taxes for and the rates (19.6% in France, 20% in Italy etc), and then make sure that "Rest of World" is set to 0%.

Once that is done, then Shopify will automatically calculate the taxes as included for the EU customers and non-existent for other parts of the world.. but the price remains the same.

Now the next part is going to sound like a bit of an advertisement, and it kind of is ;)

Our new app OrderlyPrint will display this tax information correctly in generated invoices automatically. See attached images explaining what I mean (US.png shows someone living outside of EU not being charged taxes, and EU.png shows someone within EU where taxes are included in the price). It will also include the name of the tax (VAT for example) and the percentage.

Anyway, it's free to try so check it out and see if it solves your Invoice problem.

As for your 2nd issue I'm not sure what to suggest, sorry.

Best regards,
Bjørn

 

 

 

Bjorn Forsberg | FORSBERG+two | Award-winning Shopify Apps since 2011
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Sorry for posting again here, but I could only upload 1 image per post.

Bjorn Forsberg | FORSBERG+two | Award-winning Shopify Apps since 2011
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Tourist
4 0 1

Well, I must confess, this does not work. I am very sorry but it is absolutely not possible to sell to Eu customers and non-EU customers at the same time with correct VAT calculation implemented unless shopify completely revamps their system on that end. Very frustrating. I know it is complicated but we are seriously struggling with international customers. 

Orderly print is of no use. Idea is good, implementation unusable. Invoices underly certain DIN regulations. Your invoices don't meet those. 

First: we have DIN page A4 size. They differ from the US letter size. Furthermore: letters have a different size than here. The address field has to be placed quite differently in order to be readyble, etc. etc. Your approach is good but still needs a good deal of updates.

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Highlighted
Excursionist
10 0 8

Hi guys,

many of you experience the same problem with EU VAT handling. Since Shopify still not has a proper solution for this, I decided to set up a petiotion. Maybe we can convince Shopify together. Let's unite!

http://www.ipetitions.com/petition/shopify-eu-vat-exemption

#ShopifyVATexemption

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Shopify Partner
2 0 2

I worked on addressing this problem about a year ago and solved it using a combination of Shopify's TAX rules feature, product variants and modal dialogs to collect VAT ID (VATIN) and validate it. It works but it's kludgy and requires manual work to set up multiple product variants (B2B and B2C with different tax rules). Another drawback is that it creates friction for the buyer since they need to indicate whether they're B2B or B2C. Ideally, it should be integrated in the checkout process.

If this seems like a workable compromise, I'm willing to help on a consulting basis.

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Shopify Partner
9 0 1

Hi guys,

not sure if you are still looking for a solution, but we recently launched an app excactly for this purpose. The name is Exemptify, you can find it on the Shopify App Store.

Exemptify adds a EU VAT Id field to the customer account section of your shop and verifies VAT Ids through the official EU Webservice VIES.

Exemptify validates the VAT Ids of your customers, stores them if they are valid and then tax-exempts the customers. The VAT Id is added as an order note to each order placed through accounts with valid Ids.

Optionally the app also fixes the price display in your store front to show the price incl. VAT (which is a legal requirement in the EU).

Hope that helps. Please message me if you have any questions.

Cheers
Thorsten

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Shopify Partner
52 0 27

Hi everyone,

In case you are still struggling with EU VAT and invoices, consider using Sufio invoices. We provide legal and compliant invoices with accounting legislations around the world, in over 20 languages.

Follow our VAT guide for EU Shopify stores if you have troubles setting up your taxes. Our articles cover tax guides for other countries too, including India, Australia, and Canada.

If you require further support or have any questions or concerns, just message our team at support@sufio.com and they will be very happy to help.

Install Sufio invoicing app to your Shopify store, and you have 14 days to test out all the features for free.

Happy invoicing!

Jan, Sufio

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