Differentiate between OSS VAT and local VAT transactions

[summerglau]

I am trying to figure out EU VAT reporting for Shopify sales. I think our situation is also faced by many others who store inventory in more than one EU country which is not their base country and also use the OSS scheme for reporting cross-border sales.

We are a company registered in the Netherlands (NL) and store inventory in NL and DE. We have VAT registration in both NL and DE.

Since July 2021, we are registered for Union OSS scheme in NL for the cross-border VAT according to recent EU VAT regulations.

And, Shopify does indeed charge the correct rates for all transactions.

However, we are in a tricky situation since this requires VAT relevant transactions for Germany to be reported separately either via a DE local filing or NL OSS filing depending on where the original inventory was located at the time of sale.

I tried to make the below picture to show under which reporting scheme needs to be used for which transaction.VAT schemes

However, in Shopify, the Tax report does not seem to differentiate between the two types of transactions that are marked in RED above.

We also sell on Amazon which provides a report (AVTR) which has a field against each transaction indicating whether local or OSS scheme was used.

Is there a way in Shopify Tax reports to differentiate between transactions to say Germany which should be reported under different schemes? We are on Basic Shopify plan so can not make custom reports.

We would really appreciate any tips on how to achieve this.

[CloudlabSam]

Hi there - this sounds like an interesting problem to solve! Our free app Report Toaster allows you to report on all of your Shopify data. If you want to take a look, we'd be glad to try and help you get the issue sorted out. Thanks!

[RienNeVaPlus]

Hi @summerglau, I'm curious, did you ever figure out how to solve this?

[summerglau]

Well, yes and no. We figured out a workaround that works for us.

Basically, we now use different SKUs for different warehouses (like NL_SKU1, DE_SKU1 etc.) and use filters/pivot tables to classify and calculate taxes under different schemes. Not an ideal solution (manual, error prone) but works for us because we have a small catalogue).

I wish there was a more elegant solution.

P.S. I also noticed that in my original post the arrow from DE inventory to NL customer should also have NL OSS VAT as scheme (and in the filing, we have to differentiate the warehouses).