We want to add gift cards to our EU based e-commerce website.
According to the new EU VAT regulation our gift cards would fall in the Single Purpose Voucher (because at the moment of the sale we know it will be used only on our website and only for products that are subject to 22% VAT) and would therefore need to be taxed for VAT at the moment in which the card is sold.
In order to avoid paying taxes twice, when the card is sold and then again when the product is sold, we would have to find a way to deduct the value of the card from the taxable amount of the product purchase (as if it was a voucher) rather than consider it a method of payment.
Has anybody else had the same issue? How did you deal with it? Ideas/Suggestions?
@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..
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,
Victor | Shopify Social Care
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
@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.
@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.
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.
I do not have an update to provide on this issue at this time, but I will be sure to touch base with the relevant team on this matter again. I can appreciate the frustration in this option not being available for you, and I have ensured that the feedback and suggestions made in this thread have all been passed onto our team looking into this feature so they can better understand how it is affecting merchants in the EU.
As before, I will be sure to post an update here if and when I have one to provide.
Victor | Shopify Social Care
we're building a webstore for our client and we also need that feature.
It is legal requirement and its really not good enough that you do not provide a solution for this.
Looking forward to the resolution for this issue.
Just red all the comments about this issue with gift card taxes. It's a pity that a company that is living from the merchants' whats are generated on it's platform doesn't take care of the merchants who generate business.
BTW what about an offer? We, who live on the old continent and living under the trade regulation of the EU can get a discount of our Shopify usage as we have to pay for an app to be able to sell our products legally?
That would be a generous way to deal with this ridiculous issue.
I've read every word of this thread. I'm a UK business and I'm under the UK laws, and I have an accountant telling me I need to fix this ASAP... so, I require a solution @Victor. Please can you flag this again with whoever you need to flag it with. There are thousands ok UK businesses using Shopify and currently breaking the law selling gift cards without tax...
Please help be to fix this.
I do not have an update to provide, nor do I have any sort of timeframe on when a change may be made. I know that this issue is with the relevant internal team and if I hear any updates on this matter, I will be sure to share it here as soon as I do.
Victor | Shopify Social Care
Any news on this? My accountant raised the issue as well.
On top, the new Tax module says I should edit my variants to charge tax, there's a technical error when I try to do so.
'Charge Tax on this product' is also not available in the edit price for gift cards.
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