VAT on invoices for different scenarios

  • Resolved askingg

    (@askingg)


    4 years, 6 months ago

    As we are a business settled in Estonia selling digital products and services throughout the EU, there are different scenarios concerning VAT we have to consider when creating invoices:

    Professional Services = Consulting, Virtual Assistance, Webdesign, Content Creation …

    • For business customers from the EU with a valid VAT number, we need to apply 0% VAT, adding a clause on our invoice: ‘The purchase is liable to Intra-Community supply 0%, Reverse charge.’
    • For “small” business customers from the EU who don’t have a valid VAT number, we need to charge our local 20% VAT.
    • For customers outside the EU (e.g. Switzerland), we need to apply 0% VAT.

    Digital Services = automated products e.g. Web Hosting, Online Course, eBooks, recorded Tutorials …

    • For business customers from the EU with a valid VAT number, we need to apply 0% VAT, adding a clause on our invoice: ‘The purchase is liable to Intra-Community supply 0%, Reverse charge.’
    • For “small” business customers from the EU who don’t have a valid VAT number, we need to charge VAT according to the customer’s physical location (e.g. Germany 16%).
    • For customers outside the EU (e.g. Switzerland), we need to apply 0% VAT.

    How can we adhere to these rules and still enable automatic billing?

Viewing 2 replies - 1 through 2 (of 2 total)
  • Phil

    (@fullysupportedphil)

    Automattic Happiness Engineer

    The EU Vat Number plugin will be a good fit for you:
    https://woocommerce.com/products/eu-vat-number/

    That allows customers to enter a VAT number at checkout in order to help your site decide if VAT should be charged or not.

    On top of that, you’ll need to set up your different tax rates.

    Since you need to different sets of tax rules for your products (Professional Services versus Digital Services), you will need to add a custom tax class. This allows you to set up different tax rates for each class. You can then choose on your products which tax class that product will use.

    If you haven’t already, I would recommend reviewing our help documentation on Taxes. This link specifically goes to the section about adding more tax classes:

    https://docs.woocommerce.com/document/setting-up-taxes-in-woocommerce/#section-7

    Plugin Support Tseten a11n

    (@tibetanitech)

    We haven’t heard back from you in a while, so I’m going to mark this as resolved – if you have any further questions, you can start a new thread.

Viewing 2 replies - 1 through 2 (of 2 total)
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