Tax configuration - EU
How do I configure taxes for the EU?
Taxes for the EU must be added manually. Head to Configuration > Taxes > European Union > Manually add tax rates. Due to the complexities regarding different member states, additional information is required when you are manually configuring your taxes for the EU. Our three step process makes sure that you'll be charging the right amount for the product you're selling.
What is VAT MOSS?
The VAT Mini One Stop Shop (MOSS) is an optional scheme that allows you to account for VAT - normally due in multiple EU countries – in just one EU country. You can find out more about VAT on digital services on the European Union website.
What is location validation?
If you turn this toggle on we will validate your customers location using their billing address as well as their IP address to ensure that they are where they say they are.
What is VAT validation?
If you turn this toggle on we will validate your customers' VAT number against the VAT Information Exchange System. If we successfully validate your customers' VAT number, then they will become exempt from paying VAT on their subscription.
What is a VIES VAT Consultation number?
The VIES can help companies to prove to the Tax Administration department that they have successfully validated a customer's VAT number at a certain time. If you switch this toggle on we will generate a VAT consultation number using VIES.
What is a VAT Exemption note?
A VAT exemption note will be applied to your customers invoice if goods are exported to countries outside the EU, as per Article 146 of the EU VAT Directive. You can customise the note in the text box by clicking the 'Edit' button.
Is 0% a valid tax rate of VAT?
0% tax rate is a valid tax rate that is used by some countries (primarily in the EU region) to distinguish between exempt and taxable goods. A reduced rate, <5%, and sometimes “0% (zero-rated) tax” is applied on certain goods by the EU member states. This rate is considered as a taxable rate of VAT and the revenue generated from zero-rated goods (applicable only to selected items) is still included in the taxable revenue. In the case of “exempt” supplies, businesses cannot register for VAT and are not entitled to a VAT reclaim on their business expenditure.
Updated almost 3 years ago