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EU vat addon - proper implementation

Martin Snelgoedkoop shared this idea 5 years ago
Under Consideration

The EU vat addon is a nice piece of work and it helps a lot.

However the implementation is wrong. Using it "may" lead to a situation where users dont declare tax the way they should and proper reporting is missing.

The addon now sets an tax exempt for customers outside of the member state u are in but inside the EU when they provide a valid VAT registration number. Thats wrong

A tax exempt is not what the rules of the EU specify, needed is a 0% tax rate.

Tax exempt is viable for outside of EU sales only (if it is, im not sure).

This may not be important for your finances but it is for reporting

If u sell to businesses outside of your member state with a valid vat reg number u need to report al those sales via an EU sales list report.

The EU Sales List report includes information about your cross-border

sales transactions with other European Union (EU) member countries. You

must submit this report quarterly if the total of your reportable

transactions exceed the local limit of intraunion trade.

It contains the amounts, vat reg numbers and such, This report lists the goods and services sold by a company to customers

in European Union countries, grouped by the country and tax ID of the

customers.

With the 0% rate instead of a tax exempt the amounts will be registered in the tax report, for those amounts a deduction can be created at the same time leaving u with 0% to pay but with proper reporting...... if the report was available.

I do not claim that it is illigal or that it creates illigal situation, your accountant may solve it for you and your milage may vary.

Comments (1)

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We used to be able to enter a $0 tax to handle residents in the Canary Islands separate from the rest of spain, but lost that functionality in a WHMCS update.