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Credit system usable in European Union countries

Adam Ošťádal shared this idea 5 years ago
Under Consideration

We are company based in European Union. Here we have to pay VAT from every received payment including credit which client deposits onto his client account as credit.

We cannot use current credit system in WHMCS because it is not fully legal in EU.

Is it possible to add some EU-friendly credit system?

1) Client adds funds/credit to his account and gets an invoice where the deposited amount is the amount WITH VAT included and only the amount WITHOUT VAT is added to his credit account.

2) When he uses credit to pay any invoice, there should be following scheme:

SUBTOTAL without VAT - CREDIT = TOTAL WITHOUT VAT + VAT counted from the TOTAL.

Comments (65)

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[quote]1) Client adds funds/credit to his account and gets an invoice where the deposited amount is the amount WITH VAT included and only the amount WITHOUT VAT is added to his credit account.[/quote]

Thats completely wrong!

Clients have to add Credit with an Invoice WITHOUT TAX! They pay the tax when they pay their Products and not when just load up his account. If you do this you Pay double Taxes on your side. Speak to your tax consultant or look for an consultant who know what he is doing.

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I agree with scysys for a very simple and logical reason. At the moment you top up your credit, it is not known what product or service will be bought and therefore you cannot determine which will be the VAT rate to charge. There are countries with different VAT rates. Hosting might be one percentage and teaching another (some web service companies offer courses to their clients). In Spain VAT on teaching is 0%.

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Adding VAT tax to the funds and only deduct them if they get used is much too difficult higher mathematics for people which still calculate with withholding taxes which isn't existing in most European Countries. But this also means that WHMCS won't work either with countries where they have that withholding taxes as here the customer won't pay the full tax as the tax the customer pays gets split up in a part paid by the customer and another part by the seller. And that is probably the reason why WHMCS does not add the VAT Tax to the funds.

In other words WHMCS will for sure be also unusable in future for people which have to deal with EU customers - which INCLUDES by the way also WHMCS as they have to deal with EU customers themselves and are NOT allowed to NOT include the VAT TAX into the funds and are only allowed to deduct any VAT TAX actually from single customers who can't present a EU Company Tax number as all EU customers which are a company registered in the EU will have also an EU Tax ID and those customers don't have to pay the VAT TAX but for all EU customers who don't have that TAX ID the SELLER i.e. WHMCS would need to pay the 19 - 25% Taxes depending on the EU country the buyer resides (NOT where he does the purchase!!!).

I would suggest that WHMCS is changing the way how they calculate and doing their TAX math immediately to a proper and correct one.

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Andi Becker wrote:

EU customers which are a company registered in the EU will have also an
EU Tax ID and those customers don't have to pay the VAT TAX

It is more complex than that. I know at least one country (Spain) where national companies with EU Tax ID do pay VAT. Only foreign companies with an EU Tax ID are exempt from VAT there.