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VAT Tax questions ... for anyone ...
My client is from an EU member country ... he wants to INCLUDE VAT in his prices ... is this allowed for physical products? I'm an American so I don't understand all the details ... I just know that I should tell Perch all the different VAT rates for each country.
Is this something he'll get in trouble for? Or is including VAT in the price okay? He wants to build in a high rate of 27%.
The basic rule for physical products is that the place of supply is where the goods are sold from, so if his country rate is 27% then that would be what to add. However we're not accountants and if your client is asking you to do something, and you don't have the ability to know if it is correct or not then just make sure it is clear in your communications that you are not offering advice - merely implementing his requirements. Suggest that he takes advice from an accountant first.
So, from a technical standpoint ... if he is including VAT in his product price and charging everyone a higher 27% rate, how do I do that from a technical standpoint?
Do I tell the system the tax rate is 0% for everyone and then remove the Tax from the cart summary?
Or do I have to show that VAT rate of 27% for everyone?
I’m so confused on what I’m supposed to do with the EU VAT system.
Assuming the product is a physical one, then including the VAT in the product price for all customers is fine as long as you don't show it as added tax on the invoice to the countries outside the taxable zone(s). It just means your products will be 27% more expensive in those countries.
I would say your idea above covers this scenario just fine, but Rachel's advice above is very sensible – your client really should get the green light on this from their accountant first.
Thanks Rachel & Jonathan ... you both have been helpful in your advice.
I’ve voiced my concern to the client, referred him to seek an accountant’s advice, and washed my hands clean :)
In my tests, my set up worked just fine. Thanks again.