Due to the complexities regarding different member states, additional information is required when you are configuring your taxes for the EU.
Manually add tax rates
In your account, head to Settings > Configuration > Taxes > European Union > Manually add tax rates. We have a three step process to make sure that you'll be charging the right amount for the product you're selling.
First, you will need to select the product type you are selling: either digital or non-digital. For digital products we ask for information about your VAT MOSS registration status. If you are registered, we will require your VAT MOSS details. For non-digital products you bypass these steps.
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.
You will need to add tax rates for each of the EU countries that you wish to complete configuration for.
If you need to collect a tax registration number from customers, turn the toggle on.
Validation options
If you collect a tax registration number from customers, you'll have the following validation options that you are able to switch on.
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.
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.
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.
Exemptions
In the case of exemptions, the following exemption notes will be applied to the invoice.
VAT exemption note for reverse charge
A VAT exemption note will be applied to your customers invoice if a valid VAT registration number was applied. You can customise the note in the text box provided.
VAT exemption note for exports
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 provided.