Changes to VAT calculation behavior

[phoenixhelix]

I haven't enable VAT settings - the box is unchecked, but you are still calculating VAT anyway and reducing my affiliate commissions. Is there a way to override this? Or are you intentionally making this a default setting that can't be overridden?



In doing some further digging around in settings, I notice that you connect sales tax and VAT together in one checkbox on the product settings. So, if I want to charge sales tax, VAT automatically gets configured as well. Can you separate these settings, so we have a choice?

[E-junkie_Guru]

The product-level Sales Tax/VAT setting just determines whether that item is subject to whatever Sales Tax and/or VAT calculation may be configured for your account in Seller Admin > Sales Tax / VAT Settings. I see you do have Sales Tax but not VAT configured for your account, so your log should not be calculating VAT on any sales. Thanks for reporting this bug; I will bring that to Development's attention.

[E-junkie_Guru]

PrintChapIs it possible to have two additional fields in the transactions log? I would like a numeric data only tax field and a country of residence field (as in the old logs). This will make sorting and reporting for VAT MOSS an lot easier. Thank you.

Note that your Web-based Transaction Log view is intended as a human-readable format, which differs from the downloadable log export file we provide in a machine-readable format suitable for spreadsheet programs or other software tools. When you have EU VAT enabled, the downloadable log includes new columns at the end reporting discrete values for VAT-related data.



I'm asking Development to clarify what some of these fields are reporting, so we might yet revise the field labels and/or the order in which they appear, but that should be settled within a few days. Once we've got that finalized, our Transaction Log help page will document the new fields:

http://www.e-junkie.com/ej/help.transaction-log.htm

[printchap]

I hadn't realised there was a difference between the web and download transaction log. The donload version works fine for me witht eh extra fields. Thank you.

[lorilin]

E-junkieGuruNow, regarding the suggestion to set different prices for non-EU vs. EU buyers, you can already accomplish this right now, without needing to create duplicate products nor maintain separate seller accounts.



****snip****

Thanks E-junkieGuru! I'm glad I won't have to make duplicate products (that would mean upgrading my account, or creating a second one as I'm already near my 60-product limit).



It sounds like one of the solutions you suggest will be a good workaround in my case.



The only thing I'm still confused about is shipping charges. I have to charge EU VAT on shipping as well. Now I'm set up to have variable shipping charges based on weight, and whether the customer wants "signed for" delivery or not.



I'm guessing I can edit/redo all my shipping rules so that the EU shipping prices include VAT, and the non-EU shipping prices don't. Am I right about this being the simplest way?



Cheers,

Lori

[bamberg]

I had thought that shipping as well as physical goods should not include EU VAT.

[lorilin]

bambergI had thought that shipping as well as physical goods should not include EU VAT.

I can't comment on your situation, but unless I'm mistaken, here in the Netherlands I have to charge 21% Dutch VAT on all goods I sell to private parties whose shipping address is in the EU. I don't sell to other companies, only private parties, and I only sell physical products, nothing digital.



Sometimes I wish I could just have a regular 9-5 and just focus on doing actual work, not trying to figure out rules and regulation (I'm really not good at that).

[bamberg]

Sorry for the confusion - I am in Switzerland, so I am selling into the EU, so shipping/goods do not need VAT as far as I know, you being in the EU is completely different.

lorilin

Sometimes I wish I could just have a regular 9-5 and just focus on doing actual work, not trying to figure out rules and regulation (I'm really not good at that).

oh yes, i agree!

[E-junkie_Guru]

lorilinThe only thing I'm still confused about is shipping charges. I have to charge EU VAT on shipping as well. Now I'm set up to have variable shipping charges based on weight, and whether the customer wants "signed for" delivery or not.



I'm guessing I can edit/redo all my shipping rules so that the EU shipping prices include VAT, and the non-EU shipping prices don't. Am I right about this being the simplest way?

Actually, the simplest thing you could do would be to set Handling as a % of Shipping in your Cart Shipping Settings. That'd just boost all your shipping calculations by whatever % you specify for every order. :^)

[phoenixhelix]

E-junkieGuruThe product-level Sales Tax/VAT setting just determines whether that item is subject to whatever Sales Tax and/or VAT calculation may be configured for your account in Seller Admin > Sales Tax / VAT Settings. I see you do have Sales Tax but not VAT configured for your account, so your log should not be calculating VAT on any sales. Thanks for reporting this bug; I will bring that to Development's attention.

Thanks so much for reporting the bug. Any timeline on a fix? I realize I have no idea if it's a simple or complex programming issue.

[E-junkie_Guru]

The bug that allowed VAT calculation to happen for sellers who don't have VAT enabled has been fixed as of yesterday morning, but Development still needs to retroactively correct the logs for sellers who were affected by the bug, which they said they'd be doing today. This log correction should merely delete any VAT calculated by mistake and then recalculate affected affiliate commissions accordingly.

[phoenixhelix]

E-junkieGuruThe bug that allowed VAT calculation to happen for sellers who don't have VAT enabled has been fixed as of yesterday morning, but Development still needs to retroactively correct the logs for sellers who were affected by the bug, which they said they'd be doing today. This log correction should merely delete any VAT calculated by mistake and then recalculate affected affiliate commissions accordingly.

Thank you so much. Awesome customer service, and I really appreciate it!

[flixelpix]

One issue, you don't have to charge domestic VAT on digital products if you fall under the VAT threshold. I had a local sale and VAT is being added to the transaction. Is there anyway of it ignoring domestic sales? it does ask in which country we reside in the VAT option list?

[E-junkie_Guru]

Our VAT calculation does not add VAT to any transaction; it only calculates after the fact how much of the total price paid would constitute VAT. You can simply disregard any VAT amount(s) we calculate if you determine you are not subject to pay it.

[flixelpix]

E-junkieGuruOur VAT calculation does not add VAT to any transaction; it only calculates after the fact how much of the total price paid would constitute VAT. You can simply disregard any VAT amount(s) we calculate if you determine you are not subject to pay it.

Thanks, it dawned it me after I posted it was just a matter of zeroing the GB transactions at the end of each quarter. Thanks for the reply.

[speedie]

E-JunkieGuru



In the list of file types and extensions made on the first page you did not mention .exe among the digital downloads. I understand these are subjected to VAT. In Australia I am required to pay GST of 10% on all sales to Australians. So long as your download log has the appropriate information, I will be content with that. Finally, I think a 13% VAT/GST built into the price sounds reasonable. Since I have no competition I do not have to worry about what others are doing. My .exe eBooks will be very affordable considering their content.

[E-junkie_Guru]

That list of filename extensions only determines what we regard as an "ebook" product as distinct from any other downloadable product, to accommodate jurisdictions that specify a reduced VAT rate on ebook sales in particular while other downloads are subject to the regular VAT rate.



Our VAT calculation feature is only intended to handle the rather complicated requirements of EU VAT. However, for Australian GST, you won't need to include a markup in your item prices to cover GST, as that can be handled using normal sales tax-style calculation; just enable Sales Tax/VAT in your products' settings, then in Seller Admin > Sales Tax/VAT Settings checkmark "Tax buyers from country", select Australia, and enter your domestic GST rate as the tax rate.

[E-junkie_Guru]

We have recently updated our Sales Tax & VAT help page to explain our new VAT calculation behavior and the new Transaction Log fields that report data for VAT purposes:

http://www.e-junkie.com/ej/help.tax.htm



We have also updated our help pages for Thank-you Emails and Thank-you Pages to document new template tags we now support to insert VAT details:

http://www.e-junkie.com/ej/help.custom.thankyou-email.htm

http://www.e-junkie.com/ej/help.custom.thankyou-page.htm



Here's a quick outline of the new template tags for VAT:



For Common Thank-you Page HTML and all Thank-you Emails:

[%country_digital%] = VAT place of supply for digital items

[%country_tangible%] = VAT place of supply for non-digital items

[%vat_digital%] = Order subtotal of VAT calculated for digital items

[%vat_tangible%] = Order subtotal of VAT calculated for non-digital items



For product thank-you page Message (HTML) and product thank-you Email Message:

[%vat_country%] = VAT place of supply for the item

[%vat_rate%] = VAT rate applicable for the item's place of supply



You may notice we do not report VAT amounts calculated for individual items; this is because VAT must be calculated on whole-order subtotals of item prices for each applicable VAT rate. Due to compound rounding errors, any sum of rounded VAT amounts for individual items may differ slightly from a VAT amount calculated on the sum of those items' prices, so the regulations mandate the latter method.

[lorilin]

E-junkieGuru

lorilinThe only thing I'm still confused about is shipping charges. I have to charge EU VAT on shipping as well. Now I'm set up to have variable shipping charges based on weight, and whether the customer wants "signed for" delivery or not.



I'm guessing I can edit/redo all my shipping rules so that the EU shipping prices include VAT, and the non-EU shipping prices don't. Am I right about this being the simplest way?

Actually, the simplest thing you could do would be to set Handling as a % of Shipping in your Cart Shipping Settings. That'd just boost all your shipping calculations by whatever % you specify for every order. :^)

Other stuff is now off my desk so I can start working on this. It looks like I have to set a handling fee globally in



manage your seller account> Edit Ejunkie shipping settings > Handling



So all customers -- EU or non-EU would get charged the handling fee. Maybe I missing something? I want to charge VAT (or a 21% handling fee over the shipping charge) on shipping only to EU customers. Don't think my non-EU customers would appreciate a 21% handling fee on the shipping.



Thanks for your patience with my questions. I'm kind of freaking out about this whole thing, because I MUST be ready to process thousands of orders within the next two weeks. At this point, all I want to do is cry.

[E-junkie_Monster]

Hi Lorilin,



We really sympathize, the EU's changes are causing a lot of problems for everyone.



Keep in mind that if you are using our VAT tools we'll already be calculating the tax on shipping automatically. Guru's suggestion was meant to raise the shipping rate for everyone, but not necessarily by 21%, you just need to spread the cost out amongst all of your buyers to balance out what you expect to pay on shipping VAT.



It is possible to create country specific shipping rates to allow you to give each country in the EU an adjusted shipping cost that accounts for their individual VAT rates instead, but that will take a lot more time and effort out of your already cramped schedule. A temporary boost on the handling percentage could be the temporary fix that allows you to focus on other matters for now.



I took a look at your current shipping settings and it looks like you've already set up a series of flat rates for individual countries based on order weight. That means you don't need to rework your entire shipping set up, you just need to redo the rules for EU countries to raise their rates according to their individual VAT requirements. It will still be time consuming, but at least you won't be starting from scratch.