With the last version of Magento the tax still needs to be based on shipping origin to be displayed on the catalog. But this is not the way it should work for us in France as we need to calculate the tax based on the customer address. But then, it’s no more displayed on the catalog and the customer only know the amount of tax when he does a simulation or start to checkout.
Of course Magento can not guess in which country the buyer is living if he is not connected to its account, but the shop owner should be able to choose to calculate the tax based on a default country (for example, it would be France for us). After that, once the customer is log-in Magento could then display the tax that will be really charged, based on the country of the main address of the customer. It’s the way OsCommerce is working and it perfectly fit with the french regulations (and I think other countries from the European-Union are applying the tax on the same way).
I hope my explanations are clear enough but if Magento team need more details just ask and I will try to give you more precisions. Thank you.
Lets say, its more the question, if the tax is visible or not. I guess, if tax should be visible and added, then it would be always the french one and not one from another country. Inside the EU the rules are a little bit difficult. But maybe I try to explain short the version from Germany.
Guests will always see prices including German VAT of 7% or 19% (depending on products). If someone is logged in, then the main address of the person (the one, where the bill should go) decides, if the VAT will be displayed or not. If the customer is from the same country like the shop, then VAT will be always displayed and added at the end. Maybe some settings could change, if prices will be shown with vat or without, but at the end VAT needs to be included in the end value. If a customer is from another country, but still inside the EU, then VAT will be added, if the customer is just a normal customer and not another company. If the customer is a company with a valid VAT-ID, then prices will be charged without VAT. If the customer is from another country outside the EU, then VAT never will be added. Now there is a big big big but. Later in the order process, the customer could add or change the address of delivery. If this address is different than the address for the bill, the delivery address is important to calculate the VAT. Example: The customer is living in Germany. He is getting the bill and he pays the order. Shipping address is Switzerland. Switzerland is not inside the EU. So the shop has to keep the VAT away from the bill, even if the guy, who is paying and getting the bill is living in Germany.
Yeah thats why we need custom fields for sign-up form :D If I understand everything allright VARIEN is based in USA and this is why Magento does not meet EU regulations :/ at the moment…
=> For UE countries the price display should include tax (the best way is to show prices tax Inc and price tax excl)
for example:
11.96€TTC ( 10.00€HT) for a french store
or
11.96€ VAT Incl (10.00€ VAT Excl)
When the shopping cart is shown, it could display prices without VAT and the value of the VAT should appear in order totals BUT with the different products tax rate eg:
VAT 19.6% : XXX €
VAT 5.5% : YYY €
and not the way it is done in the version 1.0 ( even in 1.0.197) with only one value for VAT.
The best way to display products line in shopping cart is to show price with VAT excluded and the VAT rate that will be applied.
By default, if the customer is not logged, the price should include the VAT of the origin country.
For UE, if the order is send to an UE country and the customer is a person, the VAT of the origin country is applied except if the revenue of the orders send to this country have exceeded a certain amount (depends on the country). In that case, the correct VAT is the VAT of destination country and not the VAT of the origin country.
If the customer is a company, the order total is without any tax. In that case it should have a VAT number, that could be check there : http://ec.europa.eu/taxation_customs/vies/vieshome.do
It should be interested to be able to apply tax rates for a zone (countries) and not taxe rate for each country.
I know in UE, and especially in France, we’re a little crazy.