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EU VAT vs Magento 1.4
 
Artega Imports
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Hi. I have recently upgraded to 1.4 and the projects I am working on are working fine.

One of my last snags however is the main reason for the upgrade int he first please.

The EU VAT module was supposedly (unless I am mistaken) installed as standard on the new 1.4.

I have checked around and maybe I am missing something but I cant find this module within the backend.

Anyone else solved this or even found what I may be missing ?

Regards, Mark (Hex UK)

 
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Artega Imports
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B ump
U p
M y
P ost

Anyone solved ?

 
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John
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Hi - what are you looking for extra?  What would this module do for you? 

The improvement in 1.4 seem to be around display of TAX and the calculations.

Thanks
John

 
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Artega Imports
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Hi John. I was reading up about the inclusion/exclusion of VAT for overseas customers. I found that it was a legal requirement to at least ask the overseas customer if they have a VAT code. If they do, apparently they have to pay VAT like UK customers.

If not, they are excluded from paying VAT and we have stayed within the law by asking the question in the beginning.

I am still not sure what the exact procedure is and was asking if 1.4 does this for me. I still have no clear solution within the admin section of 1.4.0.1 Magento

Any help or similar questions very well appreciated.

Mark

 
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John
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Hi - We have not been advised that we have to ask for a VAT number, actually quite the opposite.  If a VAT number is supplied then a VAT invoice should be sent so that the purchaser can claim back VAT.  Providing the VAT number on your invoice should suffice though.

As for outside the EU.  You cannot charge VAT to those sales and so cannot claim it back.

There are a couple of extensions that help you deal with capture and checking of VAT numbers if it is a big part of your business.

This is the one I have seen most about - no recommendation though :
http://www.magentocommerce.com/magento-connect/pillwax.software/extension/1438/euvat-tax-calculation-for-eu-based-ecommerce

Rgds
John

 
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Artega Imports
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Thanks John. I was not too sure where I stood but at least I have some knowledge on this now.

Kind Regards, Mark

 
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stevecgarry
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Ok, let’s clarify this a little, as there are some wrong ideas above.

A VAT registered trader in the UK shipping to another EU country needs to check with the customer in that country if they are VAT registered in their state.

If they ARE VAT registered, and provide a valid VAT number, which MUST be quoted on the invoice, and retained for reporting, then the UK supplier exports, with a valid VAT document that must show BOTH VAT numbers, at Export rate of VAT (0%), (NOT the Zero rate, which is different) and the recipient processes the invoice as an import at their end, and (effectively on paper only) pays VAT within their juristiction.

If the recipient is NOT VAT registered, and lives within a VAT state, then UK VAT applies, and cannot be reclaimed by the recipient.

As I don’t have to do sales outside the EU, I’m not 100% sure of the rules there, i think that VAT is not applicable, but that may not be correct,

It gets a LOT more complicated if you get an order from a customer in France for delivery to an address in the UK, and I’m not going to go down that road now, it needs to be checked with the relevant VAT authorities.

Be also aware that if you are exporting, there are significant extra reporting requirments in respect of the reporting of VAT on these sales.

Steve

 
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Artega Imports
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Steve I am still clearing up this issue.

A question did jump in my head yesterday.

“what if a customer says they are resident in the US and want the goods delivering to a UK address”.

In a nut shell we would have to check their VAT number to ensure they are registered in the US and therefore would be excluded from VAT.

Delivering the goods to a UK address worries me as I am very aware of the “triangle” fraud which can save a LOT of VAT being paid on products by private UK customers.

Any other information/official resolution would be gratefully recieved.

Mark Birchall, Hex UK

 
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stevecgarry
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www.HexUK.com - 21 April 2010 02:08 AM

Steve I am still clearing up this issue.

A question did jump in my head yesterday.

“what if a customer says they are resident in the US and want the goods delivering to a UK address”.

In a nut shell we would have to check their VAT number to ensure they are registered in the US and therefore would be excluded from VAT.

Delivering the goods to a UK address worries me as I am very aware of the “triangle” fraud which can save a LOT of VAT being paid on products by private UK customers.

Any other information/official resolution would be gratefully recieved.

Mark Birchall, Hex UK

Mark ,

A US customer as such can’t register for VAT, the important issue is the delivery address, Assuming you are UK based, then a delivery to the UK has to be charged VAT at UK rates regardless of the ordering address, as the goods are not being exported. (If you are not UK based, then as long as you are within the EU Vat zone, it’s an export, so if there is a valid UK VAT number, then it is export zero rated) In this scenario, the invoice address is a red herring, it’s where the goods end up that determines the VAT treatment.

If this is something new for you, and will be a significant part of your business, it will be worth checking with Revenue, to be 100% sure, as there are also special reporting requirments for export sales of goods (VIES) that can be very onerous, and need to be incorporated from day 1. I am Ireland based, which is why I am aware of this, as I’ve hit this before, where I was buying from Austria, and selling into the UK from Ireland, it can get very complicated!

Hope that helps.

Steve

 
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Artega Imports
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Thanks a lot Steve. I will monitor orders for now and ensure I have followed the relevant steps.

 
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John
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Steve, Do you know where you got the advise that you must as a EU customer if they are VAT resisted?  VAT numbers are only used to recover VAT - the company does not need to recover VAT from the country and so I am interested in the must part.

Thanks
John

 
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stevecgarry
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John,

The MUST came from the requirement that under VIES, a report has to be submitted to the responsible authorities in your state of registration giving very specific detail by invoice of the goods exported, which is a total pain to a small trader. That’s the Irish regulations, which I have to work under, but the concept and implementations are EU wide.

You are indeed correct, there is no VAT to recover on an export sale, the reason for having the reporting is that the receiving company in the country of destination has to report the value of the goods received and declare VAT at the local rate, albeit that as it’s a report and a refund, it’s a paper transaction as such, and no money is forwarded. the underlying issue is that all the countries have a very clear requirement to ensure that VAT is being charged and collected appropriately, and not avoided by devious or illegal schemes.

This may not be the latest and most up to date information, but the link http://www.dpctech.net/docs/export_of_goods_inside_ec.pdf will take you to a very clear document that relates to the UK, and if it’s not the most recent information, the requirement will only have become more onerous, it’s for sure not been relaxed any as a result of a number of large frauds on things like computer chips in recent years.

Hope that helps some

Steve

 
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