How do you deal with VAT, if based in the EU


#1

Forgive me if the response to this question is evident, but I have not found any answer so far.
As a seller based in Europe (Greece) in need to charge 24% VAT on all goods sold in the EU (well the EEA), but if the buyer is outside the EU, I should charge nothing. The receipt provided to the buyer should show this clearly. How can I do this in Tindie?
Thanks!


#2

Hello,

Thanks for your post.

We recommend including any additional location based costs into your shipping rates.

For example, you can include a higher rate for EU countries and a lower rate for regions outside of that.

Best,
Tindie Team


#3

Well that doesn’t really work if your product has “options” no? Also, it doesn’t allow to show the customer what amount is VAT (showing this information may be a legal obligation in some countries).

Anyways, you should consider adding tax rates as a feature on Tindie in the future… :slight_smile:


#5

Thanks to everyone posting for their feedback!

In the future, we do plan to implement a system to help with tax calculations. For US sellers to start, and then eventually Canada, Australia, and EU. I don’t have any time estimates to share yet, but it is on our roadmap.

Best,
Tindie Team


#6

Hi omzlo, I noticed in your store, you add the “add VAT” option as an item.
Question: Do customers respect that obligation?
How do you deal with customers that require shipping to EU and didn’t select that VAT option?

Also, this “add VAT” as an option does not work if there are other options to select. It does not calculate the VAT based on selected options :confused:


#7

Hello,

The question still remains open I assume - how do you automatically add VAT for EU customers? Charging VAT (20%) is a legal requirement in EU, unless a VAT number provided.

Thanks
Yana


#8

Hi Mario,

Almost all EU customers respect the obligation. EU customers who don’t
respect the obligation typically do it as an honest mistake. In that case,
we cancel the order and kindly ask the customer to place the order again
with the correct option.

As you correctly point out, the “VAT option” only covers the main product
and does not apply to other selected options which indeed may modify the
cost. In our case, options only add a minor cost, for example 1 euro for
extra headers. For the sake of simplicity, we accept to loose the VAT on
those extra options, because it has only minor impact on the overall cost.
We still pay VAT on those options, but we simply take it out of our margin.
In the end, we issue a correct invoice with VAT applied correctly to the
product and all options, as well as shipping.

Of course, this is is quirky and I wish Tindie would simply implement a
option to charge VAT automatically, but it works for us for now.


#9

Seems we’re getting close to two years since this thread was created, has there been any progress on this, @TindieTeam ?


#10

Maybe all of us interested in this feature should get together and build a
EU-based competitor to Tindie :slight_smile: Ruby on Rails? Node.js? Who wants to
start? :slight_smile:


#11

It’s probably better to try to improve a service that works well 90% of the time rather than start one from scratch :wink:


#12

You will probably have to add all options with and without VAT, and hope that buyers will select the appropriate option based on their location.


#13

We did that for a while (using options), but it’s really a hassle. First there are buyers that forget to select the right option, so you need to cancel their purchase and explain. It’s annoying for the seller and the buyer.

We finally decided to increase our prices on Tindie by 10 to 12%, which is about half of the VAT rate we should apply for customers in the EU. So we loose a bit of money for EU customers and gain a little for non-EU customers and it kind of averages out. We have built some tools that query the Tindie API and pull our customer’s order and then recalculate the VAT for EU-customers, in order to edit invoices that are correct with regard to applicable regulations.