Does WHMCS deal "correctly" with EU VAT?

[UH-Simon]

We're a UK company. EU VAT rules state that if another EU member country provides an VAT registration number with their purchase then VAT should not be charged. I have checked the demo and cannot see any specific handling for this scenario (eg. displaying an optional VAT number if customer selects France etc for country) in WHMCS but seem to recall reading that the latest version does fully support the EU VAT rules?

[UH-Simon]

PS. I have noted the tax rules section but this seems to be an either ON or OFF situation, not a OFF if VAT number provided but ON if no VAT number.... confusing myself now

[luckdragon]

don't know if it's a feature or not, but to translate what you are saying for those "american" readers..

 

if a client provides a tax-id/tax exemption number (like a church for example).. is there a way to have the script not charge tax?

[Matt]

There is a tick box in the clients profile labelled Tax Exempt which you can tick to have that user not charged tax regardless of if they qualify based on your tax rules or not. But the ticking of that box does need to be done manually and a custom field used to store the VAT/Tax ID Number.

 

Matt

[UH-Simon]

There is a tick box in the clients profile labelled Tax Exempt which you can tick to have that user not charged tax regardless of if they qualify based on your tax rules or not. But the ticking of that box does need to be done manually and a custom field used to store the VAT/Tax ID Number.

 

Matt

 

Ok, so at the moment the handling of EU VAT is a manual process and cant be dealt with on the initial payment. Is there any plans to expand the system to be able to deal with the EU VAT situation from the moment the order is placed? Thanks.

[Matt]

Because the custom field number/name is variable from install to install, it isn't possible to support it by default but it's only 3/4 lines of code needed in the client signup action hook to automate it.

 

Matt

[UH-Simon]

Because the custom field number/name is variable from install to install, it isn't possible to support it by default but it's only 3/4 lines of code needed in the client signup action hook to automate it.

 

Matt

 

Ok cool. Thanks Matt.

[Terra]

Hi Matt - just to butt in and to support Simon's request about EU VAT rules. If this can become a standard feature or if the code can be published somewhere so we can update it ourselves would be great. Any EU company which is VAT registered has to comply with these VAT rules, so should be of interest to quite a few users of WHMCS. Many thanks, Edith

[DF-Duncan]

Just to add though, I believe the EU VAT rules states that no VAT it to be charged "if" both companies agree to this.

 

However having the feature would be nice also.

[Matt]

Hi Matt - just to butt in and to support Simon's request about EU VAT rules. If this can become a standard feature or if the code can be published somewhere so we can update it ourselves would be great. Any EU company which is VAT registered has to comply with these VAT rules, so should be of interest to quite a few users of WHMCS. Many thanks, Edith

 

I have uploaded the code you would need to automatically set clients to be tax exempt when they signup if they provide a VAT or Tax ID Number in a custom field @ http://forum.whmcs.com/showthread.php?t=7788

 

Matt

[othellotech]

I believe the EU VAT rules states that no VAT it to be charged "if" both companies agree to this.

Other way round - you *can* still charge VAT to an out-of-country EU VAT region client who has provided their VAT details.

 

There are 2 scenarios

 

The most common is that you have UK HMCRE permission to charge blanket-VAT on all transactions, which they will give to small business that have had to VAT register for reaching the threshold, and where all systems are automated (as legally you're obliged to take steps to validate the VAT numbers provided before you issue an invoice without VAT) - its quite common for "mail-order" companies.

 

The other is something to do with (IMHO dodgy) tax fiddles for international companies who can be invoiced to head-office in one country but internally paid from another country with different taxation, and ISTR relates to them trying to only make a profit from a division in a country with low corporate tax rates, but still handle a central accounts/management system

[dsaunier]

I have been working on that question for some time, mostly on custom sites developed by my team, and in the OSCommerce project. The way we manage that for our France-based sites is that we have :

- orders from France : VAT added

- orders from within the EEC : VAT added UNLESS the client provided a VALID VAT number. The law requires us to check the provided number is valid, or we'd be asked to pay the VAT for such orders ourselves. So we use a PHP script that remotely connects to the official European VAT server and based on the client country displays whether the provided # is valid, in which case no VAT is added, else it is. I have since seen that behavior on a few software ordering sites.

- orders from outside EEC : no VAT.

I hope it helps.

[SHGreg]

....

- orders from France : VAT added

- orders from within the EEC : VAT added UNLESS the client provided a VALID VAT number. The law requires us to check the provided number is valid, or we'd be asked to pay the VAT for such orders ourselves. So we use a PHP script that remotely connects to the official European VAT server and based on the client country displays whether the provided # is valid, in which case no VAT is added, else it is. I have since seen that behavior on a few software ordering sites.

- orders from outside EEC : no VAT.

I hope it helps.

That's exactly how I would expect a VAT system to operate I was about to have a hunt for this VAT server, I'm happy to hear it exists and we can connect to it to check the numbers.

[dsaunier]

That's exactly how I would expect a VAT system to operate I was about to have a hunt for this VAT server, I'm happy to hear it exists and we can connect to it to check the numbers.

 

Well if I can avoid you the hunt and this is a useful feature to add for several WHMCS clients (in fact that VAT behavior is a legal requirement for my French company) then I guess I could consider providing the script we have.

I am still studying if WHMCS has no blocking limitation that would prevent us from migrating our main site to it, with the most annoying one being the encoded pages for now...

[dsaunier]

Just to bump this thread, is there a way we could put together the required config for Europe business that have to charge VAT ? Reminder :

 

You should charge VAT at your countries rate to private customers (non-VAT registered) from other countries within the EU, but not charge businesses from other EU countries who are VAT registered in their country.

 

True only if the said business provides its registered VAT number.

 

We only deal with businesses so it's pretty straightforward for us.

 

For me it is not, as for example with Uk Ltd companies that do not have to be VAT-registered, our site expects a valid VAT number, OR charges it.

 

First I guess the need is to have the proper table (tbltax) filled with the list of countries that require VAT to be paid - meaning "orders from within the EEC", see above. Can anyone provide a mysql dump ?

Then there is the VAT number remote checking that I could help with, as one our site has that built-in feature. I guess that should be an option though, just in case someone wishes to turn it off or the customs server fails or changes.

 

Who else is in that case and needs EEC VAT rules ?

 

Thanks.

(By the way I knew we had discussed this before, but fought to locate those threads, as the forum provides no search result for VAT, Tax or EEC - probably too short but it does not mention it !)

[UH-Simon]

First I guess the need is to have the proper table (tbltax) filled with the list of countries that require VAT to be paid - meaning "orders from within the EEC", see above. Can anyone provide a mysql dump ?

 

Only takes 5 minutes to add the 27 EU countries as VAT tax rules

 

http://en.wikipedia.org/wiki/Eu_member_states incase you need a list

[dsaunier]

Only takes 5 seconds to do an SQL query to add them all in the table, which is why I asked

Anybody interested in that rule ?

[cenourinha]

Hi there,

 

I would like to confirm a situation. If we have a customer from a country outside of the EU member states, should or shouldn't we charge the VAT Tax? Is there any exclusive rule for our market?

[WHMCS John]

Hi,

 

This is really a question for your accountant, but it is my understanding that EU companies do not need to charge VAT to customers who are outside the EU

.

Our EU VAT Invoices addon takes the hassle of setting up the necessary tax rules, doing it all in just a single click: http://www.whmcs.com/appstore/219/EU-VAT-Invoicing-Addon.html