Inclusive/Exclusive VAT

[Sven]

Hi,

 

 

Currently I'm using Clientexec, but because of a few issues I'm looking for something else.

I got the following question:

 

My company is located in Belgium and the rules here about VAT are as follows:

Everyone of the E.U. needs to pay VAT, BUT if the customer has a VAT number (so

it's a company) and lives in a country outside the country where the company is

in (in my case, Belgium), the customer may not pay VAT.

 

This rules are also used in other E.U. countries, like the Netherlands.

 

So the sign-up/invoice generator script needs to check if the customer lives in another country and has a VAT number so that the VAT doesn't get generated.

[s1rk3ls]

Pardon me for tagging onto this one - but as VAT/Tax support is being implemented in the next version which has been promised soon, I wanted to ask a very similar question of the Tax support.

 

In the US, you are only required to charge sales tax to customers in your state - If someone outside of your state purchases hosting, it shouldn't be charged... Will there be an option to either automatically (based on country/state requirements) or manually (per client) choose who gets charged the extra percentage?

[ozzie]

Hi,

 

I was tricked by this thread's heading (inclusive/exclusive).

 

We have the same issue here {Australia (10%)} althought we call the thing GST (Goods and Services Tax), the requirements are the same.

People with country code = "AU" pay the tax, everyone else doesn't.

 

In addition to an add-on tax, I can also think of a system wide parameter that indicates if the Tax is an add-on or included in the sell price.

e.g. tax = 10%, advertise your price as $11.00 and the billing module bills

100/110 * 11.00 = $ 10.00 for the product

10/110* 11.00 = $ 1.00 for the GST/VAT

total invoice $ 11.00

 

Although I could live with an add-on solution only, the inclusive option would make me very happy.

 

Cheers from Downunder,

 

Ozzie

[Matt]

Hi,

 

You will be able to configure tax zones based on a country and state. A tax zone can apply to all countries or just one country, all states or just one state within that country.

 

With the first release that supports tax, only "add-on" tax as ozzie calls it will be possible so products will be entered in the system excluding tax from their price and this will then be calculated by WHMCS based on the tax rate.

 

Regards,

 

Matt

[ozzie]

But in V3 BETA R2 all is sorted and you can select

"Tax Exclusive" or "Tax Inclusive".

 

Thanks Matt!

 

Ozzie

[Sven]

And what about the customers in the E.U.?

In the E.U. you may not generate a tax for company's in foreign country's.

 

So it would be great that this feature would be implemented:

A client fills in his/her VAT number and chooses his country (≠countryofmycompany) => gets an invoice without VAT.

When he fills in his/her VAT number but chooses the same country as the country where my company is in, he gets an invoice with VAT.

[Matt]

This is what's possible right now. You configure the countries and states that get charged VAT in Configuration > Tax Setup.

[ozzie]

Matt,

 

I think the emphasis here is on

client fills in his/her VAT number

In Oz it's the other way around and a client can be tax exempt

so if they fill in their taxexemption number they are not charged.

All these different requirements are getting very messy.

 

You might want to consider creating a Tax Flag on the client record, like we already have on product level. It would then be up to the Admin to set the flag depending on local law requirements and the info that the customer has provided.

 

I think that our European friends could work with that and so could we Downunder in Oz and New Zealand (NZ has got GST as well).

 

Cheers from Downunder,

 

Ozzie

[MACscr]

We don't have the best tax system in the US, but your socialist systems are getting ridiculous. It completely hampers small businesses and honest tax payers. I feel for you guys.

[ozzie]

We don't have the best tax system in the US, but your socialist systems are getting ridiculous. It completely hampers small businesses and honest tax tax payers. I feel for you guys.

And that's only about collecting the tax... There's also monthly or quarterly or annual GST tax returns.

 

They are just using us as (free) tax collectors.

 

Cheers,

 

Ozzie

[Matt]

There is a checkbox you can enable on a per client basis to overide any tax settings and not charge tax. It's next to the "Credit" field in the clients profile.

 

Matt

[ozzie]

There is a checkbox you can enable on a per client basis to overide any tax settings and not charge tax. It's next to the "Credit" field in the clients profile.

That's brilliant. All I have to do is create a custom field for the tax exemption number and we're in business.

 

Cheers,

 

Ozzie

[ozzie]

My company is located in Belgium and the rules here about VAT are as follows:

Everyone of the E.U. needs to pay VAT, BUT if the customer has a VAT number (so

it's a company) and lives in a country outside the country where the company is

in (in my case, Belgium), the customer may not pay VAT.

Hey Sven,

 

Just for my understanding,

are you saying that if your customer is in say Holland, he does pay Belgian VAT if he's a private person and does not pay it when he's a company (with a VAT number)??

 

If that's the case, things have certainly changed since I fled to Oz

 

Greetings from Downunder,

 

Ozzie (ex Ollander)

[Sven]

My company is located in Belgium and the rules here about VAT are as follows:

Everyone of the E.U. needs to pay VAT, BUT if the customer has a VAT number (so

it's a company) and lives in a country outside the country where the company is

in (in my case, Belgium), the customer may not pay VAT.

Hey Sven,

 

Just for my understanding,

are you saying that if your customer is in say Holland, he does pay Belgian VAT if he's a private person and does not pay it when he's a company (with a VAT number)??

 

If that's the case, things have certainly changed since I fled to Oz

 

Greetings from Downunder,

 

Ozzie (ex Ollander)

 

Yup, and I would be very happy if you set this feature priority one (in a matter of speaking), I mean, you will gain much more customers from the E.U.

[ozzie]

Yup, and I would be very happy if you set this feature priority one (in a matter of speaking), I mean, you will gain much more customers from the E.U.

OK, so you could set up a tax rule for each EU country and create a custom Client field for the VAT number.

If the client quotes a VAT number set the tax exempt flag in the client record.

(Wouldn't be too hard to do with SQL either. Maybe as a little cron job to run before the WHMCS Cron?)

 

Cheers,

 

Ozzie

[Sven]

Yup, and I would be very happy if you set this feature priority one (in a matter of speaking), I mean, you will gain much more customers from the E.U.

OK, so you could set up a tax rule for each EU country and create a custom Client field for the VAT number.

If the client quotes a VAT number set the tax exempt flag in the client record.

(Wouldn't be too hard to do with SQL either. Maybe as a little cron job to run before the WHMCS Cron?)

 

Cheers,

 

Ozzie

 

"set the tax exempt flag in the client record.", how do I do that?

[ozzie]

"set the tax exempt flag in the client record.", how do I do that?

In V3 there's a tick box in the client profile next to the credit field like:

Credit $[ ] [ ] Tax Exempt

 

As I said, won't that hard to in a SQL job either.

 

Hope this helps,

 

Ozzie

[Sven]

"set the tax exempt flag in the client record.", how do I do that?

In V3 there's a tick box in the client profile next to the credit field like:

Credit $[ ] [ ] Tax Exempt

 

As I said, won't that hard to in a SQL job either.

 

Hope this helps,

 

Ozzie

 

 

But a company of Belgium has to pay VAT (in my situation, since my company is also situated in Belgium), so I probably can't do it with the tax exempt flag..?

[ozzie]

But a company of Belgium has to pay VAT (in my situation, since my company is also situated in Belgium), so I probably can't do it with the tax exempt flag..?

Sheesh, for those you would NOT set the tax exempt flag wouldn't you?

LIke:

 

IF tax rule exist //Someone from an EU country marked for tax
...IF country <> Belgium AND VATNo quoted //this is FALSE in above case
...set tax exempt flag
...ENDIF
ENDIF

 

(the ... is only for indentation since this editor ignores spaces)