ChannelEngine: VAT settings

About this article

This article describes the usage of VAT settings within ChannelEngine.

Table of contents

Summary

VAT settings on ChannelEngine

Custom VAT settings

Summary

Marketplaces expect your prices to include value-added tax (VAT). Therefore, orders coming from marketplaces also have order/order line totals including VAT (regardless if this concerns regular VAT, reduced VAT, super-reduced VAT, or VAT exempt).

Most marketplaces do not provide the calculation (except Amazon's optional VAT Calculation Service), leaving this matter entirely to the merchant.

ChannelEngine offers the option to calculate the VAT on orders, however, this requires you to add your VAT number to your ChannelEngine account – where applicable. On 1 July 2021, the European Union (EU) replaced the previous per-country threshold system with a single, EU-wide threshold of EUR 10,000. Below this threshold, the distance sales of goods within the EU remain subject to VAT in the member state where the taxable person is established.

Note this threshold applies solely to sales to end consumers (B2C), not to other businesses (B2B).

VAT settings on ChannelEngine

1. To add your VAT number to ChannelEngine, select Settings, VAT rate settings.
2. Select Edit (the pencil icon) on the right-hand side for every country you wish to add a VAT number to.
3. Enter your VAT number, select Enable VAT rule, and select Save.
   NB: ChannelEngine validates international VAT numbers using the VAT Information Exchange System (VIES). However, some countries (e.g.: Germany and Spain) also have local VAT numbers. Those cannot be verified – and result in an error when you try to save related changes on ChannelEngine.
4. If the VAT number is correct according to the VIES, you see a confirmation message and the VAT information.
5. In the overview, you can see the VAT number accompanied by a green checkmark.
6. Repeat this step for any additional countries you have a VAT number for – and need to have the VAT calculated for.
7. Note that the VAT calculation only applies to new orders, not to existing orders. ChannelEngine never edits existing orders.

It is not mandatory to use ChannelEngine's VAT calculation. As ChannelEngine only has insight into the total sales via connected marketplaces, it cannot determine with certainty if the threshold has been reached or not. If you want to use your own VAT calculations, you can use the original fields from ChannelEngine, which contain the exact order values as they have been received by the marketplace (i.e.: without any VAT calculation or currency conversion). Below is an example of a return via ChannelEngine's merchant API:

"SubTotalInclVat": 49.99,
      "SubTotalVat": 8.68,
      "ShippingCostsVat": 0,
      "TotalInclVat": 49.99,
      "TotalVat": 8.68,
      "OriginalSubTotalInclVat": 49.99,
      "OriginalSubTotalVat": 8.68,
      "OriginalShippingCostsInclVat": 0,
      "OriginalShippingCostsVat": 0,
      "OriginalTotalInclVat": 49.99,
      "OriginalTotalVat": 8.68,
      "Lines": [
        {
          "Status": "IN_PROGRESS",
          "IsFulfillmentByMarketplace": false,
          "MerchantProductNo": "269-703-60",
          "Gtin": "4251234428221",
          "UnitVat": 8.68,
          "LineTotalInclVat": 49.99,
          "LineVat": 8.68,
          "OriginalUnitPriceInclVat": 49.99,
          "OriginalUnitVat": 8.68,
          "OriginalLineTotalInclVat": 49.99,
          "OriginalLineVat": 8.68,
          "BundleProductMerchantProductNo": null,
          "ChannelProductNo": "2300786794",
          "Quantity": 1,
          "CancellationRequestedQuantity": 0,
          "UnitPriceInclVat": 49.99,
          "FeeFixed": 7.5,
          "FeeRate": 0,
          "Condition": "NEW"
        }

Custom VAT settings

If you sell products that do not fall under your VAT country's standard rates, such as children's car safety seats in the Republic of Ireland, you can set a custom VAT rate on ChannelEngine.

To add a custom VAT rate, do the following:

1. Go to VAT settings, Custom VAT. You are presented with an overview of your existing custom VAT rates if any. Click + Add.
2. Enter a name for the custom VAT rate.
3. Add a VAT rate, without the percentage symbol. E.g.: 10.
4. Add one or more countries in which the custom VAT rate applies. Only orders from those countries have their VAT overridden by the custom VAT rate you set.
5. Select the products to which the custom rate applies under the Select products area, using the same rule-based system found in the product selection and categorization sections. Once your rules are defined, you can check the full list of products to which it applies under the Products area.
6. Click Save.