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The correct way to set up VAT

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René Poulsen
René Poulsen
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Posted on 02/05/2018 14:40:38

Hi,

I'm having some trouble setting up VAT the right way. I have a shop in two countries - Denmark and Germany. Danmark has VAT of 25% and Germany 19%. I want the price entered on the products to be including tha VAT. So lets say I have a product with a price of 4,60 DKK - then the 4,60 is entered on the product in eCommerce. I want to show that as the price in the frontend as well. In the cart I want to be able to show the total VAT amount.

There is several places in settings (DW9) > ecommerce where I'm able to enter information about the VAT:

  • Settings > Ecommerce > Advanced > Prices
    • System VAT (this isn't language specific, so I guess I can ignore this setting and set it to 0.
    • Prices in the database include VAT - I've checked this one becuase, as I understand, this means that the prices entered in products in eCom should be including tha VAT - so this is my 4,60.
  • Settings > Ecommerce > Internationalization > Countries
    • For each country I'm able to set a VAT percentage. Should I do this and choose the countries on the websites/language areas?
  • Settings > Ecommerce > Internationalization > VAT groups
    • On the standard VAT group I'm able to set a VAT percentage for each country. Should I do this instead of setting it on the countries and use this VAT group on the product groups?

I've tried some different combinations of the above - without any luck. I got the danish site working with the advanced > prices, but then the german site showed wrong prices. I've tried with the others as well, but then the WithVAT tag and the WithoutVAT tag gave the same price. Anyone who can explain me the most simple way to obtain what I want (which is just to be able to show price with and without vat - for two countries with different VAT-rates)?

Thanks in advance.


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René Poulsen
René Poulsen
Posted on 02/05/2018 14:56:25
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UPDATE: If i set System VAT to 25% + set the country VAT to 25% on DK and still check the "Prices in the database include VAT" it works like a charm on the danish site - 4,60 is shown as the price and the WithoutVAT tag gives 3,68 as the price. So far so good.

On the german site, the product price is 0,55. If I don't set any country VAT for DE country the price shown (with the WithVAT tag) is 0,44 - which is 25% below. If I set the DE country VAT percentage to 25% 0,55 is shown as the price - which is correct. But I don't want the German VAT to be 25%, so I try to change it to 19% on the country which results in showing a price of 0.52 - that's the price - 6% (25% - 19%). What am I doing wrong? :-)

 
René Poulsen
René Poulsen
Posted on 02/05/2018 15:03:02
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And one more update: If I set the System VAT to 0% and just set the country VAT to 25% on DK and 19% on DE, the WithVAT tag is no longer the entered value in Ecommerce (e.g. 4,60 and 0,55) but these values + the VAT set on the countries. I checked the website ecommerce settings for the two website - both has the "Prices with VAT" checkmark set.

 
Kim Søjborg Pedersen
Posted on 02/05/2018 15:36:56
Reply

HI René
When you have countries with different VAT you can't use "Prices in the database include VAT". The reason is that there is only one "System VAT" field in DW

Regards
Kim

 

 
René Poulsen
René Poulsen
Posted on 02/05/2018 15:50:21
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Hi Kim,

What is the setting on the website then for? In there I have a "Prices with VAT" as well (see attached file). Is this only for use with the System VAT?

vat.jpg
 
Kim Søjborg Pedersen
Posted on 02/05/2018 16:01:14
Reply

Hi René 

I'm not sure about that, but like you I spend a lot of time figuring this out on my last project, and the conclusion was use only prices excl. vat if you have countries with different VAT. 

 
Nicolai Pedersen
Posted on 02/05/2018 23:06:08
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Hi René

As kim has written, you should only seldom be having prices in the database including VAT - like in you ERP system. VAT is not a real part of the price - it differs depending on a range of things like country and vat group. So in order to calculating back from a price in DKK with DK vat to EUR and German VAT, we need both information on the price in the database. The database only holds the price and sometimes currency (Prices table). To be able to calculate right using prices with VAT we would need the price and VAT% for each price, making it difficult to import.

The VAT setting on website properties controls rendering. You have a number of rendering tags - like PricewithVat and PriceWithoutVat and Price. The first 2 are always with or wihtout vat where as the Price tag is depending on that setting. It is usually used in webshops selling b2b and b2c. The b2b customers want to see prices excluding vat and vice versa. You can switch between rendering method by adding ?PricesWithVAT=True|False in the querystring.

You can by the way find all of this including the warning on handling VAT in the docs: https://doc.dynamicweb.com/documentation-9/ecommerce/payment-shipping/vat-taxes

BR Nicolai

 

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