Reverse charge for VAT
As per EU-legislation, B2B shops are allowed to sell goods and services across EU-borders without charging VAT if the buyer has a valid VAT number. Please note, that it is the responsibility of the seller to ensure that the customer has a valid VAT number, for example by using the VIES service.
To activate Reverse Charge for VAT – which basically means turning off VAT for select customers – you must:
- Open the website Ecommerce-settings and set Reverse Charge for VAT to Yes
- If Reverse Charge for VAT should apply to all products sold in a country open the Country and check Reverse charge for VAT
- If Reverse Charge for VAT should apply only to a subset of products you can create VAT Groups and assign products to them with the Reverse Charge for VAT checkbox checked for countries in the EU which is not your own
- On each user with a valid VAT number check the Reverse Charge for VAT checkbox (you should verify that the number is valid)
Then, when a customer with the Reverse charge for VAT checkbox checked goes through checkout, products in a VAT group with Reverse charge active for the customer country will not incur VAT, provided that Reverse charge for VAT is set to true in the website Ecommerce settings of the website or language layer where the purchase is made.
Registered customers without Reverse Charge for VAT set will be charged the VAT rate specified on the VAT Group. Anonymous customers will not be charged VAT (please verify that they have a valid VAT number).