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Dec 1, 2018
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Setting Up EU VAT Rates for Digital Products

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EU VAT regulations for digital goods changed on January 1, 2015, affecting only B2C transactions.

EU VAT regulations for digital goods changed on January 1, 2015, affecting only B2C transactions. The VAT should be calculated on the digital goods based on the customer’s location, and you have to gather evidence of this through IP address and/or billing address.

In addition, you need to set the VAT rates in your WooCommerce store to charge the right amount. This guide shows you how to set specific rates for digital goods.

Establish Your Tax Classes

If you are selling only digital goods, VAT rates in WooCommerce can be added under standard rates.

If you are selling/distributing both digital and regular products, you can create and use a new tax category, for example, Digital Goods, and update them.

To set EU VAT rates in a new tax category:

  1. Visit : WooCommerce > Settings > Tax .
  2. Select Additional Tax Category Settings.
  3. Add a new tax class to the list, for example, digital see in the screenshot
  4. Save.

Once saved, you can start assigning this tax class to digital goods, but input the rates first.

Input Rates Setting Up EU VAT

  1. Visit : WooCommerce > Settings > Tax > Digital Goods (Now you create a new tax category after the new tab).
  2. Enter for all EU member states.

At the time of writing, they were:

COUNTRY CODERATE %
GB20.0000
BE21.0000
BG20.0000
CZ21.0000
DK25.0000
DE19.0000
EE20.0000
EL23.0000
ES21.0000
FR20.0000
HR25.0000
IE23.0000
IT22.0000
CY19.0000
LV21.0000
LT21.0000
LU17.0000
HU27.0000
MT18.0000
NL21.0000
AT20.0000
PL23.0000
PT23.0000
RO24.0000
SI22.0000
SK20.0000
FI24.0000
SE25.0000

Alternatively, if you have a CSV file in the correct format, you can import VAT rates to save time. Tax Class Digital Goods: The above rates are in CSV format with tax_rates.csv

To import this file, click the ‘Import Rates’ button on the tax input page, and an importer will appear then you can import the Rates.

Setting Up EU VAT

Once you upload and import and input your rates, then you should see a table similar to this:

Setting Up EU VAT

With the establishment of EU VAT rates, users who buy a product with the digital goods tax category are taxed on their location, rather than the store location.

Specify The Tax Class To Products

To apply this tax class for digital products in WooCommerce:

  1. Go to: Products > Products.
  2. Edit Products Select
  3. Digital Goods from the Tax Class dropdown.
  4. Save.

Setting Up EU VAT

You can also bulk-edit products:

  1. Go to: Products > Products.
  2. Tick the box on the left of each of the products you want to edit.
  3. Select Edit from bulk action dropdown.
  4. Apply.
  5. Set the Tax Class in the drop-down menu.
  6. Update.

Setting Up EU VAT

Also Read,

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