Using EuVat with Customer Tax Classes
1. Setup Customer Tax Classes
Create 4 different Customer Tax Classes, which later will be assigned to your customers according to their EuVat status:
- A Customer Tax Class for customers in the stores home country.
- A Customer Tax Class for customers identified as EU Businesses (with validated EU VAT ID).
- A Customer Tax Class for customers identified as EU Enduser/Consumer (or EU Business where the EU VAT ID did not validate).
- A Customer Tax Class for customers outside of the EU.
In this setup all Customer Groups assigned to your customers stay untouched and can get used for other store functions like pricing or cart rules.
Magento 1: Sales » Tax » Customer Tax Classes
Magento 2: Stores » Tax Rules
You need to open an existing Tax Rule, or add a new Tax Rule to get access to the Customer Tax Classes under Additional Settings of the Tax Rule:
2. Create Tax Rates
For basic operation of your Shop with EuVat only 2 Tax Rates are sufficient, one with the applicable VAT and one without VAT. Create the two Tax Rates in your store, see this example for the Tax Rates applicable for a store in Austria:
Magento 1: Sales » Tax » Manage Tax Zones & Rates
Magento 2: Stores » Tax Zones & Rates
You may also create any other Tax Rates and Rules in your shop, using the Customer Groups EuVat is using for customer classification, as required by your countries regulations or shop functions.
3. Create or Update your Tax Rules
Now assign Tax Rules for the different Customer Groups, the respective Customer Tax Class and maybe also Product Groups:
- Create the Tax Rules such that for Customer Tax Classes of all EU-Consumers the Tax Rate of your country is applied, as well as for all customers of your Stores Default Country.
- And such that all other Customer Tax Classes used by EuVat shall generate a Tax Excempt:
Magento 1: Sales » Tax » Manage Tax Rules
Magento 2: Stores » Tax Rules
So for example:
For Austria the rules for online business are (in line with the related EU Regulation):
- Charge 20% VAT to any order from a Customer with his Billing Address in Austria (regardless if Enduser or Business)
- Charge 20% VAT to any order from a Enduser with his Billing Address outside of Austria and inside of the EU
- Do not charge the 20% VAT (VAT excemption) for a Business with his Billing Address outside of Austria and inside of the EU, however the Customer has to have a valid EU VAT-Identification
- Do not charge the 20% VAT (VAT excemption) for any customer with his Billing Address outside of the EU, thus the rest of the World.
You may also create any other Tax Rates and Rules in your shop, using the Customer Groups EuVat is using for customer classification, as required by your countries regulations or shop functions. For example to add Tax Rates for specific countries, for more on this see here too...
4. Set the default Customer Tax Class for Customer Groups
You need to select a default Customer Tax Class for the Customer Groups of your store, especially for the “NOT-LOGGED-IN” Customer Group representing the default store visitor. We recommend to set the default Customer Tax Class to the tax class created for the Store Home Country customers:
If you also use Customer Groups to differentiate Business Customers, use the related Tax Class for the EU Business as default Tax Class for that customer groups.
5. Configure the Customer Tax Classes to use with EuVAT
Set these Customer Tax Classes to be used by EuVAT for the different customer classification:
System » Configuration » Tax » EU VAT Calculation
Also set the configuration option Assign Customers to Customer Groups to No and leave Customer Group unchanged.