Unfortunately the new VAT requirements specifically forbid what you are requesting.



Under the new requirements the price presented to the EU buyer must be the final price, no additional amount to cover VAT can be added to that price or the order total before checkout.



Unfortunately we also cannot determine the buyer's location to make any advance price adjustments before checkout occurs. Thus VAT is being collected out of the existing price instead of being added as an additional cost as it was before.



This does create a scenario where merchants are forced to choose between taking a loss on EU sales, increasing prices slightly for everyone, cutting off sales to the EU entirely or setting different prices for buyers in the EU and trust that they will use that price set as opposed to your normal prices.



We don't feel that any of those scenarios are ideal or fair, but we are not in control of the EU's behavior. There is also the fact that the EU does not have any jurisdiction or infrastructure in place to enforce or collect their taxes from merchants outside the EU.



Our recommendation to raise prices is not to pay VAT on every single order but to just bring in enough additional revenue to offset the cost of paying VAT out of your regular item price for sales in the EU. This appears to be the easiest response with the least cost and trouble to the merchant, but we cannot help determine what the price increase should be as we do not know how many sales a given merchant can expect to make in the EU in a year or how the VAT cost will impact their bottom line.



Alternately you can look into blocking digital sales into the EU by treating your digital products as shippable items and rejecting attempts to ship to EU countries. To block sales to buyers in the EU, you can enable Shipping/Buyer's Address in the settings of each product, then go to Seller Admin > Cart Shipping Settings, specify your country and ZIP code (if you're outside the US, just enter 00000 here), then in the Shipping Destinations list select every country you're willing to sell to. Then click Next to apply changes and proceed to the following screen, where you can disregard any settings there and just click Back to Admin. Make sure you're using your E-junkie Add to Cart buttons (not Buy Now buttons), as this method restricts the countries available for buyers to select in your shopping cart.



When selecting Shipping Destinations, if you're willing to sell to any country outside the EU, click the first country in the list, then scroll to the end, hold down your Shift key and click the last country in the list to should select everything; then hold your Ctrl key (on PC) or Command key (on Mac) and click each EU country to deselect them (see https://en.wikipedia.org/wiki/EUStates for a list).



If you would prefer to offer higher prices only to residents of the EU it is possible to do so without creating duplicate products, our help page here goes over how to adjust prices on products to create buttons which charge more for the same item so that you can create a mirrored sales page for EU buyers separate from the rest of the world:

http://www.e-junkie.com/ej/tips.tax.vat-pricing.htm

Awesome instructions E-JunkieMonster! Thank you for posting.



I'm not very handy with codes, so please excuse me if this is a silly question: If I used the E-Junkie blocks as you suggested above would I have to update my codes? I use the Add to Cart buttons.



I'm not ever certain that PayPal is doing what I need. :-/

If you prefer to block EU buyers using our shipping settings then you do not need to update your existing Add to Cart buttons.



What you will see after making the changes is that your cart will ask for the buyer's country and postal code before allowing checkout, and any countries you wish to exclude will not be available as selections.

Hm...



That might deter the customers I have. Right? Or is this widely enough used in the download markets that customers would expect this?



Thank you for your help.

Oh. I meant to say that I'm glad that I would not have to change the Add To Cart buttons. That is super helpful.



It doesn't seem that EDIT THIS POST is working at the moment.

Thank you for this note.

Is there a way to unsubscribe from threads? I can't find an option to do that.



EDIT: No worries I've just seen that if I don't press on the link in the email there will be no further updates.

I just posted an update regarding the new Transaction Log fields and Thank-you Email/Page template tags we now support for VAT purposes:

http://www.e-junkie.com/bb/topic/6940/pg/2#post25699

I may have missed this or misunderstood something, but is it possible to receive the buyer's billing address in the IPN received from E-Junkie? I'm talking about the one sent to "Payment Variable Information URL".



Because I'm not receiving it right now, so I don't understand how I'm supposed to collect this data (automatically).



I'm using a Buy Now button, not Add To Cart.

PayPal does not report the buyer's full billing address back to us; they only specify the buyer's Residence country (country where their PayPal account is registered -- effectively their billing country), which we transmit to custom/third-party Integration URLs as the 'residence_country' variable (same field name as in actual PayPal IPNs).

Yep, thanks, I'm picking residence_country up.



So it seems that I have to add a billing address capture form before payment?

You could try that, perhaps using our Variations feature to provide text fields for the buyer to fill in before they click Add to Cart:

http://www.e-junkie.com/ej/help.variants.htm



Non-PayPal checkout methods such as 2Checkout would capture a billing address which is then stored in your E-junkie Transaction Log, although at present we have no way to transmit that to an Integration URL.



That said, presumably you're seeking a billing address for VAT documentation purposes, and it appears you're in the UK, so it may interest you to know that HMRC has conceded that the buyer's registered Residence country reported by the payment processor (e.g. PayPal) is an acceptable piece of location information to obtain the required match between at least 2 such pieces of information:

1http://euvataction.org/2014/12/29/hot-off-the-press-concession-from-uk-hmrc-will-enable-more-firms-to-keep-trading/1



I.e., if you have that item, you don't necessarily need to also obtain a full billing address in particular, but you do still need to obtain a 2-way match among that and at least 2 other acceptable pieces of information about the buyer's location.



To determine the buyer's place of supply for digital items, our VAT calculation feature will look for any 2-way country match between a GeoIP lookup of the buyer's connection IP, their Billing address (or Residence country for PayPal checkouts), and the buyer's self-declared country in the cart (or Shipping address for other tangible items in the same order).



If you're using our VAT calculation feature, your E-junkie Transaction Log will capture all the data necessary to document the buyer's place of supply for digital goods, so you shouldn't need to reinvent that particular wheel at your end -- see full details here:

http://www.e-junkie.com/ej/help.tax.htm

Right now, because I'm not convinced the regulations will not be relaxed, I'm keeping things as simple as possible and just swallowing the VAT hit. I'm crossing my fingers for a nil rate.



I already receive the residence country and buyer IP. So are you saying that is good enough, so long as they match? According to your third para yes, according to your fourth, no ("at least two other acceptable pieces of information").

The new VAT rules for establishing the buyer's location as the place of supply for digital goods require collecting at least 3 different pieces of information about the buyer's location, from which any 2 non-conflicting pieces of information would be sufficient to identify the buyer's location for VAT purposes.



If you do not enable VAT, we do still record the buyer's IP with a GeoIP country lookup for that IP, as well their PayPal Residence country, so you're probably safe as long as those GeoIP and Residence countries happen to match. However, if those don't match for any particular sales, and if you ultimately wind up subject to pay VAT, those sales would pose a problem for you in calculating and filing VAT.



Really, there's no downside to enabling our VAT calculation, and we'd recommend you do so if there's any chance your sales may wind up subject to VAT. This will ensure that all the required location information is collected and recorded (we even log the 2-way match result for you), and although we'd calculate what portion of the total prices paid would constitute VAT, you can simply disregard those amounts if you ultimately determine you are not obliged to pay VAT.



The VAT amounts we calculate are not normally shown to buyers at any point (unless you deliberately use our thank-you email/page template tags to do so), and nothing is withheld for VAT from the payments you receive. You don't even necessarily have to raise your prices to cover VAT overhead if you'd rather have us just calculate VAT out of your existing prices and take the gamble that you might wind up getting to keep those amounts.

I use the Buy Now buttons though... I didn't think your VAT calculations apply to them.



I don't want to add an extra layer of "shopping cart" in the way of a purchase.



If I were to enable this, is it as simple as selecting my location (UK), and clicking "Charge VAT"?

Sorry, the shopping cart step is still necessary for VAT charges. We don't have any way to handle VAT calculations through the Buy Now buttons.

I'm sorry to raise the New EU VAT rules spectre again but..............



Re: "so it may interest you to know that HMRC has conceded that the buyer's registered Residence country reported by the payment processor (e.g. PayPal) is an acceptable piece of location information to obtain the required match between at least 2 such pieces of information:" This concession will only apply until 30th JUne 2015 - see http://euvataction.org/2014/12/29/hot-off-the-press-concession-from-uk-hmrc-will-enable-more-firms-to-keep-trading/ for details.



Also, Etsy (and several other platforms like Folksy) are now taking on board the new rules in that they are collecting and remitting the VAT - see 1https://blog.etsy.com/en/2015/update-european-union-rules-on-digital-item-sales-2/1 - the extract below is from them:



"In a recent blog post, we announced that we will be collecting and remitting VAT on behalf of Etsy sellers based in EU countries who are providing digital goods to buyers in the EU by automatic download. We are now announcing that we will collect and remit VAT on behalf of all Etsy sellers providing digital goods to buyers in the EU by automatic download, whether or not the seller is based in the EU. That means you won’t have to process VAT returns on automatically downloaded digital items sold on Etsy to buyers in the EU, no matter where your shop is based.



To be clear, your EU buyers – not Etsy or Etsy sellers – will be paying VAT as part of their total purchase price. We’re working on the site update needed to begin collecting VAT during checkout and will provide more details on how the collection process will work soon. If you’re wondering if you should list your digital items, please know that Etsy will take responsibility for collecting VAT and remitting it to the appropriate tax authority.



If you have more questions about VAT on digital items, check out our responses to these Frequently Asked Questions. Please keep in mind that we can’t give legal or tax advice to individual businesses, so we encourage you to contact your local governments or professional advisors for specific advice related to your shop."



Pleas also see - http://www.businesszone.co.uk/topic/finances/vat-moss-how-paypal-etsy-and-others-are-preparing/58804 - for further discourse on this subject.



In view of the above, can e-junkie please explain how the services they offer and supply differ from those provided Etsy?



With thanks,



Mike















https://www.gov.uk/government/publications/vat-supplying-digital-services-to-private-consumers/vat-businesses-supplying-digital-services-to-private-consumers

Hi Mike,



The big difference is that Etsy processes their own payments, which is why they can collect and remit VAT even when they work with PayPal. E-junkie is not a payment processor so it is not possible for us to collect or send out any funds at all.

Hello E-Junkie Monster!



I really hate to be contradictory or confrontational, and I take on board what you state about Etsy but the whole thing lies on on what HMRC states on this matter which is:



"Digital portals, platforms, gateways and marketplaces



If you supply e-services to consumers through an internet portal, gateway or marketplace, you need to determine whether you are making the supply to the consumer or to the platform operator. If the platform operator identifies you as the seller but sets the general terms and conditions, or authorises payment, or handles delivery/download of the digital service, the platform is considered to be supplying the consumer. They are therefore responsible for accounting for the VAT payment that is charged to the consumer." Extract taken from the link below (at the bottom):





https://www.gov.uk/government/publications/vat-supplying-digital- services-to-private-consumers/vat-businesses-supplying-digital- services-to-private-consumers



Interpreting this:



If you supply e-services to consumers (which is me) through an internet portal, gateway or marketplace (which is you), you (I) need to determine whether you are making the supply to the consumer or to the platform operator. (I'm making the supply to the platform operator in the form of e-books who then supplies the consumer) If the platform operator identifies you as the seller but sets the general terms and conditions (which you do), or authorises payment (which is you), or handles delivery/download of the digital service, (which is you) the platform is considered to be supplying the consumer. They are therefore responsible for accounting for the VAT payment that is charged to the consumer.



The crux of the matter is the use of the word 'or' in the guidance. It is not saying that ALL the conditions must be met before responsibility is accepted but that if ANY condition is met, then follows the responsibility.



In my undedrstanding, Etsy is not a payment processor as they rely on PayPal for this.



Over to you in the nicest possible way :-),



Mike