Charging Sales Tax and VAT

How to Charge Sales Tax or VAT in E-junkie Cart

You can use this feature to calculate Sales Tax to add in your E-junkie shopping cart before the buyer proceeds to checkout and/or calculate EU VAT out of VAT-inclusive gross item prices after checkout. Since this depends on our cart, where we can ask the buyer to specify their location to determine their tax eligibility, this feature will not work with our Buy Now buttons, which bypass the cart and take buyers directly to instant checkout for just one item at a time.

While adding or editing a taxable product:

Tick the box to Show advanced settings at the top;
Tick the box to Add Sales Tax / VAT if you want us to calculate Sales Tax or VAT on sales of that product;
Sales Tax will be calculated as a separate line item in the cart before checkout;
EU VAT will be calculated after checkout as a portion of the gross price paid, so make sure your item Price settings include enough markup to cover VAT overhead (see this Tips page if you want to offer different prices with and without VAT on the same products for different buyers—e.g., EU/B2C vs. non-EU/B2B).

Sales Tax / VAT Settings

You can find these in your E-junkie Dashboard under Manage Shipping & Tax in the left-hand sidebar menu.

Simple Sales Tax Settings

These allow you to choose any of the following:

Tick the box Tax buyers from country and select a Country to tax all buyers in that Country;
Tick the box Tax buyers from State and select a State or Province to tax all buyers in that State/Province.
Enter a Sales Tax/VAT Rate to charge buyers in the selected Country/State/Province.

Advanced Sales Tax Settings

These can be used to override the Simple Tax Settings for specific locations, or to define different tax rates for multiple states/provinces/regions;
You can define tax rates for a specific State/Province by following the format described there;
You can also define tax rates according to ZIP code, and partial ZIP codes will also work -- e.g., 123,5.0 would apply 5% tax to buyers in ZIP codes from 12300 thru 12399;
Rates for more-specific ZIP codes would override rates for partial-ZIP ranges -- e.g., 1234,5.5 would override the example above, applying 5.5% tax for ZIP codes from 12340 thru 12349, and 12345,6.1 would override that and apply 6.1% tax only to ZIP code 12345.

Sales Tax Notes:

Sales Tax is calculated according to the country and postal code of the buyer's Shipping Address for orders that require one, or otherwise by the country and postal code the buyer entered in their cart for orders that don't require Shipping; either way, this location is reported for each order in the Shipping Info column of your E-junkie Transaction Log;
Currently our cart can only calculate sales tax with rates varying by location down to 5-digit ZIP code; we are aware of the problem this poses for jurisdictions which have recently adopted sub-ZIP tax rate variations, so we plan to have a way to support such rates in the future;
However, we do have a way to condense a list of ZIP codes and their respective tax rates down to the most concise list possible using partial-ZIP rules (as explained above), in case your list is too long to completely fit in our Advanced Sales Tax Settings box; please contact us for further details.

European Union VAT Settings

Tick the box EU VAT Calculation and select the country from where you will be selling your products.

How our VAT calculation works

If you enable EU VAT Calculation, that will occur after checkout as a portion of the total gross price(s) paid, so make sure your item Price settings include enough markup to cover VAT overhead (this announcement in our forum explains why we cannot calculate VAT in the cart before checkout); if you want to offer different prices with and without VAT on the same products for different buyers (e.g. EU/B2C vs. non-EU/B2B), please see this Tips page;
If you are a non-EU merchant, your EU buyers will have VAT calculated at their country's rate on all items with Sales Tax/VAT enabled;
If you are an EU merchant, effective January 1st, 2015 the applicable VAT rate depends on "place of supply" rules that depend on the nature of each item ordered:
- The VAT rate for the buyer's location will apply for items that have any of the following digital-delivery settings enabled (if they do not also have Require Buyer's Shipping Address enabled):
  - Single File Download;
  - Redirection;
  - Send Stored/Generated Codes;
  - Bundle other products.
- To determine the buyer's place of supply for digital items, we 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);
- Ebook file types will get a reduced VAT rate if applicable for the buyer's location;
- If your product will be digitally-delivered independently of our system (e.g., a webinar or mailing list enrollment), but you still want us to calculate VAT on it as a digital item, we recommend enabling Redirection for the product, with its Redirection URL pointing to your homepage or to a thank-you page for that product on your site;
- Any other items (including digital items with Shipping & Buyer's Address enabled) will calculate VAT at the rate for your origin country selected in Manage Shipping & Tax > Sales Tax/VAT Settings > EU VAT Calculation;
- VAT will not be calculated for buyers located outside the EU.
B2B (business to business) sales:
- Presently we have no method to validate VAT numbers, so you may wish to do that yourself after purchase and refund any VAT paid by EU buyers who are exempt from VAT;
- If you exclusively sell B2B or can set up a separate section or page of your site for B2B sales, you may wish to validate VAT numbers on your own before granting access to your sales pages where items are available for purchase without VAT;
- See this Tips page if you want to offer prices with and without VAT on the same products for different buyers -- e.g, you could set up purchase buttons for B2C sales on your public sales pages, and for B2B sales in a restricted-access section of your site.
You are still responsible for determining whether you are subject to VAT and, if so, which particular products are subject to VAT, and for actually filing and paying any VAT due with the relevant revenue agents yourself; we just provide location and calculation records to facilitate your compliance with VAT obligations, but if you ultimately determine you are not obliged to pay VAT, you can simply disregard any VAT amounts we have calculated for you.

Explanation of VAT-related Transaction Log fields

Your E-junkie Transaction Log documents the relevant "place of supply" location(s) and VAT amounts calculated for orders subject to VAT. Note that the Web-based Transaction Log view is intended as a human-readable format for your easy visual reference, which differs from the downloadable log-export file we provide in a machine-readable format suitable for spreadsheet programs and other software tools; as such, tax information is presented differently in each version of the log.

Whereas the Web-based log view presents a single-column summary of all taxes calculated, the downloadable log-export file splits that out into separate columns for ease of sorting the data and adequately documenting the place of supply. For sales after Dec. 31st, 2014 at 17:00 MST/GMT-7 (i.e., Jan. 1st, 2015 at 00:00 UTC/GMT) EU VAT is no longer included in the Tax column of downloadable log exports; rather, we have added the following new columns for EU VAT purposes at the far right end, to ensure our log export files remain compatible with older scripts and other software tools that expect our older log format.

Payment Acct Country: Card billing address country or PayPal account Residence country;
GeoIP: Country lookup for buyer's connection IP;
Digitals Country: Place of supply for digital items - result of two-way country match comparing GeoIP, Payment Acct Country, and either Shipping country (if supplied) or country declared in cart (this will show "??" if no match was found);
Digitals VAT: VAT calculated for the subtotal of all digital items in the order;
Tangibles Country: Place of supply for non-digital items - will match either Shipping destination for non-EU sellers or EU business location selected in Sales Tax/VAT Settings at the time we processed the order);
Tangibles VAT: VAT calculated for the subtotal of all non-digital items in the order;
Item VAT Rate: Applicable rate for the item;
Item VAT Country: Place of supply for the item (will match Digitals or Tangibles Country);
Item VAT Type: ebook or standard.

Calculating VAT returns to each EU member nation

Open your E-junkie Transaction Log;
Select the relevant date range and click View Log;
Click Download Log to export that log view to a file;
Unzip the downloaded .zip file and open the resulting tab-delimited .txt file in your spreadsheet program (e.g., MS Excel, LibreOffice Calc, iWork Numbers, etc.);
Sort the log by the Digitals Country column;
Sum up the figures in the Digitals VAT column alongside each grouped country in that Digitals Country column;
Re-sort the log by the Tangibles Country column;
Sum up the figures in the Tangibles VAT column alongside each grouped country in that Tangibles Country column.

Tips

FAQs

Troubleshooting

Tax is not being calculated for my orders

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