Commerce Commerce 1.x Modules & Extensions Taxes EU VAT

The EU Vat Module is shipped with the Commerce core. It needs to be enabled before use via Configuration > Modules.

When enabled, the EU VAT Rate Provider is available to use in your Tax Rules.

The EU VAT Rate Provider is used to apply a VAT rate for the customer’s country to all items in the cart. It retrieves the current VAT rates from jsonvat.com and caches them for 3 days.

Properties

These properties are set on a tax rule, not on the module itself.

  • Applied Tax Rate: which rate to use. For most types of products you’ll need the Standard Rate, but exempted products may use a different rate. Not all countries have all of the rates available in the dropdown.
  • Use Reverse Charge Mechanism?: check this to use the Reverse Charge Mechanism, see below.
  • Reverse Charge Exception Countries: a comma separated list of country codes where the reverse charge mechanism should not be applied, usually the countries where the merchant has an office.

Reverse Charge Mechanism

Within the European Union there is regulation that allows the so-called Reverse Charge when it comes to taxes. Usually this mechanism allows charging a 0% tax rate under the following conditions:

  • The merchant and customer are not in the same country.
  • The merchant and customer are both located in the European Union.
  • The merchant and customer both have a valid VAT registration and pay VAT in their country. Use the EU VAT Validator module to validate VAT registration numbers.

Please verify this information with your local tax office. Specific rules on the type of goods/services that are allowed/exempted, and additional requirements may differ per country.