Many online retailers selling into the EU will exceed the EU VAT threshold for a specific country and need to register for VAT in that country. This article explains how to configure Tradebox One to customise tax codes and set these per country.
Tradebox already classifies each order as UK, EU or Rest of World and applies a VAT rule, based on the shipping address of the order. This means you don't need to set up tax rules for every country you may ever ship to, only the ones in which you need a different, more specific tax treatment; normally this means only the non-UK countries in which you're VAT registered.
Creating a new tax rate
In Tradebox One go to Maintenance and select the Tax Rates tab. This displays the default tax rates in Tradebox One and the percentage each is set at. These Tradebox tax rates can be mapped to your accounts software tax rates, if you have an accounts package integrated to Tradebox.
To create a new tax rate click on the NEW button. Fill out the form, providing an identifiable name for the new tax rate and the percentage it operates at (see below). Then choose Save. If you need additional rates (such as tracking reduced-rate goods in a VAT-registered country), add one per additional tax treatment that applies to your business.
Setting the tax treatment per country
To apply the new tax code to a specific country, in the Maintenance menu click on the Countries tab. Scroll down until you find the country and double click on it. In the country dialog box, select the new tax code against the Sales, Carriage and Other Tax drop down boxes then choose Save.
Based upon this configuration, Tradebox One will allocate the new tax rate against all sales, carriage and other income on an order with a matching Shipping Country, i.e. in this example an order with a shipping address in Germany.
Mapping to your Accounts package tax codes
If you do have an integration set up to an accounts package you will need to map the new Tradebox tax code to an existing accounts tax code. To do this, double-click on the sales channel in the Channels module and choose the Sage 50/Xero tab and then the Tax Codes tab. This will display all of the existing Tradebox tax codes and the mappings to the tax codes in the integrated accounts package (Sage 50 in this example). Double click on the new Tradebox Tax code and choose the corresponding tax code from the integrated accounts package then choose Save.
By default, Tradebox will apply the new tax code to ALL products on orders that are shipped to the specified country. This includes products which may be marked as VAT exempt in your product list. It's worth noting that whilst a product may be VAT exempt in the UK (for example children's clothing or books) it does not necessarily mean that the same products are VAT exempt in the EU country you are VAT registered in. If you need to override this for any specific products shipped to the country in question, you can set a per-product-per-country tax treatment.
Applying a tax code per-product-per-country
To do this go to the Product module and double click on the Product Record then choose the Taxation tab. Select the NEW button and in the dialog box choose the country and the sales tax from the drop down lists. In this example we have created a new tax code for German VAT exempt products. If you do create a new tax code, and you have an accounts package integrated, remember to map it to the accounts software tax code.
If you need to adjust the country tax code for multiple products, this can be done by importing a simple CSV file in the Product module by selecting Import and choosing the Tax Codes Per Country option. The pop up dialog box offers the option to "View Expected File Structure". Choosing this link will allow you to download a sample import file.