New VAT rules in european union and PrestaShop

2021-07-07 european union, prices, tax, vat

European Union changed VAT tax rules that affects e-commerce business if you're from european union. These VAT rules affects also third-party businesses that operates from third-party countries out of European Union. It is just enough to sell for customers from european union even if you're out of europe. Simply saying - From 1 July 2021 we have new VAT (value added tax) rules on cross-border business-to-consumer (B2C) e-commerce activities in the European Union.

 

Is PrestaShop ready for these new VAT rules?

In PrestaShop each product can be assigned to "tax rule group". As on screenshot i attached below.

What is "tax rule groups" ? Tax rule group in prestashop groups tax condition rules that are country-related. You can manage these tax rule groups under international > taxes (in PrestaShop 1.7) or under localization > tax rules (in PrestaShop 1.6). So you can see that these settings are applicable both for 1.6 and 1.7 releases of presta.

tax rule vat in prestashop

 

Tax rule group settings

Go to international > taxes > tax rules. Open edit page of tax rule group. In context of my example i show edit page of FR Taux Standard (20%) tax rule group. There are two sections - first, where you can define name of tax rule group, if it is active or not and define shop associations (when you work in multistore environment). Second section is a section where you can setup tax value rules that depends on country of delivery. As on screenshot:

tax rule vat in prestashop

 

Just setup there various tax values for countries from european union. When someone will add this product to cart - prestashop will check delivery address of this customer and depending on it - apply a corresponding VAT tax value from "tax rule group" settings.

 

Suggestion

Countries in european union have 3 types of VAT tax.

  • standard VAT rate
  • reduced VAT rate
  • VAT exempt rate (0%)

Just create these 3 tax rule groups in your shop and define corresponding tax rates for each country. Then just assign product to 

appropriate tax rule group. List of current (2021) tax values you can find below. Please note that each country can have some very specific tax rules according to product type you sell. It's worth to do a little research about it before you will start to deliver your products to other countries since tax rates may be different than listed below

 

Country

Standard VAT Rates

Reduced VAT Rates

VAT rate in Austria The standard VAT rate is 20%. 10% ,  13% , 19%
VAT rate Belgium The standard VAT rate is 21%. 12%,  6%  From May 8, 2021, to September 30, 2021, the VAT rate on restaurant and catering services (including the delivery of certain alcoholic beverages) has been reduced to 6%.
VAT rate Bulgaria The standard VAT rate is 20%. 9%
VAT rate Croatia The standard VAT rate is 25%. 13%, 5%
VAT rate in Cyprus The standard VAT rate is 19%. 5%, 9%
VAT rate in Czech Republic The standard VAT rate is 21%. 15% , 10%
VAT rate in Denmark The standard VAT rate is 25%. There are certain services that are exempt from VAT such as health and social care; education; cultural activities and more.
VAT rate in Estonia The standard VAT rate is 20%. 9%.
VAT rate in Finland The standard VAT rate is 24% 14%, 10%
VAT rate in France The standard VAT rate is 20%. 5.5%,  2.1% applies to major medicines, newspapers, and online news services
VAT rate in Germany The standard VAT rate is 19% 7% Farmers benefit from a reduced rate of 5.5%
VAT rate in Greece The standard VAT rate is 24% 13%
VAT rate in Hungary The standard VAT rate is 27%. 5% , 12%,  7%, 18%
VAT rate in Ireland The standard VAT rate is 23%. 13.5%, 4.8%, 9%
VAT rate in Italy The standard VAT rate is 22% 4%,  5%, 10%
VAT rate in Latvia The standard VAT rate is 21%. 12%, From January 1, 2018, to December 31, 2023, the VAT rate on certain fruits and vegetables has been reduced from the standard rate (21%) to 5%.
VAT rate in Lithuania The standard VAT rate is 21%. 9%, 5%
VAT rate in Luxembourg The standard VAT rate is 17% 14%, 3%,  8%
VAT rate in Malta The standard VAT rate is 18%. 5%, 7%
VAT rate in Monaco The standard VAT rate is 20%.  5.5%, 10%, 2.1%
VAT rate in The Netherlands The standard VAT rate is 21% 9%
VAT rate in Poland The standard VAT rate is 23%. 8%, 5%
VAT rate in Portugal The standard VAT rate is 23% 6%, 13%
VAT rate in Romania The standard VAT rate is 19%. 9%, 5%
VAT rate in Slovakia The standard VAT rate is 20%. 10%,  6%
VAT rate in Slovenia The standard VAT rate is 22%. 9.5%, 5%
VAT rate in Spain The standard VAT rate is 21% 10%, 4%
VAT rate in Sweden The standard VAT rate is 25%. 12%,  6%
author milos myszczuk
Article by Milosz Myszczuk PrestaShop expert, official PrestaShop community moderator. PHP developer, specialist in relative and spatial databases management, GIS Analyst, CEO & founder of VEKIA interactive agency. Read more about VEKIA company
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