How To

Setting up Value Added Tax (VAT) in ChannelAdvisor

This page is intended to outline the process for setting up your Value Added Tax (VAT) rate for order reporting within the ChannelAdvisor system. VAT is a tax that is charged on most goods and services that VAT-registered businesses provide in the UK and EU. It's also charged on goods and some services that are imported. VAT is charged when a VAT-registered business sells to either another business or to a non-business customer. A similar system to VAT called GST or IVA operates in many other countries.

Retailers are expected to pay their local government an appropriate VAT for sales on qualifying items or the local government in another country if the seller’s sales have passed a certain threshold – this is called the Distance Selling Threshold. It is the responsibility of the retailer to calculate and submit their taxable amount to their local jurisdictions. For more information on VAT in your country please contact a local resource (eg. solicitor, government, tax expert).

 

Click below to download the tip sheet:
Click below to download the eBook:

 

How VAT is charged on various channels


 

VAT for Domestic Sales

At ChannelAdvisor, we know that the VAT you should charge on your goods sold to buyers across the globe can be fluid and change at a moment’s notice depending on legislation and whether you have reached the Distance Selling Threshold as well as many other factors. So, our VAT support is as flexible as you need to ensure that orders imported into your account are accurate according to your latest settings.

With ChannelAdvisor’s expanded VAT support, sellers now have the ability to not only set a VAT percentage at account or classification level but also at SKU level. This means that if the vast majority of your products sell at 20%, for example, but a small portion contain 5% VAT, it is now easier than ever to ensure the correct VAT amount shows on your orders and your invoices.

 

VAT for Foreign Sales

Not only that, you can set a VAT rate on your products, again right down to the SKU level, per country too. Meaning that if you are a VAT-registered business in another country, you can specify the correct VAT amounts to be shown on your orders and invoices for your foreign sales.

As a seller, you can change these settings as you wish and the new settings take effect straight away – meaning upon the next set of order imports into your account, those new settings are taken into account. Exceeded the DST in France and now need to charge French VAT? No problem – just provide a France override on the VAT Settings page and we’ll take care of the rest to ensure your orders and invoices display the correct VAT breakdown.

 

How VAT for Marketplace Sales is handled

It should be noted that the amount of VAT specified on the VAT settings page does not link in any way to the VAT amount you specify on the listings to the marketplace. Marketplaces work in one of two ways:

  1. The marketplace allows you, on the template, to specify VAT or
  2. The marketplace does not permit you, on the template, to specify VAT.

If you are selling on a marketplace which does allow you to specify the VAT content on a per-SKU basis, sellers should ensure that their VAT settings match to the settings specified in the marketplace template.

We calculate the VAT on your orders as they are imported in the following sequence:

  1. If the marketplace provides a VAT amount on the order, we will use this (hence sellers should ensure any VAT amount on their marketplace template is accurate).
  2. If the marketplace does not specify the VAT amount on a per-order basis, we check the settings that sellers have on their account in the following order:
    • Country-specific item level VAT override
    • Country-specific VAT rate
    • Non-country-specific item level VAT override
    • Non-country-specific VAT rate
    • Classification-level VAT setting
    • Account-level VAT setting

 

Steps to Configure ChannelAdvisor VAT Settings


  1. Navigate to your Sales > Settings > VAT Settings view.
  2. Choose the Enable VAT setting.
  3. You have the option to calculate VAT separately for the following by simply selecting the option and indicating the tax percentage – you can also specify an attribute to pick up the data from if you prefer:
    • Item VAT Rate
    • Shipping VAT Rate
    • Gift Wrap VAT Rate

    • In the VAT Override Settings table directly below these settings, you may set any item-level or country-specific overrides for your products. Reminder: You should only provide country-specific VAT rates for countries where your business is registered for VAT.

Since the VAT settings across multiple countries can become quite cumbersome, we’ve provided a preview facility for you:

Simply search for a product to be presented with:

  1. Where the VAT amounts are being determined (i.e. which field above).
  2. What the VAT amounts would be for each country you have specified in the Override table.

 

Distance Selling Threshold Widget


We know setting your VAT rates is not the last step in managing orders and VAT thresholds for your business, so ChannelAdvisor has provided our sellers with an account widget for Distance Selling Threshold monitoring . The widget will show you where you are year-to-date in regards to sales both in your home country and for countries in the EU. The widget will warn you when you are approaching levels where you should start to think about registering for VAT in another country.

This page is intended to outline the process for setting up your Value Added Tax (VAT) rate for order reporting within the ChannelAdvisor system. VAT is a tax that is charged on most goods and services that VAT-registered businesses provide in the UK and EU. It's also charged on goods and some services that are imported. VAT is charged when a VAT-registered business sells to either another business or to a non-business customer. A similar system to VAT called GST or IVA operates in many other countries.

Retailers are expected to pay their local government an appropriate VAT for sales on qualifying items or the local government in another country if the seller’s sales have passed a certain threshold – this is called the Distance Selling Threshold. It is the responsibility of the retailer to calculate and submit their taxable amount to their local jurisdictions. For more information on VAT in your country please contact a local resource (eg. solicitor, government, tax expert).

 

Click below to download the tip sheet:
Click below to download the eBook:

 

How VAT is charged on various channels


 

VAT for Domestic Sales

At ChannelAdvisor, we know that the VAT you should charge on your goods sold to buyers across the globe can be fluid and change at a moment’s notice depending on legislation and whether you have reached the Distance Selling Threshold as well as many other factors. So, our VAT support is as flexible as you need to ensure that orders imported into your account are accurate according to your latest settings.

With ChannelAdvisor’s expanded VAT support, sellers now have the ability to not only set a VAT percentage at account or classification level but also at SKU level. This means that if the vast majority of your products sell at 20%, for example, but a small portion contain 5% VAT, it is now easier than ever to ensure the correct VAT amount shows on your orders and your invoices.

 

VAT for Foreign Sales

Not only that, you can set a VAT rate on your products, again right down to the SKU level, per country too. Meaning that if you are a VAT-registered business in another country, you can specify the correct VAT amounts to be shown on your orders and invoices for your foreign sales.

As a seller, you can change these settings as you wish and the new settings take effect straight away – meaning upon the next set of order imports into your account, those new settings are taken into account. Exceeded the DST in France and now need to charge French VAT? No problem – just provide a France override on the VAT Settings page and we’ll take care of the rest to ensure your orders and invoices display the correct VAT breakdown.

 

How VAT for Marketplace Sales is handled

It should be noted that the amount of VAT specified on the VAT settings page does not link in any way to the VAT amount you specify on the listings to the marketplace. Marketplaces work in one of two ways:

  1. The marketplace allows you, on the template, to specify VAT or
  2. The marketplace does not permit you, on the template, to specify VAT.

If you are selling on a marketplace which does allow you to specify the VAT content on a per-SKU basis, sellers should ensure that their VAT settings match to the settings specified in the marketplace template.

We calculate the VAT on your orders as they are imported in the following sequence:

  1. If the marketplace provides a VAT amount on the order, we will use this (hence sellers should ensure any VAT amount on their marketplace template is accurate).
  2. If the marketplace does not specify the VAT amount on a per-order basis, we check the settings that sellers have on their account in the following order:
    • Country-specific item level VAT override
    • Country-specific VAT rate
    • Non-country-specific item level VAT override
    • Non-country-specific VAT rate
    • Classification-level VAT setting
    • Account-level VAT setting

 

Steps to Configure ChannelAdvisor VAT Settings


  1. Navigate to your Sales > Settings > VAT Settings view.
  2. Choose the Enable VAT setting.
  3. You have the option to calculate VAT separately for the following by simply selecting the option and indicating the tax percentage – you can also specify an attribute to pick up the data from if you prefer:
    • Item VAT Rate
    • Shipping VAT Rate
    • Gift Wrap VAT Rate

    • In the VAT Override Settings table directly below these settings, you may set any item-level or country-specific overrides for your products. Reminder: You should only provide country-specific VAT rates for countries where your business is registered for VAT.

Since the VAT settings across multiple countries can become quite cumbersome, we’ve provided a preview facility for you:

Simply search for a product to be presented with:

  1. Where the VAT amounts are being determined (i.e. which field above).
  2. What the VAT amounts would be for each country you have specified in the Override table.

 

Distance Selling Threshold Widget


We know setting your VAT rates is not the last step in managing orders and VAT thresholds for your business, so ChannelAdvisor has provided our sellers with an account widget for Distance Selling Threshold monitoring . The widget will show you where you are year-to-date in regards to sales both in your home country and for countries in the EU. The widget will warn you when you are approaching levels where you should start to think about registering for VAT in another country.

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