Products with a different VAT rate
What VAT rate you charge depends on the type of goods you are selling. The tax that you apply can be specified according to the product category and/or region for better control over the tax you charge. It is possible to provide a lower/higher tax than the standard one, which will only be valid for one or more categories. You can also choose whether this exception to be only for a certain region or to be applied globally.
An example of such a case is the reduced tax on all goods in the category "Books" in many countries. You can check the VAT rates for the different product categories applicable in each country here.
There may be a change/decrease in the rate of VAT for some products mentioned in this file in different countries, due to COVID-19.
How to set exceptions?
You can set a different tax for certain regions. It will only be applicable to users from this region.
If you sell products that have a different tax than the one you set for all other products, you can create exceptions for certain categories and also specify that they only apply to certain regions. If you do not select a region, the exception created for a particular category will apply to all users, regardless of which region they are from.
1. From your CloudCart admin panel, go to Settings > Taxes.
2. Click on the Add Tax button in the upper right corner to create one, or if you already have created taxes, select the one on which you want to create some exceptions.
3. Enter the required information in the fields that you see as Name, Description, Rate, etc.
For more information of the tax settings of your CloudCart store, see this article from our Help Center.
4. In the penultimate field Exceptions by regions you can set a different tax rate for a particular region.
5. In the last section Exceptions by categories, you can select the category, the tax rate that will be applied to the products of this category, and if you wish you can also choose for consumers from which regions this condition will be applicable.
Cases in which you do not have to charge VAT on your sales
1. If you sell goods to a business and these goods are sent to another EU country, you DO NOT charge VAT if the customer has a valid EU VAT number. He must pay VAT on the goods it buys from you in his own country. If the customer doesn't have a valid EU VAT number, you should usually charge VAT on this sale at the rate applicable in your country.
CloudCart will try to validate the VAT number entered by your customer at the checkout and automatically remove the VAT rate if the number is valid. The service we are using is https://ec.europa.eu/taxation_customs/vies/ - VIES. If the VIES service is not accessible at the moment of adding the VAT number, CloudCart will accept it without validation.
2. Selling outside European Union - If your customer resides outside the EU, you do not charge VAT. However, you can deduct VAT that you paid on related expenses, such as goods or services purchased specifically to make these sales.