Apply TAX based on some rules

[Wouter0100]

To be able to use InvoiceNinja in the EU (or atleast - NL) we need some way of applying the following rules to our tax:

• We're from the NL, so companies and customers from the NL all need to pay 21% VAT.
• Business from inside the EU are reverse charged (0% or no VAT) - ICP
• Customers from inside the EU are charged based on their local VAT (depends on the country) - MOSS
• Business and customers from outside the EU are all reverse charged (0% or no VAT).

[mburamorde]

Good Point! We have an similiar problem, because we set the wrong taxes and habe problems with the export to the financial accouting software. The best way would be to make some plausibility, i.e. If I create an bill for an german company the only valid VAT would be 19% ...

[Wouter0100]

@mburamorde yes - that could be included, but I don't think that is possible in a custom module yet.

[tstrohmeier]

+1 for this feature

[andihuber]

also +1 for this feature :-)

[turbo124]

This functionality is baked in, the only remaining functionality are the rules for each region.

We have implemented the rules for Germany,, but we will need some kind of flowchart per region to ensure it is correct for each eu country.

[andihuber]

As I understand and know the regulation can be described in this way for all countries of the EU:

If the invoicing party and the invoice recipient are entrepreneurs with a registered VAT number and are based in different EU countries, then the invoice can be issued net (without VAT) with both VAT numbers on the invoice.

What i saw later yesterday is, that this rules also could be achieved with group settings.

[turbo124]

@andihuber

Which region are you in? I'll enable the taxes for your region and then tag a release with the same ruleset that we use for Germany.

[andihuber]

Austria :-).

So for all other EU-countries the VAT will be 0% if i provide the VAT number and the invoice receiver has a VAT number

[turbo124]

@andihuber

I've just tagged tagg v5.5.124 with taxes enabled for AT using the same ruleset as DE.

Please let me know if you see any issue.

Just to note, we don't check the validity of the VAT number, however we do assume it is a valid vat number and apply the relevant logic.

The logic for VAT Number checks is in place, however we are yet to expose this in the UI.

[andihuber]

@turbo124 Thank you very much - it is working perfectly now. I tried several combinations, they all were calculated correct.

[turbo124]

@andihuber Thank you!

If you see any edge cases, please let us know!

[andihuber]

@turbo124
Hello David,

i just have seen that when i generate an invoice assigned to a Austrian company (i am also from Austria) with VAT-number then there is also 0% VAT. Which is not correct.

VAT-free invoices are only allowed when invoice sender and receiver are in different EU countries.

[turbo124]

@andihuber

I just ran a test scenario of this.

AU company
AU Client

Product Tax Type = Physical

Is the tax type correct for the products you have applied? OR is the client marked as tax exempt?

[andihuber]

@turbo124 thank you for looking into it.

Note: In Austria we do not have 21% taxes - we have 20% and 10% for reduced tax rate. This is not correct in Invoiceninja.

I dont get what you exactly mean with tax type. On products area i have nothing set in tax field. Because of automatic tax calculation. Product Tax Type = Physical

And it works for other clients as it should (with 0% and 20%).

I also did the following test:
Deleted the VAT from the customer - 20% were then here again. So it is correct then.
Added VAT again: All products VAT free with 0%. Not correct.

So for me it seems your rules are nor correct? Maybe your rules are just "if sender and receiver have vat" or something like that?

[turbo124]

@andihuber no there is a fair bit of complexity in the rules.

if client and seller are in the same EU region, then taxes should be applied unless the client is marked as tax exempt or the products are tax exempt.

Can you confirm your subregion is selected as Austria here? And also your Company Address country is assigned to Austria also?

Just to note, it is possible to update the tax rates that are configured in the application by editing the region:

[andihuber]

@turbo124
Hello David

Can you confirm your subregion is selected as Austria here? And also your Company Address country is assigned to Austria also?
i am very sorry - i have overseen this field.. :-(
I selected it now - now tax rates are correctly calculated also for Austrian companies.

Just to note, it is possible to update the tax rates that are configured in the application by editing the region:
Yes, i am aware of that and did that already. Was just mentioning it so you can set it up correctly from your side. Thank you.

For legal purposes there has to be a special text on the invoice if it is reverse charge (VAT free).
Is there an elegant method to add that sentence if your rule applies? Or do i have to solve that with customer groups and separate Terms-text defined?

Thank you very much.

[turbo124]

@andihuber my preference here would be to bake in these types of requirements automatically.

If you can provide the text required, and the tax types it applies to, we'll look how we can integrate this best

[andihuber]

@turbo124 that would be great 👍

If we are talking about services then the text should be:
Übergang der Steuerschuld auf den Leistungsempfänger (Reverse Charge).

If it is a cross border delivery between businesses then it is:
Steuerfreie innergemeinschaftliche Lieferung.

You can find a overview with different languages here (second column is cross-border delivery, third column is services):
https://www.wko.at/service/steuern/rechnungsvermerke-international.html

If you need something translated from German just ask :-).

[andihuber]

@andihuber my preference here would be to bake in these types of requirements automatically.

If you can provide the text required, and the tax types it applies to, we'll look how we can integrate this best

@turbo124 should i make a new feature request here at github for this?

[turbo124]

@andihuber

yes that would help keep track 👍