VAT on shipping is charged at the highest rate of VAT on the invoice.

E.g. if all the items where reduced rate VAT the shipping would be reduced rate, however if 3 items where reduced rate and 1 was standard rate the shipping would be standard rate.

Comments

periksson’s picture

periksson commented
Version: » 7.x-2.x-dev
Component: VAT Logic » Documentation
Issue summary: View changes

Adding my 5 cents to this issue.

According to a letter from the Swedish tax office, all the VAT rates should be used for the shipping line item, that have been used for products/services in the order, and not the highest VAT rate.

This is using a proportional rule which is also used to discounts (see issue 2276227:[META] Use order discount with VAT).

"In cases where the shipping cost is attributable to sales of goods subject to different tax rates, for example, Books (6%), and CDs (25%), the taxable amount for the shipping cost is allocated to the taxable amount for each item. The distribution is based on a relationship between the taxable amount of each item and the total taxable amount of the goods."
Source: http://www.skatteverket.se/rattsinformation/skrivelser2005/02/skrivelser...

periksson’s picture

periksson commented
Component: Documentation » Core Module

Oops, the "VAT Logic" component didn't exist anymore

dwkitchen’s picture

dwkitchen commented

Hi nwpullman2,

Thanks for that information - this is different from the advice from HMRC, the UK tax office, which is what I have described.

I'm not sure what we are going to be able to do in this module, but this is a real help for the Symfony tax library I am developing with bojanz for Commerce 2.x.

I have created a new issue there to reflect this information as well https://github.com/commerceguys/tax/issues/18

Dolcey’s picture

Dolcey commented

I've been following your restlessness and I want to inform another drawback of the same module, in Spain, the IVA shipping is a fixed level 21%, and for example, in my orders products have reduced VAT, 10% and therefore is translated to VAT shipping, and therefore is not appropriate.

Added to this I do not know if a new line will be reflected in the end reflect only the VAT of 21% for shipping, because the others are only 10%.

Any help to correct this, will be assessed.