The extension offers the "Dynamic customer tax class" feature in order to assign customers to a tax class independently of their customer group, and thus to support various advanced use cases of VAT calculation.
Supported cases for an EU-based business
Depending on which address is to be used for the evaluation (or rather the VAT ID of the respective address), the module currently supports the following cases. If the evaluation is to be based on the billing address, more complex possibilities arise than when the evaluation is based on the shipping address. You can choose via the configuration which method better suits your business.
At this point we would like to point out once again that we are not tax advisors ourselves, and that although the cases mentioned, their application and the corresponding tax rates have been worked out with the greatest care together with our customers (and their tax departments), this does not constitute any guarantee of a fully correct application of VAT in your business. We expressly recommend reviewing the cases together with your tax advisor or your tax department to verify their correctness for your individual situation.
Based on the billing address
| Country of billing address | Valid VAT ID | Country of shipping address | Tax rate to apply |
|---|---|---|---|
| Domestic | Yes | Domestic | Domestic |
| Domestic | No | Domestic | Domestic |
| Domestic | Yes | EU country | Domestic |
| Domestic | No | EU country | Rate of the EU country |
| Domestic | Yes | non-EU country | Zero rate |
| Domestic | No | non-EU country | Domestic |
| EU country | Yes | Domestic country | Domestic |
| EU country | No | Domestic country | Domestic |
| EU country | Yes | EU country | Zero rate |
| EU country | No | EU country | Rate of the EU country |
| EU country | Yes | non-EU country | Zero rate |
| EU country | No | non-EU country | Domestic |
| non-EU country | - | Domestic | Domestic |
| non-EU country | - | EU country | Rate of the EU country |
| non-EU country | - | non-EU country | Zero rate |
Based on the shipping address
When the customer tax class is evaluated using the VAT ID of the shipping address, the following cases arise.
The EU B2B customer tax class is always applied when one of the following conditions is met:
- Shipping is to a non-EU country
- Shipping is to an EU country (not domestic) and the shipping address contains a valid VAT ID
Domestic national shipping is always taxed via the consumer customer tax class. Otherwise, the tax rate of the respective shipping country is calculated.
Supported cases for delivery to the United Kingdom
| Country of origin | Shipping country | Order total | Tax rate to apply |
|---|---|---|---|
| Any EU | United Kingdom, except NI | under 135 GBP | UK rate |
| All EU | UK, except NI | over 135 GBP | Zero rate |
Supported cases for import into the EU
| Country of origin | Shipping country | Order total | Tax rate to apply |
|---|---|---|---|
| Any non-EU | Any EU | under 150 EUR | Country rate |
| All non-EU countries | Any EU | over 150 EUR | Zero rate |
Concrete examples
The following examples assume a German shop (domestic = DE) with the dynamic customer tax class enabled and evaluation based on the billing address.
| # | Situation | Result |
|---|---|---|
| 1 | Private customer from DE | 19 % DE (consumer incl. VAT) |
| 2 | Business from DE with a valid VAT ID | 19 % DE (business incl. VAT – domestic B2B remains taxable) |
| 3 | Business from FR with a valid VAT ID, delivery to FR | 0 % (intra-Community supply / reverse charge) |
| 4 | Business from FR without a valid VAT ID, delivery to FR | 20 % FR (the French rate under OSS) |
| 5 | Private customer from FR, delivery to FR | 20 % FR (the French rate under OSS) |
| 6 | Customer from Switzerland (non-EU), delivery to Switzerland | 0 % (export supply) |
| 7 | Delivery to the Canary Islands (tax-exempt territory) | 0 % (outside the EU VAT area) |
So that, for example, the French rate (cases 4/5) is calculated, a tax rate for FR must be set in the consumer tax rule. If the rate for a country is missing, Magento does not calculate any tax there. The underlying configuration is described under Tax classes & calculation.