How is EU VAT tax calculated with the PayKickstart in-house tax system?

Written By Carlos

Last updated 5 months ago

The PayKickstart in-house tax system utilizes VAT tax logic in conjunction with VIES validation to ensure that the correct customers are charged VAT at checkout. Below are the standard calculations for whether VAT should be added or removed for the checkout pricing upon purchase:

Note: these rules are only valid for the default EU tax profile.

  1. If the EU country of the customer is the same EU country of the vendor (in My Profile settings), regardless of valid VAT ID or not: → charge VAT

  2. If the country of the customer is any other EU country (not the same as the vendor) and the customer enters a valid VAT ID: → WON’T charge VAT

  3. If the country of the customer is any other EU country (not the same as the vendor) and the customer does NOT enter a valid VAT ID: → charge VAT

  4. If a customer is NOT from any EU country: → WON’T charge VAT

Please Note:

– We are using the VIES System to verify the VAT ID. Every transaction related to VAT will use VIES for tax verification.

– If VIES cannot be reached when attempting to process a transaction, PK will charge VAT for the customer, as it’s easier for vendors to partially refund tax on a transaction rather than charge tax later.

– The company name and VAT ID on the checkout pages are optional fields

– To learn more about standard EU VAT protocols, click here

– In case you are collecting the Shipping Address for your products, the Default EU Tax profile would charge the tax based on the shipping address located in the EU entered at checkout.

To learn more about other available tax profiles, click here.