How VAT is managed in systeme.io
In this article, we will explain how VAT works, and how to set up systeme.io.
VAT is a complicated issue because rates vary from country to country and according to the type of product sold.
Luckily
systeme.io helps to manage this problem as best as possible.
Information products and services
For information products and services, the rule is simple: the VAT rate of the buyer's country of residence is applied.
Proof:
This is the default operation of the order form in systeme.io :
You set a price excluding VAT in the order form settings and during the purchase, systeme.io will automatically add the VAT rate of the buyer's country.
Important note : if you don't put the
"Country" field on your order form, the VAT rate applied will be 0% since it is impossible for us to determine the rate of VAT to be applied.
Example: you are in France (VAT of 20%) and you sell a training course to a person resident in Belgium (VAT rate of 21%): a VAT rate of 21% must be applied to the sale.
Physical products
For physical products the rule is simple: the VAT rate of the seller's country applies.
To manage it in
systeme.io we have added the possibility to create physical products (in the Menu go to Sales => Products).
For each physical product, you have the possibility to define the VAT rate of your choice.
(we recommend you to put the VAT rate of the country where you reside).
If you want to set the rate of your choice
If you want to set the VAT rate of your choice (for example to apply the reduced VAT rate for digital books in France) you just have to create a product in the interface (like a physical product) and sell it with
systeme.io
D.O.M. and T.O.M.
For the DOM TOM, they have a VAT rate that applies locally but if you are not resident in one of these territories, the VAT rate to be applied when you sell to a resident of these territories is 0%.
