European Union (EU) VAT place of supply - HostBill changes required?

[BRJP]

All,

I have been tracking the below and wondered what the impact on HostBill will be and whether changes will be required.

From 1 January 2015, changes will be made to the European Union (EU) VAT place of supply of services rules involving business to consumer (B2C) supplies of digital services (broadcasting, telecommunications and e-services). The place of taxation will be determined by the location of the consumer, and digital supplies will be taxed at the VAT rate applicable in the consumer's member state. 

Source: https://www.gov.uk/government/publications/vat-supplying-digital-services-and-the-vat-mini-one-stop-shop/vat-supplying-digital-services-and-the-vat-mini-one-stop-shop)

I would be glad to hear from anyone with some insight on the impact and whether changes to the software will need to be made.

[asuweb]

I'm just trying out hostbill lite to see if it meets my requirements.  Impressed so far.

As for the new EU VAT rules, I believe the following needs changed:

VAT charged is now as per the country of the customer and not the supplier, so the pre-made vat rates need to be altered to reflect the individual vat rates of each EU country.  The rates are here: http://www.vatlive.com/vat-rates/european-vat-rates/eu-vat-rates/

The following may or may not already exist in the software, I'm still testing it and haven't got this far.

Upon order creation, if customer is a VAT registered business within the EU (but outside of seller's country) they must supply their VAT ID. This needs to be verified using the VIES VAT checker. (there are various scripts floating around which do this).

If VAT id is valid, no vat needs to be charged but invoice should state "vat reversed charged" or something like that.

I believe it's also required to verify that the customer is in fact in the country they say they are.  Something like geo-ip would suffice I'd guess.

If customer is not a business or not vat registered, you charge the vat according to the country of the customer.

From an accounting point of view, you need a way to extract sales to eu countries, so that you can correctly complete a vat return for each EU country or VAT MOSS.

[BRJP]

A very informative post - thank you for replying with his helpful information.

It would be good to hear how your testing is going in this area - we are looking at this too but would be good to compare notes.

[asuweb]

Hostbill seems to be EU VAT compliant.  And from what I've seen needs no changes.

You do need the VIES VAT paid module.  You can get a test license for 7 days from the Hostbill website.

It adds reverse charge notification correctly.

The wiki seems to have all of the necessary bits to get it set up:
http://wiki.hostbillapp.com/index.php?title=Set_up_Tax_for_EU-based_business

This is the corrected SQL statement to update the VAT for each EU county. 

Code Select Expand

TRUNCATE TABLE `hb_tax`;
INSERT INTO `hb_tax` (`id`, `rate`, `type`, `name`, `state`, `country`) VALUES
(1, '23.00', 'L1', 'VAT', '0', 'PL'),
(2, '20.00', 'L1', 'VAT', '0', 'GB'),
(3, '19.00', 'L1', 'VAT', '0', 'DE'),
(4, '20.00', 'L1', 'VAT', '0', 'AT'),
(5, '21.00', 'L1', 'VAT', '0', 'BE'),
(6, '20.00', 'L1', 'VAT', '0', 'BG'),
(7, '19.00', 'L1', 'VAT', '0', 'CY'),
(8, '21.00', 'L1', 'VAT', '0', 'CZ'),
(9, '25.00', 'L1', 'VAT', '0', 'DK'),
(10, '20.00', 'L1', 'VAT', '0', 'EE'),
(11, '24.00', 'L1', 'VAT', '0', 'FI'),
(12, '20.00', 'L1', 'VAT', '0', 'FR'),
(13, '23.00', 'L1', 'VAT', '0', 'GR'),
(14, '27.00', 'L1', 'VAT', '0', 'HU'),
(15, '23.00', 'L1', 'VAT', '0', 'IE'),
(16, '22.00', 'L1', 'VAT', '0', 'IT'),
(17, '21.00', 'L1', 'VAT', '0', 'LV'),
(18, '21.00', 'L1', 'VAT', '0', 'LT'),
(19, '17.00', 'L1', 'VAT', '0', 'LU'),
(20, '18.00', 'L1', 'VAT', '0', 'MT'),
(21, '21.00', 'L1', 'VAT', '0', 'NL'),
(22, '23.00', 'L1', 'VAT', '0', 'PT'),
(23, '24.00', 'L1', 'VAT', '0', 'RO'),
(24, '20.00', 'L1', 'VAT', '0', 'SK'),
(25, '22.00', 'L1', 'VAT', '0', 'SI'),
(26, '21.00', 'L1', 'VAT', '0', 'ES'),
(27, '25.00', 'L1', 'VAT', '0', 'SE');

[BRJP]

This is a great, helpful and informative post. 

Thank you Asuweb.

[asuweb]

You're welcome.

I'm impressed with Hostbill so far, compared to the other offerings, it's certainly a well set-up product, and intuitive to use, which is always a bonus.  Obviously there are issue with the guy behind the company, but that aside, you can't knock a well designed and thought out product.

Just to add to the above post, here you'll find valid vat numbers which you can use to test that the VIES VAT module works correctly. 
http://www.braemoor.co.uk/software/vattest.php

[BRJP]

I'm impressed with Hostbill so far, compared to the other offerings, it's certainly a well set-up product, and intuitive to use, which is always a bonus.  Obviously there are issue with the guy behind the company, but that aside, you can't knock a well designed and thought out product.

I will be honest and say that I have found the product very good and met our needs.  We did have a good budget to spend so we could afford premium support.  But we also love the features of the product.  Thus far, we remain pleased and so do our clients.

[Danny]

Hi,

i´am also affected from the new tax rule on 01.01.2015 and i have
thought that the actually configuration with the VIES VAT Eu Plugin will working for this scenario, but now i have see they have create a new VIES VAT module 2.0 and they write things like this

Added: [VIES 2.0] B2C client within EU will be charged with his local tax rate, auto-set by plugin in client profile Learn more
Added: [VIES 2.0] "Set local VAT rate for B2C customer" in plugin configuration option for customers falling into 2015 EU MOSS directive Learn more

so i am confused if the actually will work for this now or if i have to buy now the 2.0 module

[Nicman]

Hi,

i´am also affected from the new tax rule on 01.01.2015 and i have
thought that the actually configuration with the VIES VAT Eu Plugin will working for this scenario, but now i have see they have create a new VIES VAT module 2.0 and they write things like this

Added: [VIES 2.0] B2C client within EU will be charged with his local tax rate, auto-set by plugin in client profile Learn more
Added: [VIES 2.0] "Set local VAT rate for B2C customer" in plugin configuration option for customers falling into 2015 EU MOSS directive Learn more

so i am confused if the actually will work for this now or if i have to buy now the 2.0 module

+1 on this. Should we buy the new module?

[Danny]

i have bought now the new module. i want to be sure that i get no problems on 01.01.2015. There where added some new things on customer profile for tax, after i have installed it an some other things are new

[BRJP]

This is interesting - I am struggling to see whether we need to buy VIES 2.0 or not? 

Asusweb - do you have a view on whether the VIES 2.0 is really needed?  Or does your analysis and SQL cover this?

[asuweb]

Sorry for late reply.

The testing I did was using the VIES VAT plugin version 1.7.  As long as you update the vat rates (sql script) then I can't see why 1.7 wouldn't work.  I see that there is now a V2, and the cost has doubled, but I haven't investigated this version.

Although I remain impressed overall with hostbill, and think the actual software is easy to use, and just works out of the box, I have decided not to purchase HB due solely to the erratic way in which the company is run, and the erratic price structure. 

The lack of proper support from the developers is also a concern, although during testing I didn't come across any scenario where I needed support.  I think any paid product, especially a monthly subscription such as Hostbill lite should by default include support at no extra cost. 

Like I said, good product, wrong company. 

[BRJP]

Although I remain impressed overall with hostbill, and think the actual software is easy to use, and just works out of the box, I have decided not to purchase HB due solely to the erratic way in which the company is run, and the erratic price structure. 
The lack of proper support from the developers is also a concern, although during testing I didn't come across any scenario where I needed support.  I think any paid product, especially a monthly subscription such as Hostbill lite should by default include support at no extra cost. 

Like I said, good product, wrong company. 

That is a real shame that KBKP has lost you as a customer. I think the product is good and, ironically, the pricing structure has taken a turn for the better.  Although I cannot say we are in steady state it's looking a little more promising.  KBKP's history is the baggage they need to shake off and a protracted period of stability and being more responsive is what they need to focus on first. A good product is not good enough without certainty, stability nor support.