Collecting taxes
In this article:
Does Sellfy file taxes for me?
How to apply taxes to product prices
Do I need to have a registered company to pay tax?
Do I need to collect EU VAT or UK VAT?
How to export the VAT MOSS report
How much VAT do I need to charge?
Does Sellfy file taxes for me?
Important! The United Kingdom's Brexit transition period is now over and the United Kingdom is no longer a part of the European Union as of January 1, 2021. This affects both the taxes for those located in and selling to the United Kingdom. Please read here for more details.
Sellfy won't be able to file taxes for you. You'll need to report and pay taxes to your own local tax authority or authorities. Our role is to provide you with the tools that you need to set and collect tax amounts for your products, and to reflect those taxes in your sales reports.
If you're unsure or not familiar with your local tax requirements, we recommend that you contact your local tax authority to get the most accurate information about what taxes, if any, you need to pay. Much of this will depend on where you’re located.
Note: We offer tools for both European VAT MOSS and UK VAT reporting to HRMC. You can find out more about EU VAT and Brexit here: How does Sellfy handle the EU VAT laws and Brexit?
How to apply taxes to product prices
You can manage and set up taxes for your store in your account.
Note: VAT tax is calculated and added automatically once you enable tax for your store. For any other regions, countries and states, you'll need to set tax percentages manually.
- Navigate to Store Settings > Taxes
- Enable tax
- Set taxes for 'Rest of the world'
- Manually add sales tax per region, country and state
- You can choose whether tax is included in the product price or if it's added on top of it
- You may also restrict sales to the European Union or the United Kingdom
- Press Save Taxes
After you configure your tax settings and set the tax percentages, we'll calculate the respective amount of taxes for each order and display the amounts to the customer at checkout. You can then export a report of the amounts collected, whenever needed!
How to get a tax report
We collect all the order data for you in the Orders section, including the product price, tax amount, and customer's country of location (if you have tax enabled).
You can use the data from your Order history for tax purposes and submit the information to your accountants or directly to your local tax authority, depending on their requirements.
To request your Order export navigate to Orders > Export > Request report.
Note: The exported file is in CSV format and must be opened using the appropriate application to view it as a spreadsheet. Once you have downloaded and saved your Order export on your computer, open the exported file in Google Sheets, Microsoft Excel, or OpenOffice Calculator to display the data coherently. If you're using a Mac computer, you can use the Numbers app as well.
Do I need to have a registered company to pay tax?
Important! Law and regulation pertaining to tax and company registration can vary significantly from country to country. It is essential to make sure that your business complies with local legislation and that of the countries your customers are located in.
How are tax rates calculated?
You'll set and save the tax rates and preferences for your account according to your business needs.
After you've enabled taxes and configured the tax rates in your account, Sellfy will use these rates to calculate and apply them to each order. You'll choose whether to include the tax in the total of your sale, or whether it is applied "on top" or in addition to the customer's order total.
If you're selling to customers in the United Kingdom or the European Union, it is required that you collect and file VAT (value-added-tax). But, no worries! Sellfy makes this easy. We'll automatically apply the current EU VAT rates to your orders. Or, if you choose, you may block customers from the EU and/or the UK.
Manual settings for tax rates
Note: If you are located in a European country and have checked the 'Don't allow purchases from European Union' box under Tax settings, customers located in your own country will still be able to purchase items from you.
Our tax settings include manual settings that offer you some control over taxes. Be sure to save any changes made.
- Include tax in product price - This will not add any additional cost to the order for taxes. It means that any amount due for taxes will be considered as already paid for in the product or order cost. This also includes the tax that is paid for the shipping charge.
- Charge taxes on shipping rates -This will collect taxes on the amount that the customer is paying for shipping, as well as the product price.
- Don't allow purchases from the European Union -This will block customers in the EU from making purchases so that the seller is not required to register and pay VAT on these orders.
- Don't allow for purchases from the United Kingdom - This will block customers in the UK from making purchases so that the seller is not required to register and pay UK VAT on these orders.
Do I need to collect EU VAT or UK VAT?
Note: If you are located in a European country and have checked the Don't allow purchases from European Union box in your Tax settings, customers located in your own country will still be able to purchase items from you.
Are you selling to customers located in the United Kingdom or the European Union? If yes, then you will be required to collect VAT (Value-added-tax) on the purchases. You will also be required to register and report these taxes. As of January 1, 2021, you will need to report UK VAT and EU VAT separately.
Regardless of your own personal or business location, VAT applies to every seller who provides products and/or services to the EU and the UK. This is because the tax is assessed not by the seller's location, but rather by the buyer's location.
You will have one of two options:
- Block these customers from making any purchases
- Collect the appropriate taxes, register, and report these taxes.
Sellfy's role is to help provide you with the tools to block UK and EU customers, or you can enable sales and collect the proper amount of tax based on the buyer's location.
For more information on VAT collection and reporting, please read here.
How to export the VAT MOSS and UK VAT reports
If you're collecting VAT for the UK or the EU, you may be required to provide a quarterly tax report.
To export tax information specifically for VAT:
- Navigate to Store Settings > Taxes
- Go to VAT MOSS report
- Select the region, month(s), and year from the dropdown menu
- Click Export
- Open the downloaded file with Excel, Google sheet or other application for reading CSV files
How much VAT do I need to charge?
See the table below for VAT rates per country.
Keep in mind that if you have tax enabled for your store, we'll automatically calculate the correct VAT based on your customer's location. Applicable VAT charges are added at checkout and collected with the customer payment.