Support » Plugin: WordPress Simple Ecommerce Shopping Cart Plugin- Sell products through Paypal » Update to take account of EU VAT Regulations from January 2015

  • The EU has introduced some new VAT rules on digital downloads from 1st January 2015 where anyone selling digital downloads to a resident of the EU has to collect and account for VAT on the sale based on the VAT rate for the country in which the purchaser is resident (even if the seller is located outside of the EU!)

    This is a real headache and many people have removed plugins such as this as a result, as they cannot comply with the EU requirements.

    Basically, the plugin would need to be updated in the following way:
    a) Capture the IP address of the buyer
    b) Ask the buyer to select their country of residence from a drop down list.
    c) If the IP address country does not match the chosen country of residence, then the seller will probably wish to refuse to sell (as they cannot ascertain the correct VAT rate to apply).
    d) If the buyer’s country matches the seller’s country, then the seller needs to be able to decide whether or not to charge VAT on this (as they may not actually be required to charge VAT on domestic purchases, depending on their own country’s rules).
    e) (the hard bit) – look up the VAT rate applicable to the buyer’s country and adjust the prices shown accordingly (as VAT rates can vary substantially). There is no official lookup – but one has been created at (which hopefully will be kept up to date). The seller will need to decide on which VAT rate (standard or reduced) to use for each country for each item they sell (!) as it depends if it an ebook or something else.
    f) Pass the net amount and the VAT amount to PayPal for processing (so the seller knows how much VAT has been collected).
    g) Allow admin access to see a list of purchases made, with countries chosen, IP addresses and VAT rates used / amount collected – need to be able to extract this by date so that the seller can complete their return for the specific quarter.

    Due to the complexity, it may be worth adding this as a chargeable version of the plugin.

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