This article explains how VAT is managed in Rackbeat. We will take a closer look at how VAT rates are determined based on product groups and VAT zones, as well as how you can manage country-specific VAT using the new features.
This article covers the following topics:
- VAT in Rackbeat
- Country-specific VAT
- Setting up country-specific VAT
- Setting up country-specific VAT with a new product group
- Country-specific VAT with e-conomic
- My customer uses a country I haven’t set up
- Importing country-specific VAT
- Integrations with country-specific VAT
- Margin scheme VAT in Rackbeat
VAT in Rackbeat
Two factors define the applicable VAT rate for sales and purchases:
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Product group:
The product group in which the product is placed determines which VAT rate is used for sales or purchases.For each product group, you can define VAT rates for the following VAT zones:
- Domestic
- EU
- Outside EU
- VAT exempt
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VAT zone:
All customers and suppliers must have a default VAT zone that determines the applicable VAT rate for sales or purchases.
IMPORTANT! "Domestic" is not the same as your native country. If your country is selected, remember to configure the country-specific VAT with the correct rate—otherwise, it will default to 0% if the field for your country is left empty.
Country-specific VAT
Country-specific VAT enables simplified and more compliant handling of VAT rules across borders.
With this feature, you can define multiple VAT rates depending on the customer’s country—whether inside or outside the EU.
How country-specific VAT works in Rackbeat:
For all customers, a specific VAT zone can be defined based on their country. Based on this zone, Rackbeat applies the VAT rate specified in the product group.
Setting up Country-specific VAT
The setup is done within the product groups.
To configure country-specific VAT:
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Find product groups: Start by navigating to your product groups in Rackbeat.
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Edit product group: Edit your product group and select the "VAT" category.
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Update VAT rate: Here, update the VAT rates for the relevant countries.
The entered VAT rate is saved when you move to the next field or press the enter key.
Setting up country-specific VAT with a new product group
When creating a new product group and setting up country-specific VAT:
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First create and save the product group.
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Then edit it.
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Go to the "VAT" tab in the product group to view and edit specific VAT rates per zone.
Country-specific VAT with E-conomic
If you're also working with E-conomic, make sure to update VAT zones in both E-conomic and Rackbeat.
If the VAT zones are not aligned, the VAT rate on your invoice may change when synced to E-conomic.
See E-conomic’s guide for setting up country-specific VAT here:
Setting up One Stop Shop (OSS)
My customer uses a country I haven’t configured
If your customer is from a country for which you haven’t specified a VAT rate, Rackbeat will automatically use the rate from the “VAT EU” field.
Example:
Your customer is from Belgium, and you haven’t configured a specific VAT rate for Belgium.
In that case, Rackbeat will apply the VAT rate from the EU field. If “VAT EU” is set to 5%, the customer from Belgium will be charged that rate.
This ensures that VAT is always applied, even if no country-specific rate has been set.
Importing Country-specific VAT
In this article, you can read more about importing country-specific VAT to customers:
Importing VAT zone in Rackbeat
Country-specific VAT via integrations
To learn more about how country-specific VAT works in the integrations below, click on the specific integration:
Country-specific VAT works with the following integrations:
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E-conomic
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Shopify
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WooCommerce
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Webshipper
Margin Scheme VAT in Rackbeat
Rackbeat does not support margin scheme VAT, meaning VAT cannot be automatically calculated based solely on the profit margin of the item without manual calculation.
We therefore recommend that margin scheme VAT is handled through your accounting platform.