EU VAT solution

[psziladi]

We would like to prepare a webshop for out EU-based client and use Hotcakes for correct VAT handling.

Currently Hotcakes only deducts the VAT from the final price at the checkout, but we would like to do it in an EU-compliant way: In an EU e-commerce system, the pricing logic starts with the net price, which is the base price of a product before VAT.

For B2C customers, VAT must be charged based on the customer’s country, meaning the final price is calculated as Net Price + VAT at the applicable rate.

For B2B transactions, if the buyer provides a valid VAT ID, no VAT is applied, and the buyer is responsible for self-accounting under the reverse charge mechanism. However, if the VAT ID is invalid or missing, VAT is charged based on the seller’s country. For this we found the following thread, but it does not address B2C as we understand: #155.

When selling outside the EU, VAT is not charged (zero-rated).

At checkout, the system dynamically determines the correct VAT treatment based on the shipping/billing country and customer type.

However, now the price in our database is the "gross" price and Hotcakes deducts the VAT, which results in German sales with higher net price and e.g., in Hungary lower net price.

We tried to set up VAT rates on the Admin page, but it deducts from the gross price and not adds to the net price (basically it works another way around).