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Tax of Marketplace Orders

A marketplace order is not always taxed with domestic VAT. A consumer in another EU country pays the VAT of their country (OSS), a business buyer with a VAT ID of another EU country buys without VAT (intra-community supply), and a delivery to a third country is an export. For some orders the marketplace collects and remits the tax itself, such as Amazon in the United Kingdom up to GBP 135, in Norway or in the US states. merchantCENTRAL therefore determines the tax case of every order on its own and puts it on the sales order.

Where the tax case comes from

The rules are kept in the MC Customer Template Mapping (search: Customer Template Mapping). Each rule names a customer template; the order gets its Gen. Bus. Posting Group, VAT Bus. Posting Group and Prices Including VAT.

Field Description
Scope Domestic, EU, Third Country or Specific Country. A rule for a specific country wins over the rule of its zone – this is how you set up the OSS countries one by one.
Country/Region Code Only with scope Specific Country.
Business Type B2C (no VAT ID), B2B (VAT ID present) or Marketplace collects the tax.
Customer Template Code The customer template whose posting groups the order gets.

This is how merchantCENTRAL picks the rule:

  • Consumer (no VAT ID on the order): the ship-to country counts.
  • Business buyer (VAT ID on the billing address): the ship-to country counts as well, the billing country if there is no ship-to country. If the goods stay in the country of your company, the domestic rule applies, even with a foreign VAT ID. The same goes for a buyer with a VAT ID of your country whose goods stay within the EU. A delivery to a third country remains an export.
  • Marketplace collects the tax (the connector reports it per order, Amazon today): the rule of this business type for the ship-to country applies, for example a template without VAT. Without such a rule the ordinary one applies – for the United Kingdom and Norway the third-country rule.
  • The country of your company comes from the Company Information. Without a country/region code there, no order can be told domestic or foreign.

Collective customer

When a marketplace posts to a collective customer (Marketplace Card, Data Protection section), all its orders share one customer. The tax case is then on the document, not on the customer:

  • A domestic order keeps the posting groups of the collective customer and gets the country of your company as VAT Country/Region Code.
  • Every other order gets the general and VAT business posting group of its rule, the country it is taxed in as VAT Country/Region Code and the buyer's VAT Registration No. VAT entries, EC sales list and OSS return then match.
  • Prices Including VAT comes from the template of the rule.
  • The receivables account stays the collective customer's, and the collective customer itself is never changed.

Credit memos for returns and refunds take the tax case of the invoice.

When the VAT cannot be set

If no rule fits a country, if the rule names a customer template that does not exist or lacks a posting group, or if the Company Information has no country, merchantCENTRAL creates no sales order. The marketplace order stays on hold; the other orders go on.

  1. In the Marketplace Orders the order has status On Hold. Hold Reason says No VAT Rule, Customer Template Not Usable or No Company Country, Error Message the case and the next step. The dashboard counts orders on hold.
  2. Open Setup for Hold Reason leads to the customer template mapping, the customer templates or the Company Information.
  3. Once the setup is complete, Import Again creates the sales order with the right tax case. Connectors that store their orders first and create them afterwards (such as Kaufland and Otto) try again on every run by themselves.
  4. For a single order you do not want to set up a rule for: Import with Collective Customer's Groups. The sales order is created with the posting groups of the collective customer and the country it is taxed in, and it is held for the VAT check (field Imported Without VAT Rule). Set the general and VAT business posting group and the VAT country/region code on the sales order as the order is taxed, then choose Confirm VAT.

Customer per buyer

Without a collective customer the import creates a customer per buyer, with the posting groups of the rule of the first order. If the buyer orders again and is taxed differently – delivered to another country, say – the new sales order gets the tax case of its own rule, while the customer keeps its groups. This applies only to customers the import created whose groups are still those of a rule. Groups maintained by hand and customers that existed before stay as they are, except for an order whose tax the marketplace remits and which has a rule of its own. If no rule covers another country of taxation, the import writes a warning to the activity log.

VAT check

Connectors that send the marketplace's tax (Amazon today) are checked: the VAT of the item lines of the sales order is compared with the tax the marketplace charged for these items. Shipping, discounts and gift wrap are left out, because Business Central posts them with a rate of their own. The rounding precision of the currency is tolerated once per unit and once more. If an item of the marketplace order is not on the sales order, nothing is compared.

On a deviation the field On VAT Deviation on the Marketplace Card decides:

  • Hold the order (default): the sales order is held for the VAT check. It can be neither released nor posted, also not by the order automation; the posting preview stays available. The dashboard counts these sales orders.
  • Warn only: the deviation is written to the activity log, and the order goes on.

On the sales order the group VAT Check shows the Marketplace Tax, whether it is Held for VAT Check and whether it was Imported Without VAT Rule. Check the posting groups of the order and the VAT product posting group of its lines, correct them if needed and choose Confirm VAT. The order can then be released and posted, and the order automation takes it along again. Copied documents take over neither the marketplace tax nor the hold.

Setup

  • Enter the Country/Region Code of your company in the Company Information.
  • In the MC Customer Template Mapping, create one rule per zone (Domestic, EU for business buyers, Third Country) and one Specific Country rule for consumers per OSS country.
  • For marketplaces that remit the tax: one rule Marketplace collects the tax per country, with a template without VAT.
  • Every customer template a rule names needs a general business posting group and a VAT business posting group.