Setting Up EU VAT Rates for Digital Products

EU VAT laws for digital goods changed on 1 January 2015, affecting B2C transactions only. VAT on digital goods must be calculated based on customer location, and you’re required to collect evidence of this via an IP address and/or Billing Address.

In addition, you need to set up VAT rates in your WooCommerce store to charge the correct amount. This guide shows you how to set up rates specific to Digital Goods.

Setting Up Your Tax Classes ↑ Back to top

If you’re only selling digital goods, VAT rates can be added under Standard Rates in WooCommerce.

If you’re selling/distributing both digital and regular products, you can create and use a new tax class, for example Digital Goods, and update them.

To set up EU VAT rates in a new tax class:

  1. Go to: WooCommerce > Settings > Tax.
  2. Select the Additional Tax Classes setting.
  3. Add a new tax class to the list, for example, Digital Goods.
  4. Save.

Once saved, you can begin assigning this tax class to Digital Goods, but first input the rates.

Setting Up the EU VAT Rates ↑ Back to top

The next step is to input the EU VAT Rates into WooCommerce.

Look Up the Latest VAT Rates ↑ Back to top

The latest VAT rates can be found at the Europa website in a PDF document. If these rates change, you need to update the VAT rates for your store.

Input Rates ↑ Back to top

  1. Go to: WooCommerce > Settings > Tax > Digital Goods (now a new tab after you created a new tax class).
  2. Enter rates for all EU member states. See our guide on Setting Up Tax Rates in WooCommerce.

At the time of last update, Standard VAT rates were:

Country Code Rate %
AT 20.0000
BE 21.0000
BG 20.0000
CY 19.0000
CZ 21.0000
DE 19.0000
DK 25.0000
EE 20.0000
EL 24.0000
ES 21.0000
FI 24.0000
FR 20.0000
GB 20.0000
HR 25.0000
HU 27.0000
IE 23.0000
IT 22.0000
LT 21.0000
LU 17.0000
LV 21.0000
MT 18.0000
NL 21.0000
PL 23.0000
PT 23.0000
RO 19.0000
SI 22.0000
SE 25.0000
SK 20.0000

Alternatively, if you have a CSV file in the correct format, you can import the VAT rates to save time. Here are the above rates in CSV format with tax class Digital Goods: vat_rates.csv

To import this file, select Import Rates on the tax input page, and an importer will appear.

Tax Rates Importer
Tax Rates Importer

Once rates have been uploaded, imported or input, you should see a table similar to this:

The EU VAT Rates
EU VAT Rates

With EU VAT rates set up, users buying a product with the Digital Goods tax class are charged tax based on their location, not the store location.

Assigning the Tax Class to Products ↑ Back to top

To apply this tax class to digital products in WooCommerce:

  1. Go to: Products > Products.
  2. Edit a product.
  3. Select Digital Goods from the Tax Class dropdown.
  4. Save.
Setting the product tax class
Setting the product tax class

You can also bulk-edit products:

  1. Go to: Products > Products.
  2. Tick the box to the left of each of the products you want to bulk-edit.
  3. Select Edit from the bulk actions dropdown.
  4. Apply.

    Bulk Actions
    Bulk Actions
  5. Set the Tax Class in the dropdown box.
  6. Update.

Questions ↑ Back to top

Have a question or need assistance? Get in touch with a Happiness Engineer via the Help Desk.

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