Settlement of bundle products

[svanteschubert]

Background

An item with 2 VAT rates: Book and CD

Challenges

Tax code A: Double taxation possible

Approval in Extension planned

Open Questions

Approval in Extenstion planned

Approaches

Implementation in 2021 planned Solution via tax codes Also being discussed at CEN level

Update: Implementation in Extension would be possible but is not currently in focus

Further Procedure

B2B- Relevant

[edmundgray]

There should only be one VAT rate per line item. If a Book and CD are sold as an Item, then a single VAT Rate has to be determined.
In Ireland this is called a composite supply. A composite supply has one principal element referred to as a principal supply with the other elements of that supply being described as ancillary supplies. These always accompany the principal supply and the main feature of an ancillary supply is that it would not make sense from an economic or practical point of view to supply it other than in the context of that principal supply. A single rate of VAT applies to the entire transaction at the rate applicable to the principal supply.

[edmundgray]

However if MS have different rules for composite supplies, then Country Extensions will have to be developed for this.

[phax]

Items with multiple VAT rates (we have cases in Austria as well) need to be split into multiple invoice lines, where each invoice line contains exactly one VAT rate. Anything else would be too difficult (and is not supported by the existing extension scope)

Edit: Scenarios in Austria "Geschenkkorb" (gift basket) - multiple objects with different VAT rates are invoiced under the same VAT rate

[AP-G]

From an automatic processing point of view unbundling those products will fail in some (special) cases as the "bracket" is needed. Example: Chocolate for easter with a free plush bunny is sold with the VAT of the chocolate to the consumer at the point of sale. But the reseller needs to pay two different VAT rates with the incoming invoice. A clear bundling-bracket-connection is needed between the main product (chocolate) and the "supplementary" easter bunny. It is a very common and widely used process at German retailers for decades via EDIFACT and the systems are handling this very easy. So it is not "too difficult", but sure not simple. Both UBL and CII support this. So the scope of allowed extensions should be aligned to support widely used business practice.

[AP-G]

One more example: Strawberries are often sold pre-packed. The package has got a different VAT rate than the fruits. From a business perspective it is not logical to separate those. And yes, I know that for some products it is possible to get a special VAT rate from the ministry of finance like 10.7%... but not in all cases.

[phax]

@AP-G can you please post an example snippet in UBL and CII what you exactly refer to, to make sure we get the separation between a) main and sub efforts ("Haupt- und Nebenleistung") and b) mixed VAT rates ("Mischsteuersatz") Thanks