Configuring Magento2 for a company registered for VAT in several countries

If your e-commerce site ships to several countries, you may have to register for VAT in a country other than your country of tax residence, for two distinct reasons:

• Because the country you ship to has a lower VAT rate than your country of tax residence and you have voluntarily applied to register for VAT there (this of course then only applies to shipments to that country)
• Because you have reached the distance-selling threshold for that country, above which you are legally required to register there.

If you ship to several countries and are registered for VAT in at least two of them, Magento2 must be configured carefully so that it calculates the correct VAT rate.

Depending on the destination, your sales will be charged with the VAT of your country of tax residence, with the VAT of the other country or countries where you are also registered, or will be exempt from VAT.

You will also need to make sure that the “intra-Community” scheme is not applied to sales to VAT-registered customers in a country other than your country of tax residence, but where you are nevertheless registered for VAT. For example, if you are a Belgian company registered for VAT in France because you have reached the distance-selling threshold set by France, sales to VAT-registered French customers are not made under the intra-Community scheme but under French VAT, whereas if that customer were German, the Belgian intra-Community scheme would apply.

Rules like these are not trivial to configure correctly in Magento2, but it can be done using nothing but Magento’s standard features (automatic customer group assignment, tax classes, etc.), with no custom development at all.