- How do I sell tax-free to other EU countries?
- Where do I set up reverse charge in the Tax Matrix?
- How do I set up tax exemptions for third countries?
- Why isn’t VAT charged on my invoice?
- How do I configure tax-free exports?
International SalesConfiguring tax exemptions in the tax matrix
In this article, you will learn how to specify in the tax matrix when sales abroad are tax-exempt. The aim is to set up precise conditions to correctly reflect the tax-exempt supply of goods and services to international customers.
With this configuration, you can ensure that invoices and e-invoices automatically include the correct tax rates as well as the necessary legal notices for the EU reverse-charge procedure and exports to third countries such as Switzerland.
How to configure the tax exemption in your tax matrixRechtssichere Konfiguration für den internationalen Handel
Imagine your online shop expanding across borders – a milestone for any business. To ensure this success isn’t derailed by bureaucratic hurdles, a precise tax matrix is essential. This guide will take you step-by-step through the configuration process to ensure that your sales to the EU and third countries are always handled in a legally compliant and tax-correct manner. Follow these steps to manage tax exemptions for international sales accurately.
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Add a row for an EU country
Go to Product Management › Manage Tax Matrix and open an existing tax profile (e.g. “Standard 19 %”). In the Matrix Details section, click the Add Detail button to open the sidebar. Under ‘Country’, select ‘Austria’ and enter the tax rate of 19% for ‘Tax rate for outgoing documents ’. In the ‘REVERSE CHARGE conditions’ drop-down field, select the option ‘EU Reverse tax condition’ and click ‘Apply’. The row will now appear in the table.
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Add a row for a third country
Click ‘Add detail ’ again for exports to non-EU countries. Under ‘Country’, select Switzerland. Enter 0% for the ‘Tax rate for outgoing documents ’. In the ‘REVERSE CHARGE condition ’ field, select the condition ‘Delivery to a third country’ and click ‘Apply’ to apply the rule.
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Save the Tax Matrix
Save your configuration by clicking the ‘Save’ button at the top of the toolbar. From now on, all products assigned to this profile will use these new rules for automatic tax calculation.
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Check whether delivery to EU businesses is VAT-exempt
As a test, create an invoice for a company in Austria for which a VAT registration number has been entered. The system recognises the condition automatically: the item is subject to 0% tax. On the invoice, this is correctly shown as an intra-Community supply (for goods) or a reverse-charge transaction (for services).
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Check tax calculations for EU private customers
Add the product to an invoice for a private customer in Austria (no company name, no VAT number). As the conditions for reverse charge are not met, the exemption does not apply. The item will be charged at the standard tax rate of 19 per cent, as sales to private individuals in other EU countries generally remain subject to tax.
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Check whether exports to third countries are tax-free
Create an invoice for a customer in Switzerland. The system applies the condition ‘Export delivery to a third country’. The item is charged at 0% tax and marked as an export (for goods) or as a supply not subject to tax in Switzerland (for services).
Tips and warnings for the Tax MatrixImportant information on tax configuration
When setting up your tax matrix, please observe the following technical guidelines to avoid error messages and tax discrepancies:
- Domestic sales: Transactions with customers within your own country are generally subject to VAT. The system does not permit reverse-charge conditions for the home country and will abort the save operation with an error message if such an attempt is made.
- 0% tax without conditions: If you define a tax rate of 0% but leave the field for the reverse-charge condition blank, this is treated as a simple tax exemption. In this case, you must specify the reason for the exemption manually in the closing text of the invoice.
- Prerequisites for EU exemptions: For the EU reverse-charge logic to apply, both a company name and a valid VAT number must be entered in the customer’s record .
- Automatic default setup: When a new tax matrix is created automatically, the system sets the reverse-charge condition for all EU Member States – with the exception of your own home country.