Can I configure taxes for both digital and physical products if I am selling within the EU?

Problem Statement

How do I collect taxes when selling both physical and digital products in the EU? How do I configure multiple tax profiles?

Solution

Create two tax profiles—one for digital and one for physical products. Assign the primary profile to most products and the secondary profile to the rest. Set your primary profile based on whether most of your plans are digital or physical.

Steps to Set It Up

1. Configure two tax profiles—one digital, one physical. When creating each profile, choose digital or non-digital:

2. Digital products: The tax rate configured for each country on the tax settings page is applied.

3. Physical products: Add your origin country first. The VAT rate of your origin country is applied to physical products sold to EU customers (until you exceed country-specific sales thresholds):

4. Threshold override: When you exceed the annual sales threshold in a member state, register for VAT there and override the rate for that country. For example, if Belgium is your origin and you exceed the threshold in France, configure the France tax rate so French customers get the France rate for physical products.

5. Assign tax profiles to plans/addons/charges. The primary profile applies to all products by default. Edit physical plans/addons/charges to use the secondary (physical) profile.

Additional Information

• EU VAT
• Setting up multiple tax profiles