How does custom VAT work in the application?
Due to eBay API limitations, the VAT percentage is not included in the Order API. As a result, when eBay orders sync to Shopify, the VAT amount will not be visible.Good news! You can manually set a custom VAT percentage in the application settings. Once added, your eBay orders will sync to Shopify, including the specified VAT percentage.
Let's learn how it works in the application:
- If you sell an item on eBay for $120, where 20% VAT is included, they need to set 20 as the custom VAT percentage in the app.
- Our app will then calculate VAT and create a VAT-inclusive amount in the order line items, as shown in the screenshot below:
How the Calculation Works Behind the Scenes:
- VAT-inclusive pricing means that the displayed price already includes VAT.
- To extract the VAT amount, we first compute the base price (net amount) using the formula:
- Net Amount = eBay Advertised Price / (1 + VAT/100)
Example Calculation:
- Price (including VAT): $120
- Vat % = 20%
**Step 1: **Calculate the base price (net amount)
**
Base Price = 120/(1 + 20/100) = 120 / 1.20 ≈ 100
Step 2: Calculate the VAT amount
**
VAT Amount = $120 - $100 = $20
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Updated on: 27/03/2025
Thank you!