According to VAT obligations in the UK & EU, sellers listing on eBay.co.uk and any European eBay site need to indicate VAT rates. This way, eBay can determine the correct amount of VAT to collect and will not add an extra tax rate to the already VAT-inclusive price.
Besides, if you are using eBay Tax Table when selling on the US, CA, and eBay Motors sites, specifying the VAT Rate is also necessary.
M2E Pro allows you to apply VAT Rates to your eBay items in Selling Policy (eBay > Configuration > Policies > Selling Policy). You only need to specify the VAT Rate and configure the Add VAT Percentage option.
Note
Before you specify the VAT rates, make sure to enable the Revise Rules in your Synchronization Policy. This way, the changes in VAT settings will be applied to the listed eBay items automatically.
Once the Revise Rules are enabled, open your Selling Policy. Indicate the VAT Rate (%) in a separate field under the Taxation section:
Then choose whether you want to add VAT Rate to the item price using the Add VAT Percentage option. If you select “Yes”, will act as excluded and will be added on top of the item price. By selecting “No”, the VAT Rate will be included in the final eBay item price.
Tip
If your Selling Policies are already applied to some items or M2E Pro Listings, you can always change your VAT settings there by clicking Edit Settings > Configuration within the Policy used for this Listing:
Calculating Item Price if VAT Rate is applied
Here is an example of how the item price is calculated if you set to add the VAT Rate on top of the item price (the Add VAT Percentage option is set to “Yes”):
The Product Price is $120. The Price Change is set to Absolute Value Increase of +€3. The VAT Rate is 19%.
Step 1. Сalculate the Item Price taking into account the Product Price value and Price Change settings:
Product Price + Absolute Value Increase = €120.00 + 3 = €123.00
Step 2. Calculate the VAT Rate value for the item:
Product Price with Price Change settings applied x VAT Rate (%) = €123.00 x 19% = €23.37
The final Item Price will be calculated according to the following formula:
(Product Price + Price Change) + VAT Rate = (€120.00 + 3) + €23.37 = €146.37
The Item is listed on eBay with a price of $146.37.
If you set to include the VAT Rate (the Add VAT Percentage option is set to “No”), the same item will be listed on eBay with the price of $123 while the VAT Rate of 19% will be already included in the price.