How to determine reduced tax rates for my products

The most important things in a nutshell:

In this article, we explain step by step how you can determine the reduced tax rates of your products for each EU country using the corresponding customs tariff number. The result of this query can then be used for the evaluations of Taxdoo.

To enable a product to be assessed in our analyses with a reduced tax rate, the SKU (article number) of the product needs to be entered into our system for the corresponding tax rate. This can be done either manually by entering the SKU in the dashboard under "Products" > "Tax-reduced products" or by CSV upload (see uploading reduced articles as a CSV file).

If it's not known whether reduced tax rates can be applied to a product, we offer you a function for determining the country-specific tax rates based on the customs tariff numbers. You can find this function in the dashboard under "Products" > "Tax-reduced products" under the tab Determine reduced tax rates. Please note that Taxdoo assumes no liability for the correctness of the proposed tax rates.

In order to determine the tax rates, the SKU and the customs tariff number of the product are required. For the customs tariff number, please only use the 8-digit goods number of the index of goods for external trade statistics. You can find this index on the homepage of the Federal Statistical Office.

The information has to be uploaded to the dashboard as a CSV file. The file needs to have the following structure and be coded in UTF-8 (this is especially relevant if umlauts are used in the SKUs). A semicolon has to be used as the separator.

product_identifier;commodity_code
SKU1;Customstariffnumber1
SKU2;Customstariffnumber2
SKU3;Customstariffnumber3

Any word-processing or spreadsheet program can be used to create the file. However, it's important that the raw data meets the above structure requirement when the file is saved.

Example

1. Create the CSV file and save in UTF-8 (here Microsoft Excel)

Create an empty spreadsheet in Microsoft Excel and write in the first cell (A1) product_identifier. Fill the second cell (B1) with the value commodity_code. In the following rows, enter the SKUs of your products under A and the associated customs tariff numbers under B.

Important: The file can contain a maximum of 1,000 lines. If you get an error after uploading that the file contains too many lines, reduce the number of lines accordingly.

Once all SKUs and customs tariff numbers are entered, save the file as a CSV UTF-8.

2. Select the file

In the Taxdoo dashboard, navigate to "Products" > "Reduced tax rates" and then click on the tab Determine tax rates. Click on Select file and enter the CSV file you just created.

3. Select Upload products

Click on Upload products.

4. The tax rates are determined

After uploading the file, you'll receive a confirmation. You'll receive an email notification once the tax rates have been determined.

5. The file is available after determining the tax rates

The file containing the results will now be available.

First, download the file and check whether all entries are valid. No entries should exhibit the value 1 in the failed column. If the value 1 is entered in the failed column, the check for this row has failed. The most common reason for this is that an invalid customs tariff number was entered.

6. Transfer the entries to the Taxdoo system

The results can now be transferred directly to our system. To do so, click on the button Apply. If there are rows where the check failed, these will not be considered when transferring the entries into our system; only valid entries will be adopted.

Important: When applying, only lines that have resulted in a reduced tax rate for the product are taken into account. If an entry for a reduced tax rate already exists for a product and the new query does not result in a reduced tax rate, applying the result file does not lead to the existing entry being removed. Such entries must be removed manually in the Reduced Tax Rates area.

7. Check the entries

You can check these entries directly after transfer in the Reduced tax rates tab.