Advice needed - Dealing with EU VAT

[xtremarketer]

Looking for some advice.

I've been selling WSO's and promoting as an affiliate W+ and Jvzoo offers.

Since I'm in the EU (Spain) I must collect VAT from EU buyers.

But how should I do it? add VAT on top of selling price so customer pays for it or deduct the VAT from the selling price and take it from my own pocket?

Most importantly... Is there a way to add the VAT when using Jvzoo and W+ as selling plattforms.... or will just Paypal add it if I configure it in my Paypal account?

And..... what about affiliate payments, I don't think I can charge VAT if I receive a commission from an EU affiliate.

Oh and, lastly..... if I decide to take the VAT from my own pocket... how do I know which sales are VAT applicable? I don't see in Paypal a way to know the country of the buyer so I know if VAT has to be applied....

[Fredrik Aurdal]

Think you just have to take it from your overall sales. Shouldn't be more difficult than that.

[Val Wilson]

I've been trying to get to the bottom of this as well, but it's a bit of a grey area. For sales as an affiliate, my understanding is that there is no problem - you do not own the product, so are not liable to VAT on your commission. That is up to the product vendor.

As a vendor, if you sell goods within the EU, you have to charge VAT at the applicable rate (the rate in the buyer's country). But if you sell outside the EU, the goods are exempt from VAT. The problem is proving where the buyer is from - in most cases with downloadable products, all you have is an email, which could be from anywhere.

Rememember none of this matters unless you are registered for VAT yourself - if you are not, you do not have to charge VAT at all.

[xtremarketer]

Originally Posted by Val Wilson

I've been trying to get to the bottom of this as well, but it's a bit of a grey area. For sales as an affiliate, my understanding is that there is no problem - you do not own the product, so are not liable to VAT on your commission. That is up to the product vendor.

As a vendor, if you sell goods within the EU, you have to charge VAT at the applicable rate (the rate in the buyer's country). But if you sell outside the EU, the goods are exempt from VAT. The problem is proving where the buyer is from - in most cases with downloadable products, all you have is an email, which could be from anywhere.

Rememember none of this matters unless you are registered for VAT yourself - if you are not, you do not have to charge VAT at all.

Well, I think the issue can be solved by setting up taxes in Paypal.

Problem is that this doesn't seem to work with Jvzoo adaptative payments, don't know about Warriorplus.

"The problem is proving where the buyer is from - in most cases with downloadable products, all you have is an email, which could be from anywhere." That's my problem right now, I've to collect VAT from previous WSO sales, but I don't know what countries are the payments coming from. Does anyone know if there is a way to find it out in Paypal so I know what payments are subject to VAT?

[xtremarketer]

Originally Posted by Fredrik Aurdal

Think you just have to take it from your overall sales. Shouldn't be more difficult than that.

Quite difficult, as I don't know what sales are coming from EU.

[Alexa Smith]

I wish you well, with your VAT concerns, but you really need advice from an accountant, not from other Warriors.

[ddev]

Hi Xtrememarketer,

If i'm not wrong Plimus.com will automatically handle VAT when required. Take a look to verify this. Also check Click2Sell.Eu.

Best Regards,

Diego.

[lollobrigida]

I recommend you get in touch with an accountant or tax person (in Spain) that is experienced with the topic. That stuff can be pretty tricky. AFAIK it depends on WHERE the goods are delivered or the services are rendered. The problem is you can't answer this question with logic or common sense... it has to be answered according to your tax laws in Spain.

Apart from that... I don't have to charge VAT in any other EU country than my own. It might be the same in Spain.

Ask someone who will know for sure.

[xtremarketer]

Originally Posted by Alexa Smith

I wish you well, with your VAT concerns, but you really need advice from an accountant, not from other Warriors.

I know is a forum isn't the proper place to look for legal advice, but IM in general in Spain is a grey area and accountants don't have a clue. So I'm just looking for advice from EU people who where in the same situation as I am today...

[morg2k2]

Well the European Union directive is very clear about it, everything you sell inside ofthe EU (goods or services) the applied VAT tax should be the one in use in the customer country. Now if the buyer is outside of the EU should be his country who will charge him with the VAT, how? I dont know? So if you dont have a way to charge the VAT you will need to pay for it from your profit.

Regards,
Morg