UK & EUROPEAN WARRIORS - 19% VAT ON EU DIGITAL DOWNLOADS! | Warrior Forum - The #1 Digital Marketing Forum & Marketplace

16 years ago

Thats what I was thinking...I wanted to ask my fathers lawyer this for some time...since my target market is USA and/or NA I can't help it if EU customers want to buy.
I could do IP blocking or a special thank you page and stuff only for EU customers but that would be too much trouble

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Jim M

16 years ago

As far as a seller is concerned you only need to register / charge VAT when you break through £54000 turnover (that what it used to be anyhow), which is why many small internet marketers don't need to be concerned.

I'm more miffed at the thought of being charged 19%!

By the way - if you live in the UK - when you're buying some downloadable products you find that you will be charged VAT - however - when you change you're location to say a zip code in any USA state - the VAT magically vanishes!

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daddyg

16 years ago

Originally Posted by Jim M

As far as a seller is concerned you only need to register / charge VAT when you break through £54000 turnover (that what it used to be anyhow), which is why many small internet marketers don't need to be concerned.

I'm more miffed at the thought of being charged 19%!

By the way - if you live in the UK - when you're buying some downloadable products you find that you will be charged VAT - however - when you change you're location to say a zip code in any USA state - the VAT magically vanishes!

Nice tip.

Whilst I like Camtasia Studio, I don't particularly like the way they conduct business in regards to upgrades. I purchased v5 of Camtasia about 4 months ago. About 2 months later v6 came out and they asked for another $149 to upgrade. I complained and they upgraded me for free quickly but didn't make any attempt to justify their policy. I don't know why they don't just give buyers 1 years free upgrades...it would be much clearer and upfront.

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Andyhenry

16 years ago

Originally Posted by Jim M

As far as a seller is concerned you only need to register / charge VAT when you break through £54000 turnover (that what it used to be anyhow), which is why many small internet marketers don't need to be concerned.

I'm more miffed at the thought of being charged 19%!

By the way - if you live in the UK - when you're buying some downloadable products you find that you will be charged VAT - however - when you change you're location to say a zip code in any USA state - the VAT magically vanishes!

That works with Clickbank (it's surprising how many people use the postcode -90210) but I just upgraded Camtasia too and it requires you give a 'state' for US addresses, and since they actually do post you a cd with your copy of camtasia on, there are 2 reasons to keep it real.

Andy

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ExRat

16 years ago

Hi Jim,

By the way - if you live in the UK - when you're buying some downloadable products you find that you will be charged VAT - however - when you change you're location to say a zip code in any USA state - the VAT magically vanishes!

Nice tip, but one that I would probably keep to myself, or at least, avoid incriminating myself with.

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Mark Brock

16 years ago

I'm not up to date on the whole VAT thing as I don't earn anywhere near the threshold needed to be required to register (yet); but isn't charging more for VAT than the country you reside in charges illegal?

As I live in the UK, I fully expect to be charged VAT, but only at the correct amount of 15% (at the moment).

If I was charged 19% I'd be asking some serious questions of both the payment processor and of HMRC to find out if what has been done is in fact legal.

Can anyone clarify whether or not this approach is actually legal?

Mark

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Jim M 16 years ago

Nice tip, but one that I would probably keep to myself, or at least, avoid incriminating myself with. posted by ExRat

Didn't say I used it - just something I noticed once when I selected the wrong country in the drop down menu
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- ExRat 16 years ago
  
  Hi Jim,
  
  Didn't say I used it - just something I noticed once when I selected the wrong country in the drop down menu
  
  I had a feeling that was what you meant.
  
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  Roger Davis
  
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simbad

Banned 16 years ago

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Jim M

16 years ago

Originally Posted by SimBad

The VAT is different in different countries of the EU. If it is 15% in UK, and you buy something in Germany - it might be 19% in Germany. Then you will pay the 19%, not 15%. It's based on the country of the seller.

Thanks for that - you've probably got the answer right there - so there's not a lot we can do about the 19% then

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Stephen Crooks 16 years ago

Just go voluntarily VAT registered anyway, it is a bit of extra work but it is worth it.
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Jon Alexander

16 years ago

amazing how many people select the 'wrong' location!

:-)

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pearsonbrown

16 years ago

"The VAT is different in different countries of the EU. If it is 15% in UK, and you buy something in Germany - it might be 19% in Germany. Then you will pay the 19%, not 15%. It's based on the country of the seller."

Not for online purchases. Then the sale is considered to take place in the country of the purchaser. So if I buy an online product from Germany, it's the UK rate of VAT which is used.

Pearson

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Mark Brock

16 years ago

Originally Posted by simbad

The VAT is different in different countries of the EU. If it is 15% in UK, and you buy something in Germany - it might be 19% in Germany. Then you will pay the 19%, not 15%. It's based on the country of the seller.

Hope this explains it, otherwise please ask me to clarify.

That makes sense to me Sinbad, but I was also led to believe that what Pearson said is actually the case when dealing with downloadable products.

Originally Posted by pearsonbrown

Not for online purchases. Then the sale is considered to take place in the country of the purchaser. So if I buy an online product from Germany, it's the UK rate of VAT which is used.

This is why this whole issue's got me a bit confused. Surely they can't go ahead and charge 19% VAT on a downloadable product sold to a UK customer, when by right that customer should only be paying 15%?!

I'm still left baffled by this.

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Thomas

16 years ago

Originally Posted by Jim M

"Digital products sold by asknet into the European Union and delivered via download are always charged at 19% VAT"

Techsmith are completey wrong to do this.

Here's a direct quote from a section about VAT on electronically-delivered products and services from the European Commissions' "Taxation & Customs Union" website: "The VAT rate applicable to non-EU suppliers' sales to consumers will in any Member State be the same as the rate charged by a local supplier." (Therefore, since you (Jim) are in Northern Ireland, you should only be charged 15%.)

Every country in the European Union has their own VAT rates and, afaik, only 6 of them charge 19% on some products.

I don't know how it works when the company is based abroad but, if it were based in the E.U., and Techsmith were charging 19% in a country with a higher or lower rate, there's a strong chance they would end up facing prosecution for tax fraud.

Tommy.

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Mark Brock

16 years ago

Originally Posted by Thomas

Techsmith are completey wrong to do this.

Here's a direct quote from a section about VAT on electronically-delivered products and services from the European Commissions' "Taxation & Customs Union" website: "The VAT rate applicable to non-EU suppliers' sales to consumers will in any Member State be the same as the rate charged by a local supplier." (Therefore, since you (Jim) are in Northern Ireland, you should only be charged 15%.)

Every country in the European Union has their own VAT rates and, afaik, only 6 of them charge 19% on some products.

I don't know how it works when the company is based abroad but, if it were based in the E.U., and Techsmith were charging 19% in a country with a higher or lower rate, there's a strong chance they would end up facing prosecution for tax fraud.

Tommy.

Thanks for answering that for me Thomas.

I knew something about it wasn't right but I wasn't sure either way. Like I said, if I had been the one charged the 19% instead of the correct 15%, I would have been asking some serious questions; and would have reported it to HMRC to see what they thought of it and whether or not they could do anything about it.

I'm sure the HMRC would be very interested to find this information out.

Mark

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pearsonbrown

16 years ago

When I used to live in France and buy books from Amazon UK, Amazon would charge me VAT at the French rate on books I bought, even though books are zero-rated in the UK. I think you can trust that Amazon got it right - or they would have had huge problems with Revenue and Customs by now ;-)

The main confusion arises because in the US system the sales tax is charged depending upon the domicile of the vendor and in the EU system it is based on the domicile of the customer.

When I had an offline business in France, dealing quite often with suppliers and customers in the rest of Europe, this VAT business was a nightmare. I was fined by the French authorities on a couple of occasions for 'breaches' that I still don't understand.

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Jim M

16 years ago

Originally Posted by pearsonbrown

When I used to live in France and buy books from Amazon UK, Amazon would charge me VAT at the French rate on books I bought, even though books are zero-rated in the UK. I think you can trust that Amazon got it right - or they would have had huge problems with Revenue and Customs by now ;-)

The main confusion arises because in the US system the sales tax is charged depending upon the domicile of the vendor and in the EU system it is based on the domicile of the customer.

When I had an offline business in France, dealing quite often with suppliers and customers in the rest of Europe, this VAT business was a nightmare. I was fined by the French authorities on a couple of occasions for 'breaches' that I still don't understand.

Thanks for your update on this - I'm sure many will find your information useful.

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UK & EUROPEAN WARRIORS - 19% VAT ON EU DIGITAL DOWNLOADS!

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