Hostgator Adds VAT for EU Customers
 

Who else paid more this month? Are other large US hosts doing this too?

https://support.hostgator.com/articl...-tax-vat-rates

I would have shopped around, apart from the fact that by coincidence or conspiracy, they migrated me to a much faster server just 1 week before the price hike. I received an email one day saying "We're moving you to a much better server", they moved me and it is a lot quicker, then the next week the price went up.

If they did that on purpose hoping to keep me, it worked.

Well, as far as I know they have to do it (maybe if you make more than X Euro in the EU). Most don't and try to fly "under the radar", but once you get to a certain size you can't avoid it anymore.

Not a big deal really as you can get the tax back easily if you've a company in the EU.

If you are VAT registered company that is. There are many companies that are not VAT registered. Alsmo majority of hostagtor clients are private.
Also its not "getting back", you get it back only if you generated more VAT for the country than you spent. Of course in most cases it is so.

Specific tax rates are applied. That is interesting. They moved you to a faster server and they keep you. Not every host is treating EU differently from the rest of the world. Internet sales are worldwide international sales. Although the seller is geographically located in some country, the seller could move to a different country for some time. These kinds of activities could really make someone even more rich.

They did send out a load of confusing emails about it a couple of months ago.

More like they established a corporation in the EU and now have to collect vat. No US company would ever have to collect VAT unless they have a place of business in that country.

Yes, of course, you've to have a VAT-registered company. You don't need to generate more VAT then you spend. I make most of my revenue vat-free (outside EU) and get the VAT is spent back anyway (so I make 100 VAT, spent 500 VAT, the tax authority wires me 400 Euro). I think that this is handled this way EU-wide.

If I'm not mistaken, you have to register for VAT once your annual turnover goes over certain threshold and at least here, that amount is not that high

That's what I was going to say...

Also, as far as I know everyone in the EU has to collect VAT - You don't have to register a VAT number until your turnover is over a certain limit - You can register before you reach that turnover so you can claim back VAT on expenses.....

That's not true, there are special conditions and thresholds - but technically everyone doing business with EU residents or companies has to pay VAT

See:
http://www.eurovat.com/faq.htm
Of course most US companies (especially smaller ones) neither know about that nor will they ever be forced to pay it. But once you become BIG this may come back to you. This isn't well known as most companies big enough also have a place of business in the EU (like Amazon, etc.)

you do not have to collect VAt untill you are VAt registered. So if you are very small company you do not collect VAT (unless you choose to). It depends on your business, sometimes its better to register, sometimes not. Depend on what you sell - goods or services and who are your customers, VAT registered or private.

You are correct - I had a look and you need to register if your turnover is over 79K.....

I thought you had to charge VAT anyway to stop fraud.....

godaddy charges vat aswell on eu purchases nope?

You can register if its less, if you think it´s in your benefit to do so though.

This is coming everywhere soon. I think it is right also, you should charge tax for whatever location the customer is from. then remit that tax to that government. Pain in the ass? Maybe, but it can mostly be automated except for the actual paying them part.