Do you charge VAT to EU customers?
 

If you're based in the US, do you VAT register if you have customers in the EU? I believe you are supposed to, but how many processors actually do?

You're not supposed to charge VAT when you do business from Europe with the US, so I don't see why it would be different the other way around.

According to customs authorities, if you do more than a very small amount of electronic commerce including internet website subscriptions or downloadable content to EU customers, you are required to register and pay VAT. I'm just crurious if anyone actually does it.

ask your taxguy this question has been on here a million times and it gets boring

What country are you from?

NO. DUH. NO VAT on US --> europe

Absolutely not, but we must have a their tax munber

I am from the US.

And no, it's not a clear answer. From the UK Revenue and Customs office (there are hundreds of pages, here is just one exerpt):

If you are a non-EU supplier of broadcasting services you will be required to register and account for UK VAT if you supply services that are used and enjoyed in the UK by UK private individuals or non-business organisations (eg government departments).

If you are a non-EU supplier of electronically supplied services providing services to private individuals or non-business organisations in the EU, you will be required to register and account for EU VAT.

Electronically supplied services

If you supply electronically supplied services you will need to read the VAT Information Sheet Electronically supplied services: A guide to interpretation. It provides detailed guidance about the types of services affected by these new arrangements.

An electronically supplied service is likely to be dependent upon the Internet for its provision. However, it can also include other electronic networks used to provide digital content such as telecommunications (fixed or mobile), intranets and extranets, whether public or private. A common indicator of this type of service is that it will typically involve a high degree of automation, often with minimal human intervention.

The definition of electronically supplied services covers a wide variety of services such as:

* supply of websites or web-hosting services
* downloaded software (including updates of software)
* downloaded images, text or information, including making databases available
* digitised books or other electronic publications
* downloaded music, films or games
* electronic auctions or
* internet service packages.

First of all, you have nothing to do with the UK Revenue and Customs. You don't live or operate from the UK, nor do you own a UK business. Why are you even looking at this.

This is how it works if you're operating from the UK; registering for VAT is optional, unlike in most countries. If you stay below a 60k pounds profit limit each year you don't have to register for VAT. If you are registered for VAT, and if you do business with companies located outside the EU, a 0% VAT rate applies. You have to charge 17.5% VAT to companies within the EU and you will have to pay local VAT from other countries.

All this stuff does not concern you. The reason why I asked from what country you were was because your question contradicted itself. You were using the term VAT, which is mainly used in the UK (Americans call it TAX), and you implied you were from the US.

Again, the Internet is not as gray as it may seem. Stick to the 0% VAT rate if you are doing business overseas. Why don't you talk to your tax consultant for a bit?

I appreciate your input and have talked to our tax consultants as well as UK tax consultants and the UK revenue dept. I understand that we are not a UK company, however these rules apply to non-UK, non-EU vendors. I am familiar with how VAT works and how it works once products are within the EU, but apparently if you send more than a certain amount into the EU for consumption you are also required to pay VAT. I just think most people don't do it, but that doesn't mean it's not technically required.

Whether or not you are applicable for VAT depends on how the regulations in the US are and whether or not you are incorporated (Limited Liability Company) or just a sole trader (or similar). I don't think alot of webmasters in the US operating from their desk at home are incorporated.

I'm just wondering why you talked to UK tax consultants about this. May I ask why, out of curiosity?

Basically because we don't want to get a bill from various EU revenue and customs departments or get audited by them since many of our sales occur within the EU. Imagine if you're a US company and out of nowhere you received a bill for 17.5% of every sale you made within the EU, even though you never collected it from the customer because you didn't think you had to.