Author Topic: EU Angels, step in... (Read 1545 times)

Ketamininja · « **on:** November 10, 2005, 12:25:02 pm »

On my payment page it says:
"EU members will be subject to VAT at a rate of 17.5%".

I asked sony billing team about this, as 17.5% applies only to the UK (and maybe one other member state). Belguim, for example, has a VAT rate of 15%.

Sony confirmed this is not a mistake, even tho under EU Vat regulations for E-Commerce, "the VAT applicable must be the VAT rate of the member state where the customer resides".

I have queried this with the European Commision, as I think Sony are acting illegally - probably not to make money as such, as there are VAT rates around 20% too in some states, but to lower administration costs.

Could other non-UK members please check their billing page and see if it also says 17.5%, because the answers the TSRs were contradicting themselves in the convo.

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Response (TSR Joe N.)   11/01/2005 11:27 AM
The VAT tax of 17.5% is charged because our EU division of the company is based in the UK. The UK's VAT tax as per the documentation you sent is 17.5%. So all states in the EU will pay 17.5% to us because we have to pay 17.5% to the EU as we are based in the UK.

Customer (Clem Clark)   10/31/2005 03:09 PM
So you are saying that the website statement is correct?
But that can't be correct, not according to EU VAT laws?

Response (TSR Joe N.)   10/31/2005 02:14 PM
The entire EU is charged a 17.5% VAT tax.

Customer (Clem Clark)   10/31/2005 01:24 PM
I am asking a question UNIQUE to your website. No-one can answer this information but you.

I am sking if your statement made on "The Matrix Online" subscription payment page is correct (I have already pasted the statement twice, see below).

One of the TSRs has already said something that contradicts this statemnt. So can you confirm to me which is correct? I am not interested in what applies to my country - the statement is applying to the whole EU.

Response (TSR Joe N.)   10/31/2005 12:17 PM
This tax is charged to you by the EU, you would need to contact your local representitive to have them explain EU law and tax information.

Customer (Clem Clark)   10/30/2005 03:33 AM
Your subscription charge page says:
"Customers who reside within the European Union will be charged VAT equal to 17.5% of their subscription fees."

The statement suggests that ALL EU members will be charged 17.5%.
Can you confirm that this statement is incorrect, since it conflicts with your infomation:

"...the Vat Depends upon the Country the charge is going to.".

Thanks.

Response (TSR Nash K.)   10/29/2005 01:03 PM
You can get more information regarding this from your Bank. They can provide you the exact and more detailed information on this. We only charge the Subscription fees for the Product but the Vat Depends upon the Country the charge is going to.

Customer (Clem Clark)   10/27/2005 10:19 AM
"Customers who reside within the European Union will be charged VAT equal to 17.5% of their subscription fees."

Could you give information about how the VAT % is obtained for the entire EU for the subscription periods, and the exact nature of product sold under this subscription, with reference to the VAT Rates set in the following documents:
Main VAT info: http://europa.eu.int/comm/taxation_customs/resources/documents/taxation/vat/how_vat_works/rates/vat_rates_2005_en.pdf
eCommercer VAT: http://europa.eu.int/comm/taxation_customs/taxation/vat/consumers/e-commerce/article_1610_en.htm#16rate

I cannot locate information on 17.5% for all EU member states.

Thanks.

Anonymous · « **Reply #1 on:** November 10, 2005, 12:42:27 pm »

I often ship software to customers in member states for whom I don't charge VAT - however I can only do that if they provide with their own tax registration numbers. If they can't do that, VAT becomes an unreclaimable expense.

As the country of origin is the UK, they have to charge VAT on all exports except to those who can demonstrate they would be able to pay it back - this is part of the Zero VAT rules to simplify things for business. So far as consumers are concerned, if you buy from the UK you will pay VAT as a matter of course and you cannot claim it back. This is also why they removed Duty Free within the EU.

http://customs.hmrc.gov.uk/channelsPortalWebApp/downloadFile?contentID=HMCE_CL_000130

Ketamininja · « **Reply #2 on:** November 10, 2005, 01:07:55 pm »

As Sony is VAT registered, they can claim back VAT, and we all get charged of course.
Those customers who are VAT registered, can claim any VAT charges back through their gov, so long as it is an expense applicable to the business.

However, Sony, in relation to e-commerce, rather than physical goods that can be shipped, should be adhering to EU law, which apparently says:

What rate of tax is applicable as a result of the Directive to supplies of digital services?

For a business using the special scheme, the rate of tax to be charged on the value of a transaction is the standard rate of VAT applicable in the Member State where the customer is resident.

To see the rates, see http://europa.eu.int/comm/taxation_customs/taxation/vat/consumers/e-commerce/article_1610_en.htm#16rate

You see, it's all because we are not buying the goods from the UK.
We are purchasing from where we are in the world, as e-commence is defined. Shipping goods has a physical duty to pay.

Anonymous · « **Reply #3 on:** November 10, 2005, 02:52:05 pm »

However, they may be charging based on where the transaction takes place, and as money changes hands in the UK, VAT would be payable. I'm just playing devil's advocate of course

Ketamininja · « **Reply #4 on:** November 11, 2005, 05:03:07 am »

Of course

However, I've just had it confirmed by the EU Commision.

Directive 2002/38/EC has provided for special rules regarding the VAT situation applicable to 'electronically supplied services'. In short this means that if the services fall within the scope of the Directive then they will be taxed in the country where the (private) customer resides rather than where the supplier is located.

The idea that proves this is if Sony Europe did not exist, and EU members were being charged from Sony USA, then EU members would still have to pay VAT, but non-EU members wouldn't. So the office location does not matter.