VAT charged for USA download

G

Grumpy

Registered User
Messages
84
US company want to charge me VAT on software download.
Is this right?
They refer to EU July 2003 regulations.
 
Grumpy said:
US company want to charge me VAT on software download.
Is this right?
They refer to EU July 2003 regulations.
Click to expand...

I would have thought unless you're VAT registered you should be charged VAT by a company outside this jurisdiction?
 
Judging by 2003 is indeed a significant date with respect to non EU online stores charging EU buyers VAT.
 
Update - see here:
Following changes introduced on 1 July 2003 (under Directive 2002/38/EC), non-EU businesses providing digital electronic commerce and entertainment products and services to EU countries are also required to register with the tax authorities in the relevant EU member state, and to collect VAT on their sales at the appropriate rate, according to the location of the purchaser. Alternatively, under a special scheme, non-EU businesses may register and account for VAT on only one EU member state. This produces distortions as the rate of VAT is that of the member state of registration, not where the customer is located, and an alternative approach is therefore under negotiation, whereby VAT is charged at the rate of the member state where the purchaser is located.
Click to expand...
 
This policy also applies to books (VAT exempt in Ireland) that you buy via download or for online reading in the US (typically technical books). In some cases the extra VAT might make the cost of the postage justifiable for the hard copy.

What about carbon footprints and product airmiles one might well ask.
 
Yes, there are several US companies that collect VAT on downloads.

Remember, the US company isn't "charging" you VAT - it's merely collecting it for the Irish government.
 
Apparently the EU are instructing US companies to collect VAT and forward it to them/it.The threat of refusing copyright protection has been made if they don't comply.
Its a strange situation where one state instructs the citizens of another state to collect taxes for it.What action can the EU take if the VAT is not forwarded on to it?
 
Yes!
IM(NS)HO EU have no right to instruct US citizens/companies, without a presence in the EU and in the absence of a US/EU agreement.
It does have the right to require its own citizens to pay VAT on goods or services sourced outside its territory.
 
You must log in or register to reply here.
Back
Top