What is VAT and who is VAT-exempt
Posted on Jul 18th, 2011
VAT is a tax applied in European Union, customers from outside European Union are not charged VAT
Value Added Taxes only apply inside European Union
If you are located outside EU, no VAT will be charged. For example customers form United States, Canada or Japan do not pay VAT. "Located outside EU" means that you (or your business) do not have a residential or commercial address inside European Union.
All private customers inside European Union pay 21% VAT
VAT is applied at rates that vary with each EU country. Consumer purchases are always charged VAT at the rate of the country where the seller is located. A Consumer is anyone who does not purchase for business purposes and does not have a VAT ID number.
Business inside European Union are subject to Reverse Charge
These regulations have changed recently, so if you are not sure please refer to your fiscal consultant. In short: we will not charge VAT for customers in European Union with a VAT ID. Those customers will have to pay VAT later, in their own country.
Business customers must be registered at the VIES database. This requirement has been introduced in February 2011, and if you are not subscribed to the Vies database your business is not VAT exempt anymore. In this case, you either request registration at VIES and wait for your purchase, or contact us for a special purchase link that does charge VAT to EU business purchase. You may be able to recover VAT as you usually do for your national purchases.
Informations in this page are not meant to be a substitute for the advice provided by your own fiscal consultant or local tax office. Please make sure to evaluate your own country's rules and regulations.