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28. January 2008, 17:02:14
alanback 
Subject: VAT on User Fees?
Since I work in the international tax department of a major accounting firm, I have some experience with VAT issues even though the US is the only major economy that doesn't have one.  The announcement that membership fees would be subject to VAT as of 1 Februrary made me scratch my head a bit.  I have a colleague who recently returned from spending several years working in Prague so I put the question to him.  He believes that in principle the tax should only be imposed on Czech residents.  Obviously there can be a difference between "in principle" and "in practice", but I wonder whether it's worth looking into a bit more closely.  My colleague would be willing to refer Fencer to our Prague office if that would be helpful.

28. January 2008, 17:27:39
Rose 
Subject: Re: VAT on User Fees?
alanback: That makes sense. Any one visiting Canada that buys something with our tax can get that tax refunded back to them by filling out a form. I wondered about that VAT as well.

28. January 2008, 18:24:28
Fencer 
Subject: Re: VAT on User Fees?
alanback: It's a VAT applied to me, not to BrainKing users. It is not important where the particular customer is from (especially where it is not mandatory to fill any personal information to the Profile).

28. January 2008, 18:37:02
pauloaguia 
Subject: Re: VAT on User Fees?
Fencer: I type to slow... :P

28. January 2008, 18:33:43
pauloaguia 
Subject: Re: VAT on User Fees?
alanback: alanback: Actually, VAT must be taxed for any UE resident, not just Czech Republic. As to residents from other countries, the supplied services takes place where the customer is established. Therefore I think it should be safe to assume that Fencer could charge no VAT for residents outside the UE.

At least I think that's what the European Directives about VAT state (I'm no expert in the area). But then again, Czech Republic may have gone beyond the directives and added some other rules on their own.

The main problem here, I think, is how to prove without a doubt if someone is a UE resident or not? You're just buying an account, there's not even a mailing address envolved. Getting this information from IP address could be a possibility, I think, but it's a rather obscure system (and not even bullet proof, IP addresses can be spoofed)
That's why most (smaller) businesses decide to charge VAT no matter what. They prefer the simplicity of order processing as opposed to any competitive advantage that lower prices could give them. Usually only larger companies, with clients spread out worldwide and a large volume of business go through the trouble of implementing measures to treat their clients according to their geographic residence.

But then again, like I mentioned, I'm no expert on the matter...

28. January 2008, 22:35:44
Bernice 
Subject: Re: VAT on User Fees?
Modified by Bernice (28. January 2008, 22:44:09)
alanback: I asked the same or similar question on 2 January 2008 on this board,but was ignored.....

My understanding is the same as yours....you do NOT have to pay another countries taxes as imposed by them on their own citizens. As I said in my post then....if we do work for someone in the UK for instance they are not and cannot be charged VAT or GST as it is called in Australia...if it a universal tax then that is a different story.

29. January 2008, 02:32:36
rod03801 
Subject: Re: VAT on User Fees?
Bernice: But regardless of all that, I think the main point is that no one here HAS to give a confirmed address. If everyone knew that anyone outside the EU didn't have to pay the extra, everyone could just say they lived in any country outside the EU.

So, even if it was true that Americans (or whoever) don't have to pay the "VAT" tax, there is no way currently to prove that you are or are not American (or whoever)

29. January 2008, 11:25:33
Bernice 
Subject: Re: VAT on User Fees?
rod03801: I can feel another holiday coming on ROFLMBO :)

1. February 2008, 16:37:07
Czuch 
Subject: Re: VAT on User Fees?
Bernice:


Me too!

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