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Explanations

How much VAT is due on eBooks in Mount Athos, Greece?

• 0%

Mount Athos is a protected region within Greece that pays no VAT. In the rest of Greece, printed books are charged at 6.5% VAT, but ebooks are at the standard VAT rate of 23%.

In Estonia, is VAT due on a manually emailed PDF?

• No

Estonia has advised its customers that they don’t have to charge VAT for manually emailed PDFs.

In the Netherlands, is VAT due on a manually emailed PDF?

• This country’s current advice is contradictory

The Netherlands tax office has given conflicting advice to different customers when they’ve asked about manually emailing PDFs.

In the UK, is VAT due on a manually emailed PDF?

• No

Although the UK tax office initially contradicted itself, it now has clear guidelines that you don’t have to charge VAT on manually emailed PDFs.

In France, is VAT due on a manually emailed PDF?

• No-one knows

France and 24 other EU countries have yet to make any statement about whether manually emailed PDFs are exempt from VAT.

When does Italy charge 22% VAT on eBooks?

• When they don’t have an ISBN

On 1 January 2015, Italy changed its VAT rate for ebooks to 4%, but excluded ebooks without ISBNs. VAT on these is charged at the standard rate of 22% when they’re sold in Italy, regardless of where they’re published.

Which of the following constitute two non-contradictory pieces of evidence of the customer’s location?

• Customer’s billing address and IP address

Customer’s billing address and PayPal country code: the PayPal country code is generated from the billing address, so this is only one piece of information. Customer’s self-declared address and PayPal country code: the PayPal country code is generated from the billing address, and the customer is self-declaring the same information (their billing address); if a customer self-declares the same information, it only counts as one piece of information. The only genuinely separate pieces are the billing address and the IP address.

A Spanish citizen resident in Italy on a ferry from Dover to Calais buys an app online. Which country’s VAT rate should you charge?

• Italy

An app is an “over the top” service (ie it can be used anywhere), so VAT is charged according to the customer’s country of residence: Italy. If the customer was buying WiFi, which can only be used on the ferry, then VAT would be charged according to the country of departure: the UK.

When do you have to register for VATMOSS in the UK?

• After your first EU sale

Originally, UK sellers had to be registered for VATMOSS by 1 January. On 10 December 2014, HMRC changed this: you now have to register for VATMOSS by the 10^th of the month following your first EU sale.

If you use a geoblocker based on the IP address to block EU customers, does VATMOSS still apply to you?

• Yes for everyone

A geoblocker based on an IP address is only using one piece of information about the customer’s location. According to the EU regulations, you need two pieces of non-contradictory data to prove your customer’s location and identify where (and whether) VAT is payable.

If you use a third-party platform or plugin to get your VATMOSS data and they get it wrong, who’s liable?

• I am

You’re using the third party to get the data, so you’re responsible for paying the VAT yourself. You’re also liable if they get it wrong. The EU guidelines Article 9.5.9. say, “In many circumstances, taxpayers rely entirely on verifications undertaken by third party trading partners, such as payment service providers and other intermediaries. It is necessary to stress that the correct determination of the place of supply remains with the supplier.”

If you’re in the UK and you sell through a UK third party who takes responsibility for all the VAT, should they charge VAT to UK customers?

• Yes, if they’re above the VAT threshold

The third party is totally responsible for the VAT, so their VAT liability applies, not yours. If they’re above the threshold, they have to charge VAT. This means your UK customers will pay 20% VAT, regardless of your VAT threshold.

Where can you go to get up-to-date EU VAT rates?

• Each country’s own tax office

Until 15 January 2015, the PDF of VAT rates on the European Commission’s site had last been updated on 1 July 2014 and was out of date. It was updated on 15 January, but features a prominent disclaimer that the Commission “cannot be held responsible for its accuracy or completeness”.

VATLive collects info on VAT rates, but it’s not fully accurate. For example, it gives the UK VAT rate for “books” as 0%, but doesn’t clarify that this only refers to physical books, not ebooks. Similarly, its info on Italy says “ebooks” have a 4% rate, but that’s only if they have an ISBN number. (Information checked on 8 Jan 2015, following their update on 5 Jan 2015.)

The only way to get reliable, up-to-date information is directly from each country’s own tax office.

How many VAT rates are there in the EU?

• 81

Many blogs and articles have said that the 28 EU countries have 75 different VAT rates, but there are actually 81. It may be that an early article or post said “over 75 rates” and this was repeated as “75 rates”.

In Finland, how much VAT is due on an eBook on CD?

• 24%

Finland charges the standard VAT rate on ebooks, whether they’re delivered online or on CDs or data sticks. A publisher challenged this, but an EU ruling on 11 September 2014 upheld Finland’s position.