Important VAT update for November 2015
What's the news?
If you are a resident of any country within the European Union (EU), you are required to pay Value Added Tax (VAT) in accordance with European Union Directive 77/388/EEC. This directive requires that companies located outside of the EU, who provide electronic goods and eServices to private consumers residing in the EU, remit VAT taxes to the EU member states in which the customers are residents. The VAT is calculated at the applicable rate of the country in which the customer is a resident. Only business-to-consumer sales are taxable.
Business-to-business sales may be exempt from the Value Added Tax if the business making the purchase has a current and valid VAT ID number.
DomainGuru is a reseller of services from eNom Inc, a US company and the world's largest domain name wholesaler. All eNom pricing policies are applicable to DomainGuru. eNom has recently started charging VAT on all accounts with an EU billing address and no valid VAT number. An advance notification of this change was sent to all applicable account holders October 3 2015.
How can I avoid being charged VAT?
Do any of the following:
Changes will be effective immediately.
What is VAT?
VAT (Value Added Tax) is a tax on consumer spending within the territory of a European Union (EU) Member State. VAT is not included in prices displayed on DomainGuru's site. When applicable, VAT is charged separately and will be itemized on invoices and billing information. VATs are NOT Refundable.
eNom is a U.S. company. Why is it collecting VAT?
As a non-EU supplier of electronically supplied services (domain registrations, SSL certs, etc.) eNom is required to account for VAT on these services provided to EU non-business customers. They are collecting VAT and will be paying the EU, via Ireland where they are registered, on a quarterly basis. They are required to comply with Council Directive 2006/112/EC on the common system of value added tax.
Who may be charged VAT?
As a non-EU supplier of domain and web hosting services to customers in the European Union (EU), eNom is required to comply with the European VAT (Value Added Tax) regulations and charge VAT to non-business customers located in the EU.
Customers categorized as Business or Charity users in the EU may be required to self-account for VAT. For eNom to determine if you may fall into this category and not charge you VAT, you must supply your VAT number. If you are not familiar with the VAT self-accounting rules in your country, please contact your accountant or professional adviser for more information.
There is no VAT number on the invoice, so you cannot charge the VAT.
The invoice will have eNom's VAT number on it by the end of the month. eNom is still obligated to collect VAT, and business customers are still required to comply with EU VAT requirements for reverse-charge.
eNom isn't required to charge VAT on these supplies as they’re made by eNom, in the US, which is outside the scope of VAT.
This is incorrect. eNom is a registered company for VAT under MOSS in Ireland as a non-EU supplier of electronic services, and have their own VAT Number. Their number is EU372003356. They are collecting VAT for Business to Customer sales only. All customers supplying a valid VAT number will not be charged VAT. Instead they’ll self report under the reverse-charge scheme for EU VAT.