"VAT Tax?" Topic

If I were purchase something from Italy, do I have to pay VAT? I reside in North America.

No you don't, although whether you can get a discount equivalent to removing the VAT depends on the seller's policies.

Dom.

Thank you, Dom! I suspected this -- I keep getting companies trying to charge VAT whenever I purchase anything from Europe.

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It seems that every time I ask a question on TMP, you have the answer… in the future, I will just direct all questions directly to you ;-)

Of course you're only paying VAT if the company is VAT registered. If they are not, usually because their turnover doesn't reach the threshold, then they're not charging you VAT in the first place.

Some things, like books in the UK, are VAT free to begin with.

LOL. The VAT thing can be complicated, as speaking from a UK point of view a firm can be in one of 4 different positions:

1. Small firm, not VAT registered, so you can't get the VAT off as it isn't there in the first place.

2. VAT-registered and willing to discount the VAT.

3. VAT-registered and not willing to discount the VAT (might just be greedy, might not get enough overseas orders to be worth the administrative nightmare of claiming it back, might incorporate it into reduced shipping rates, etc….)

4. The odd one; working on a flat-rate VAT scheme. Basically these are where the firm pays the VAT man a fixed percentage of turnover instead of compiling blow-by-blow VAT accounts. This is a big plus for smallish firms, but means that VAT is levied on their entire turnover, including sales to countries outside of the EU….

Dom.

If the company is VAT registered then you should be intitled to the VAT off as you do not have to pay it. If they are not then no VAT is added in the first place, (most small companies are not registered for VAT as they do not turn over enough money,) therefore no VAT reduction! Jo:)

How do I find out if a company is VAT registered? I might start doing some homework before I purchase in the future.

White Ensign Models is a British company that deducts VAT for their overseas customers and I have found the savings significant. Which in turn gives me more buying power to order extra stuff.

I just ordered from Irregular. They charged me the VAT, I live in Michigan…..but Baccus didn't when I ordered from them….

"I just ordered from Irregular. They charged me the VAT, I live in Michigan…..but Baccus didn't when I ordered from them…"

Same with me, but with different companies. I notice that some will charge VAT, while others do not. I reside in North America and was surprised to get a PayPal bill yesterday with a 20% VAT tax added, even though I specifically pointed out before I purchased that the VAT tax should not be added -- this was even acknowledged by the vendor, but they still charged it.

Remember he asked about Italy, not UK.
He shouldnt pay VAT, but rules are different than UK. In Denmark (also EU) there are other VAT laws than Italy.
So dont think the laws are the same.
Mads

I thought the laws were similar (throughout the European Union) but the figures changed

"I don't understand this one. Charging VAT and then pocketing it, I think thats an offense."

Yes and no. Basically, if VAT appears on the invoice and you are in a location that exempts you from it then it shouldn't have been applied and you have a case to complain (at least from the UK).

However, there is nothing to prevent the retailer from charging you the 'standard' price for the goods and invoicing at that price. If there is no VAT entry on the invoice then you haven't been charged for it (and you haven't paid more than the other either) it's just the government won't take it's percentage.

It really is simple chaps.

If a company is VAT registered, the tax MUST be levied on all transactions with EU residents,

It the customer is from outside the EU then the tax is not applicable and should not be applied.

Some companies do complicate this by keeping the VAT element and offering 'free' or 'reduced' postage rates that means the total charged remains about the same.

I prefer to be transparent. There is a fixed overseas postal rate and all goods to non-EC countries go VAT free as they should do.

Cheers

Peter

Transparent is good.

"might not get enough overseas orders to be worth the administrative nightmare of claiming it back"

Yeah, there's a whole other box to fill in on the VAT quarterly return for the amount of stuff you sent to non-EU countries.

You don't even have to remember the pence.

"I don't understand this one. Charging VAT and then pocketing it, I think thats an offense."

Probably.

"How do I find out if a company is VAT registered? I might start doing some homework before I purchase in the future."

They should list a VAT number in their contact details.

"The odd one; working on a flat-rate VAT scheme. "

You're supposed to count your VATABLE turnover and pay a percentage of that. Non-EU sales are non-vatable.

Having said that, the scheme is an utter ing dog and I wouldn't touch it with a bargepole. I particularly didn't like their insistence (when I spoke to them about it a while back) on paying monthly or quarterly equal portions of annualised expected VAT -- meaning that if your sales are seasonally lumpy, you overpay VAT in February and underpay in December. Which is great unless it puts you into negative cashflow for Feb…

You may just include an email or note to the company to the effect of 'I would like to order these products, and if you charge me VAT I will swim over there and beat you with the nearest available bicyclist' if you're worried about it.

Or I could just send an e-mail to the British Tax Department.

HM Revenue and Customs:
hmrc.gov.uk

I don't like 'em bloody pirates.

I sent the company an email explaining, again, that I reside within North America and that VAT tax does not apply to me.

The price of the item is 70 Euros, plus 20 VAT = 90 Euros. They sent me a note explaining it was a mistake and promised to send me another bill for the correct amount: 80 Euros without the VAT tax.

Excuse me?

Was I born yesertday? Is this how business is conducted in Italy? Do they think they can snowball me using difficult math?