Vat Question

[Butoxy 30]

Regarding VAT.

 

As I understand it, if you don't live in the country charging it you don't have to pay it for the product delivered, correct?

 

Payment services such as Pay Pal collect personal information such as your address and bank account or credit card to validate your account.

 

Does Pay Pal not allow the client (Wurm) to request various levels of information such as country of origin for payment?

 

Wouldn't this work for the VAT Tax Man to prove we don't live there?

 

Wouldn't it be as simple as providing our Wurm account number and country of origin to the accountant to file as proof?

 

I don't understand the problem with proving I don't live in a VAT country.  Can anyone explain why or if it is any more complicated than I point out above?

[Aetherwalker 1,863]

This is the first price hike in Wurm for YEARS, dunno why it's such a big deal, works out to 3e more per month, just skip a few cups of coffee and you'll be fine financially

[Wulfgar 1,165]

What Aetherwalker said.

It is not so much about proving which country you come from, its more about the extra costs linked to storing personal data about customers. Sweden has very strict laws regarding that. As it is right now CodeClub does not store any personal info about customers.

[Butoxy 30]

What Aetherwalker said.

It is not so much about proving which country you come from, its more about the extra costs linked to storing personal data about customers. Sweden has very strict laws regarding that. As it is right now CodeClub does not store any personal info about customers.

 

ok, this is the kind of information I was looking for.  I appreciate a factual answer.

 

Although my initial reaction would be: too bad you want to do international business you need to step up and deal with it, either in house or third party, but not knowing the extent of Swedish law in that regard I will simple shake my head and move on.

 

Aetherwalker - No where in my post did I mention or complain about the price increase, I was asking a question, attempting to improve my knowledge, about a foreign tax being placed upon me.  If I was complaining about the price increase I would have put it in one of the other threads still going on about it.  But thank you for the analysis and sound financial advice anyway.  

[Aeris 3,829]

Apart from the laws about collecting personal information there are more reasons why prices won't be different for different people:
1.) PayPal doesn't control the address you jot down, it only checks your access to an account, and every other mean of verifying nationality is expensive

2.) Sweden (like most of the world) has been through a general price hike in everything due to the worldwide financial crisis

3.) It's the first price hike ever for Wurm, meaning it probably should've been raised years ago

4.) Wurm offers more now with all the post 1.0 items and textures

5.) Lots of players don't want to share their personal information to be able to enjoy their hobby, the less is stored the better

 

It's not entirely connected to your original question, it's more of an explanation to why there wouldn't have been ways around it regardless

[Hussars 511]

Since you are asking specifically about VAT and not talking about the price increase:

 

http://www.hmrc.gov.uk/vat/managing/charging/charging.htm

 

Outlines the UK's VAT policies on what and when VAT should be charged.

 

As to the overhead concerns for VAT calculations and reporting, as well as legal concerns for processing.  Use of third party processors USUALLY removes the burden of legal compliance from the vendor as long as the vendor does not personally store the processing related information (Name, billing address, CC info, etc...)  However, as with all things legal, talk to a local Tax Attorney or Legal Consultant for your specific region and business requirements.

 

PayPal allows for profile settings for business accounts/sellers to set VAT/Tax rates on specific items or as a global profile setting.  Doing it on an item by item basis requires a small bit of code (sample from PayPal available here) which overwrites the profile's global tax settings.

 

Now for the fun part...

 

My understanding of the changes to Rolf's local VAT regulations are that as a digital service, it was previously allowed to be assumed the VAT was calculated based on the Purchaser's local.  So Everyone was given the non-EU pricing unless your purchase service provider (PayPal) hit you with VAT.  The changes which went into effect this year now make the assumption that the transaction is calculated of the SELLER's local, meaning everyone has to pay VAT upfront, and claim it as a return/exemption with Rolf's government revenue office.

 

The issue with this is two fold, one, since Rolf includes VAT in the general price, he should be issuing a receipt which totals the VAT you have paid OR he should be showing a base price with VAT value added.

 

The second is that as the seller of an online/digital good, the local revenue board will point you back to Rolf/CodeClub for a disclosure on the VAT collected before they lift a finger.

 

Finally, to my knowledge, most of, if not all of, the "overhead" folks are saying is too much work could be removed from Rolf/CodeClub as long as he clearly called out the VAT fee in the billing.  People could then do the calculations themselves (or your Tax agent), fill out the claims form and submit with proof of purchase for a VAT refund.

 

Again though, I'm not a Tax Lawyer, Accountant or other finance consultant/professional, this is just my understanding based on talking to people in those roles and personal experience in business.

 

::edited for typos/spelling and minor corrections::

Edited June 4, 2013 by Hussars

[Hussars 511]

Or if you really want to learn more..

 

Directly from the Tax Bureau (English version)

http://www.skatteverket.se/otherlanguages/inenglish.4.3a2a542410ab40a421c80006827.html