FN-FORUM: VAT on EU electronic services (WAS: 123-Reg Domain Names)

date posted 20th November 2007 22:40

Ben wrote:
> Interesting RE the zero-rated VAT - I'd read that certain electronic
> services within the EU qualify for zero-rated VAT, but no one seems to
take
> advantage of this (e.g., UK Reg).

Dom wrote:
> I *think* you're talking about the fact that if you supply electronic
> services to a VAT registered business in another EU country, then
> you do not charge VAT. But this is not to say that it is zero-rated:
> instead, the VAT is collected in the country of supply (i.e. the
> country of the business you are selling to).


Thanks for the correction Dom. You're saying that in a case such as a UK
company purchasing domain names from Italy, the Italian supplier would
charge no VAT, but the UK buyer must pay 17.5% to HMR&C?

If this is the case, how is the collection enforced?! I wonder how
membership of the flat-rate scheme affects the situation? I realise that
these answers can be looked up in the VAT Guide, but it's not the easiest
reading! :)

Cheers, Ben