From January 1st, 2015, telecommunications, broadcasting and electronic services are always taxed in the country where the customer belongs* – regardless of whether the customer is a business or consumer – and regardless of whether the supplier is based in the EU or outside.
* For a business (taxable person) = either the country where it is registered or the country where it has fixed premises receiving the service.
* For a consumer (non-taxable person) = the country where they are registered, have their permanent address or usually live.
Below table summarizes how we apply VAT, depending on transaction participants and their location
|Transaction participants||Seller country||Buyer country||VAT||Notes|
Consumer to Consumer
|EU||EU||No VAT mention|
|EU||non-EU||No VAT mention|
|non-EU||EU||No VAT mention|
|non-EU||non-EU||No VAT mention|
Business to Business
|EU (country A)||EU (country B)||No VAT (RC)||customer must account for the tax (reverse-charge mechanism)|
|EU (country A)||EU (country A)||VAT||same country|
|non-EU||EU||No VAT (RC)||customer must account for the tax (reverse-charge mechanism)|
Business to Consumer
VAT Calculation and Vendor Type
Vat calculation depends on the vendor account type, which is either Private or Company:
- Private - VAT is not applicable
- Company - VAT is applied to all prices.
Vendor type is managed in the Vendor Profile section of the NetLicensing Console:
VAT Calculation and Product.
For each product you can choose one of the two Vat Calculation Modes:
Gross: VAT is already included in the specified price*
- Net: VAT is not included in the specified price
* Gross mode is default for all new products and products created prior to introduction of VAT handling.
Vat Calculation Mode is managed via the Product Edit in the NetLicensing Console:
Shop and VAT Calculation Mode
- Gross calculation mode implies that the VAT is already included in the specified price, which is reflected in the NetLicensing Shop as a corresponding note below the shown prices:
And VAT percentage and actual calculated amount shown on the checkout page as well as order confirmation:
- Net calculation mode implies that the VAT is not included in the specified price and must be added on top of it, if necessary. Accordingly, NetLicensing Shop adds a note below the shown prices:
Shopping cart view and confirmation page shows calculated VAT as a separate field:
Changes to the Checkout Flow
Checkout page includes new fields, required for the correct VAT calculation:
- Tax/VAT ID