How to avoid VAT in EU from the 1st 2024

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cer955

Mentor Group Light (Private use!)
The vat is due where is the final customer in b to c sales wherever is the company incorporated, double check your sources
As far as I know, this is true for products, not for services. For services, VAT is due in the place where the company is incorporated.
 

lostguy

Mentor Group Gold
consider using a country outside of the EU and for instant don't be in the same country. UK, Romania, Cyprus, Malta and the rest of the Baltics will official require you to charge VAT but if you keep the amount low, you don't need to worry.
 

cer955

Mentor Group Light (Private use!)
consider using a country outside of the EU and for instant don't be in the same country. UK, Romania, Cyprus, Malta and the rest of the Baltics will official require you to charge VAT but if you keep the amount low, you don't need to worry.
Why you say "don't be in the same country"?
Wouldn't that trigger other things about "company substance" and "place of effective management"?
 

delarue

New member
Yes if you charge Pennies you don’t have to worry but as soon as you have a serious business and charging more than 2000 euros per month which is very quickly reached when you have a serious business then from what I saw you need to use a non European payment gateway if you want to keep privacy
 

lostguy

Mentor Group Gold
Yes if you charge Pennies you don’t have to worry but as soon as you have a serious business and charging more than 2000 euros per month which is very quickly reached
LoL that's still penneys. I speak about 10K to 15K per months.. nothing will happen.
 

delarue

New member
the taxman should see a substantial interest to start an investigation with significative amounts, I think as well that up to a certain amount nothing will happen, but at a certain level you will increase the probabilities if you don’t declare any vat with a substantial turnover
 

NicolasMaduro

Entrepreneur
G2A and Kinguin are great examples of billion dollar companies purposely not paying VAT in EU to gain an unfair advantage over EU companies sellinf the same products. Using dark patterns so that the default customers address is “Outside EU 0% VAT”. G2A changed their policy and dont even put VAT on any transaction and say that its their sellers responsibility. G2A even hired a Director of VAT. Perhaps so the owners can cover their own ass and make the “Director of VAT” take the poop when EU starts prosecuting?

I also wonder how Gamivo, incorporated in Malta(EU), dares to use this dark pattern of default 0% vat.(havent checked them lately Maybe they changed practises?)

Just remember VAT fraud is not for fun. Its jail time.

All statetements above is of course allegedly.
 

johndunham

New member
VAT for services is paid in the country of the service provider, so 0% VAT in UAE
Not true. In the EU, VAT is paid where the service is delivered.

See: EUR-Lex - 02006L0112-20190116 - EN - EUR-Lex


"If you receive services for business purposes from a supplier based outside the EU, you should usually pay VAT at the applicable rate in your country, as if you had supplied the service yourself (using the reverse charge procedure)."
 

marzio

Mentor Group Gold
VAT is paid where the service is delivered.

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If you receive services for business purposes from a supplier based outside the EU

We are talking about selling services, not receiving services.
 

NicolasMaduro

Entrepreneur
So what is the conclusion?

Example 1:
CD keys/graphic files/ebooks/hosting/etc sold from United Arab Emirates to private customer in EU
is ALWAYS subject to EU VAT

Place of Supply is Customers EU country
Example 2:
A UAE company selling consultancy services(for example custom graphic design, advisory services and so on) to private individuals based in the EU

Is the place of supply EU(subject to EU VAT) or is the place of supply UAE?

Im reading different things on this lol
 

5K1PP3R

New member
VAT for services is paid in the country of the service provider, so 0% VAT in UAE
it's not correct, if you provide a digital service the address us that of the client. You are supposed to pay VAT, you need to register in EU and pay VAT there, but there are no ways to force you do it. Same as with UK, service provers selling services to EU customers are supposed to register in EU after Brexit. But what can EU do if they don't?
 

Martin Everson

Offshore Retiree
Staff member
Mentor Group Gold
Elite Member
it's not correct, if you provide a digital service the address us that of the client. You are supposed to pay VAT, you need to register in EU and pay VAT there, but there are no ways to force you do it. Same as with UK, service provers selling services to EU customers are supposed to register in EU after Brexit. But what can EU do if they don't?

Correct. I discussed this in another thread. Link below explains it in simple terms for Non-EU businesses selling into EU.

 

NicolasMaduro

Entrepreneur
Correct. I discussed this in another thread. Link below explains it in simple terms for Non-EU businesses selling into EU.

Yes but this is specifically for automated electronic services like hosting, subscriptions, apps, and other automated services with No eller little Human intervention

Did they change the rules in 2021 to also include VAT on consultancy from outside EU to EU?
 

cer955

Mentor Group Light (Private use!)
As far as I understood, a distinction has to be made between
- Digital Services
- Digitally Provided Services

Digital services are services provided by a digital system, such as hosting, subscriptions which are automatically fulfilled, e-commerce of digital products and so on. In this case, VAT is paid in the customer country.
The second options is basically "regular services" or consulting, provided using the digital method as a veichle or a tool - but there's a person behind it, providing the real service. In this case, VAT is paid (or not paid) in the country of the company.

Not sure about the second case, what happens if the company is in a country but the specific person providing the service (an employee of the company) is in another country, which of the two is the right one?
 

marzio

Mentor Group Gold
Yes but this is specifically for automated electronic services like hosting, subscriptions, apps, and other automated services with No eller little Human intervention

Exactly, if there’s a human involved VAT is due in the country where the service is provided.

For automated stuff, VAT is due in the country of the customer.
 
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