Ok folks,
First and foremost, howdy.!! Now, to get to the nitty gritty… i’m in the finializing stages of bring my store live… I have a question that most people cringe on reading, let alone, answering… 
VAT?? From everything i’ve read on these forums, and outside resources, i’m gathering that the VAT is only collected in countries outside of the US?
I live in 1 of the 5 states that doesn’t require sales tax here in the US, New Hampshire… and have concluded that any sales from my store are tax exempt. Am I concluding incorrectly?
So, I guess my question is… do I need VAT for sales inside of the US?? or does this just apply to countries outside of the US?
ANY advise, reading material, or link’s to clarify this topic for this old man would be GREATLY appreciated.
The answer is Nope. VAT is a tax collected from the member states of the Yurapee’n Union. You’re one of the lucky ones as far as tax is concerned. I think the VAT is somewhere around 17%.
you are not responsible for collecting the VAT from your european customers…
(since you are u.s. based)
the customer in any participating eu union country is responsible for voluntarily reporting the tax on purchases made from the us.
/edit/
ok…thats too funny…i answered this about 3 hours ago, and forget to click submit and the ff tab was still open, and MikeK already answered it…
Why is it some companies, DigitalRiver for example, will collect the VAT even though they are not in the EU.
[quote name=‘argentice’]Why is it some companies, DigitalRiver for example, will collect the VAT even though they are not in the EU.[/quote]
Profit, kinda like ebays charging $50 postage and selling at 99c
I dont think so. Collecting tax and not passing it on is fraud. As a consumer I’d have to pay it twice.
[quote name=‘argentice’]I dont think so. Collecting tax and not passing it on is fraud. As a consumer I’d have to pay it twice.[/quote] Otherwise known as profit
You’ll find that I can charge GST (Government sales tax) for overseas residents however it becomes a nitty gritty business.
Digitalriver have a local office maybe?
Seems to how I am one of the lucky ones that lives in a non-taxed state in the US, I wish they would publish a small handbook to all of us residents, so when we run across something like this, we don’t have to bother the good people of the world… and it would make us look les… ummmm… I don’t know what to put in here lol…
SO, I don’t charge VAT at all? as this would fall back on the consumer to report if they were to be purchasing in the UK or elsewhere that would require it?
I just wanted to be clear is all.
Thank You in advance everyone
Komplex
You absolutely, positively, don’t charge VAT. We ship all over the world, and I can tell you with a great deal of certainty that we never collected VAT, and we never had a single compliance issue.
Tax is levied based on where you sell from. Since you are in the USA, you don’t have any obligation to collect tax for Europe. If you lived in a state that did collect sales tax, you would have to register for a Resale Number. That gives you the authority to collect sales taxes and buy items for resale without paying sales tax. The important thing is that you MUST register. If you were responsible for collecting and forwarding VAT, there would be some kind of treaty between the US and EU that would require you to collect VAT.
So don’t worry, the final word on this is that you don’t collect VAT. Nor do you collect sales taxes on any order that ships across state lines.
Thank you for a definitive answer MikeK. I’m hoping it will also help those that might be intimidated by asking questions on the forum.
Again, Thank You MikeK 
Komplex
Glad to help.
I my opinion there is to much confusion regarding this Issue, but its actualy quite simple. I live in an EU country, and we have had news around one year ago regarding this. Dont ask me where in the US you should deliver the tax money that you collect from EU customers, but Im sure some one in th US treasure will know.
This is an old issue, and EU and US have reached an agreement almost 4years ago, so I think you should get proper advice from local treasury offices (well, we have them here, so I presume something similar exisists in other countries). You may endup charged of tax fraud and be forced to pay the VAT you should have colected but you didn’t.
If you are based in US and sell to a EU based business, then you should not charge any VAT (same as between EU countries), however if you sell to endusers, then you have to register yourself in one of the European countries for VAT.
For the time being this situation aplies only to Digital goods (software, music, etc) and services (webdesign, hosting, subscriptions, etc)
In a second stage it will expand to phisical goods as well.
As far as we’ve eard in news the recomendations being made to transport companies are very clear : If there is no invoice with the tax number from the sender…then the goods cannot be delivered. So this may means big trouble for US business sending to europe. I dont know when they will start to enforce this, but they will one of this days.
You have some information here :
[url]http://www.siia.net/global/pubs/VAT-02.pdf[/url]
[url]http://www.eurovat.com/online.htm[/url]
and if you need some PDFs with laws, agreements betwen EU and US regarding this maters you can find them in the EU website (taxation).
Be carefull…wherever you are…governements want your money.
Regards
José
José/Martins (?) Thanks for clearing that up. It explains why Digitalriver collect taxes as they supply downloadable software.
There is some confusion in this thread regarding VAT and the EU coumtries.
If you are in the USA or outside the EU states then if you sell digital downloads or goods you are not required to charge VAT.
If you are based in US and sell to a EU based business, then you should not charge any VAT (same as between EU countries), however if you sell to endusers, then you have to register yourself in one of the European countries for VAT.
Which country would you register too in the above scenario? Ireland with over 20% perhaps the UK with 17.5%. That quote is completely wrong!
Broadly speaking the only case where it will apply is if you had an office in the EU and you where shipping goods from it or you where selling digital products. Then you would register in that country. Of course you would only register if you exceeded the threshold or could exceeed it in that financial year £56,000 ($112,000) in the UK.
Therefore if somebody in the USA was charging VAT to European customers and did not qualify as above, then its is fraud, not hidden profit, collecting another nations taxes and not paying it over.
Degsey