digital downloads vs real goods V.A.T

[bambinou]

Hi All,

I really need a little bit of help please,
I am building my first php websites for 2 clients and I am a little confused of how I should program the V.A.T checkout.Both websites will be based in UK
I have always heard that if we sell digital goods(downloads musics or softwares),people outside EU would not pay the V.A.T on the websites and people buying real goods have to pay the V.A.T even outside EU.
Could you please confirm it?

Now someone else also told me that each EU countries has to pay it's own V.A.T.......Is it right?I am so confused.
I have tryed to find some help on digital downloads via the HMRC website but cannot find anything.


Kindest Regards,


Bambam

[fisicx]

Digital goods are treated the same as any other. If the site is selling goods then UK VAT regulations apply. It the buyer is overseas then they need to reclaim the VAT.

[DIY Accounting]

Originally Posted by fisicx

Digital goods are treated the same as any other. If the site is selling goods then UK VAT regulations apply. It the buyer is overseas then they need to reclaim the VAT.

Agree entirely
Goods supplied from UK subject to Vat if registered and no difference between digital or other products.
Overseas buyers deal with reclaiming the UK Vat according to their own country's rules

[bambinou]

Thank you for the replies,

I have to admit, I am lost, my accountant told me I could not charge V.A.T on digital goods to countries outside Europe.
What I do not understand is that most websites have a control panel where you manually need to add which countries are part of the EU, when i buy a product and register under a none EU name the website do not charge the V.A.T..................I better call my accountant now....

Thank you so much for your help,


BamBam

[bambinou]

I contacted my acountant by email yesterday and just noticed I had a reply, let me post it here:

VAT is probably the most complicated of all taxes.

All the UK rules regarding Internet sales and electronic downloads etc are
contained in VAT Public Notice 741 and dealt with within Schedule 5
Services.

Where sales are being made from business to business (EC both registered for
VAT) then the VAT is charged where that business enjoys that service. Where
the customer is an individual (Non registered member of the public) then UK
VAT must be charged.

Sales made outside EC then normal overseas rules apply, i.e. no VAT.

I have attached the HMRC publication. I think you need to refer to section
15.


Regards


<BAMBAM>
If I understand well, no V.A.T should charged to countries outside EC, when the customer is not a Business.....This is what I was asking for my digital Downloads. I hope you are not charging V.A.T to oversea buyers guys!!!!.

[peterjhale]

that's what I understood to be the situation.

Now, sales of software that are delivered on CD - that's different of course.