EU VAT Question

[Lovekraft]

Hi, just wondering, as a self employed individual, If I am selling a domain to someone based in another EU country, do I need to charge VAT applicable to the country they are in, even if I am not VAT registered here in the UK?

On gov.uk it says you do if selling digital services (which they claim includes broadcasting, telecommunications services, video on demand, downloadable music, games, apps, software and ebooks). I suppose domains could be broadly filed under digital services (in the view of the tax man on a bad day!).

 

[donton]

Lots more context required.

Few examples:

If you are VAT regd in the UK and they have a valid VAT number from another EU country you can zero rate it.

If you are VAT regd in the UK and they aren’t VAT regd in another EU country you must charge applicable UK VAT, unless you’re over the trading threshold in their locality in which case you must register for and charge the VAT per their laws.

If it’s just a small transaction and neither of you are VAT regd just agree a price and don’t charge VAT, providing the price is under the VAT threshold for their member state.

Probably worth speaking to an accountant about it if you really want clarity and 100% sound advice though.

 

[Lovekraft]

Thanks, I am not VAT registered myself. It looks like I will need to zero rate them then.

 

[davedevelopment]

I've always considered my domains sales outside of the digital services definition because I usually manage and transfer each sale myself.

> This covers e-services which are automatically delivered over the internet, or an electronic network, where there’s minimal or no human intervention.

- https://www.gov.uk/guidance/the-vat...-services-to-private-consumers#define-digital

 

[Lovekraft]

Thanks Dave I think you're correct, and infact as non registered VAT individual it looks like I don't even need to zero rate it, I just don't mention it!

 

[donton]

Thanks, infact as non registered VAT individual it looks like I don't even need to zero rate it, I just don't mention it!

Correct you can only zero rate if you and the buyer are VAT regd. If you’re not, VAT just doesn’t get mentioned.

The registration threshold for most EU countries is around the 35,000 Euro mark, (UK excluded where we have a much higher threshold) so if you’re below that with the sale price, don’t worry about it.

 

[Lovekraft]

Correct you can only zero rate if you and the buyer are VAT regd. If you’re not, VAT just doesn’t get mentioned.

The registration threshold for most EU countries is around the 35,000 Euro mark, (UK excluded where we have a much higher threshold) so if you’re below that with the sale price, don’t worry about it.

Thanks for verifying this. It's a decent sale but not 35,000 good so I'll be ok!

I have made a couple of sales to other EU companies in the past but they were so small it didn't seem too much worth worrying about but this one I felt needed a bit more clarification.

Thanks for your replies.

 

[Admin]

No vat...its not a digital service and you're not registered.

 

[monaghan]

Thanks for verifying this. It's a decent sale but not 35,000 good so I'll be ok!

Just be aware that the VAT threshold is on turnover, not profit so a few good sales a month could put you over the threshold for the year

 

[Nick VL]

No vat...its not a digital service and you're not registered.

Selling domain names isn't a digital service? How should selling and buying domain names be considered in case of VAT?

 

[Admin]

It's an intangible asset not a service.

 

[Admin]

Perhaps I should advise you talk to HMRC but they are not sure normally with regard to domains. IMO its an intangible asset but seek professional advice bla bla