Thank you very much for such a comprehensive response. That's all true -
our payment provider is obliged to charge VAT/GST from the end user and
since the tax rate differs depending on the country, the total amount is
only visible during checkout.
On Thursday, May 17, 2018 at 8:47:27 AM UTC+3, Jan Thomä wrote:
> Guys, it's really very simple. MLO has contracted a payment provider which
> handles all their payment for them (Digital River, IIRC). The payment
> provider takes care of collecting and paying sales tax for MLO. If you sell
> to a EU citizen you need to collect VAT/GST according to the country where
> that citizen lives in (e.g. in Germany it's 19%, in Denmark it's 25%,
> etc.). So the payment provider is a registered EU business and as such
> collects the tax and pays it to the country where the EU citizen is living.
> I would assume that this works in a similar fashion for non-EU countries
> like India. This is how things are usually handled with end customers. If
> you sell to a business, you can apply the reverse charge procedure where
> you issue an invoice without VAT/GST and you need to collect the Tax-ID of
> the business you are selling to. Then you print "reverse charge" on the
> invoice and that business (as identified by the Tax-ID) is responsible
> itself for paying the VAT/GST to the country they are registered in. In
> many countries businesses themselves can deduct this VAT/GST from their own
> tax so they effectively don't have to pay VAT/GST.
> So if you're a business enter your Tax-ID in the Digital River form (they
> ask for this IIRC) and you will pay no VAT/GST and then handle the taxation
> side on your end in your country. If you're not a business you will have to
> pay VAT/GST everything else would very likely be tax evasion which can get
> you in various amounts of trouble depending on the country you live in.
> I agree that it's unfortunate that the price listed on their home page is
> without tax, but since the effective price depends on the country you live
> in and your status as being or not being a business (plus any country
> specific taxation rules) they cannot reasonably print a final price to you
> until you are into the ordering process and they have all the information
> they need to come up with the effective price. This is just a side product
> of how taxation works and IMHO not a bait & switch tactic.
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