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Buying other services online, when the seller is established inside the EU

Buying other services online if the vendor is established outside the EU

 

 Buying other services online, when the seller is established inside the EU

When buying other services online, VAT is due.

If the seller is established in the European Union, he will charge the VAT rate applicable in his Member State of establishment.

Example: A company based in Lisbon provides consultancy services to a private individual living in Copenhagen. The place of supply is Portugal. The Portuguese company must charge its Danish customer Portuguese VAT.

However, there are exceptions to the general rule:

  • Services provided by an intermediary are taxed at the location where the main transaction, in which the intermediary intervenes, is taxable.
Example: The private owner of a summer cottage in France wants to move some furniture to her home in Sweden and asks an intermediary to find a company that will take care of the removal. No matter where the intermediary is established, French VAT will be due on the intermediary’s commission fee because the main supply, which is an intra-Community transport of goods, takes place at the point of departure.
  • Services connected with immovable property are taxed where the immovable property is located.
Example: An architect based in France is hired to design a summer house in Spain. The architect’s fee will be subject to Spanish VAT.

Example: A hotel in Nicosia will charge its guests VAT according to the rate applicable in Cyprus, regardless of the purpose of their stay.
  • Services consisting of valuations of or works on movable tangible property are taxed at the place where the services are physically delivered.
Example: An Italian artist repairs fire damage to a painting located in the UK and owned by an Estonian private individual. The artist must charge the owner UK VAT. If the painting had been shipped to Italy for the restorer to work on it in her own studio, she would have had to charge Italian VAT.

Example: A person residing in London asks valuers to go to Ireland to appraise the value of his private assets there. The valuers must charge their customer Irish VAT.
  • Passenger transport is taxed according to the distances covered.
Example: The price of a bus ticket for a journey from Poland to France via Germany will include Polish, German and French VAT, in proportion to the distance covered in each country. If the bus also travels via Switzerland, there will be no EU VAT on that part of the journey, since Switzerland is not a member of the EU.
  • Intra-Community transport of goods (goods departing from one Member State and arriving in another) is taxed at the place of departure.
Example: Goods are transported from Germany to France for a private customer. German VAT must be charged on the transport irrespective of where the company carrying out the transport is established.
  • Transport of goods, other than intra-Community transport, is taxed where the transport takes place, in proportion to the distances covered.
Example: A private individual has his goods transported from Paris to Marseille by a Spanish removal firm. The Spanish firm must charge the customer French VAT. The same rule will apply wherever the removers are established.
  • Ancillary services to the transport of goods, such as the loading and unloading services, are taxed in the Member State where those services are physically carried out.
Example: A Danish company unloads a truck in Rotterdam for a private individual. The supplier will need to charge Dutch VAT.
  • Services relating to cultural, artistic, sports, scientific, educational, entertainment and similar activities will be taxed at the place where those activities actually take place.
Example: A Maltese football fan comes to England to watch a football match in Liverpool. The price of the ticket for the match will include UK VAT.

Example: A student from Antwerp attends a management course in the Hague. The course fee will include Dutch VAT.
  • Restaurant and catering services (other than those supplied on board ships, aircraft or trains during the section of a passenger transport within the EU) are taxed at the place where the services are physically carried out.
Example: A company established in Luxembourg caters for an event in Florence, arranging for food and drinks, which it prepares and serves to the guests. The company must charge Italian VAT. This will be the case wherever the caterer is established.
  • Restaurant and catering services supplied on board of ships, aircraft or trains during a journey or part of a journey within the EU, tax is paid at the place of departure of the transport.
Example: A meal served in a restaurant on board a ferry sailing from Hull to Rotterdam (or any EU port) is subject to UK VAT.
  • Short-term hiring of means of transport is taxed at the place where the means of transport is actually put at the disposal of the customer. Short term covers the continuous possession or use of a means of transport throughout a period of not more than 30 days or, in the case of vessels, not more than 90 days.

However, national regulation may shift the place of taxation in this case.

You should check with your national tax administration (national links/websites), which has the competence in this matter.

 

Example: A Belgian, on holiday, in the Baltic countries arrives at Riga airport and picks up a car hired for two weeks. The hire charge will include Latvian VAT.

Example: A boat is chartered in Sardinia for a two-month cruise. The charter will be subject to Italian VAT regardless of who is hiring the boat and where it goes.
  • Long-term hiring of means of transport will be taxed at the place where the private customer is established, has his permanent address or usually resides.

However, where a pleasure boat supplied for long-term hire is put at the disposal of the customer in the place where the supplier is established, the place of supply is where the boat is actually put at the customer’s disposal.

Example: A private person living in Vienna hires a rental car for six months. The hire charge must be subject to Austrian VAT, no matter where in the EU the hiring may take place.

Example: A German resident hires a yacht for use all year round from a Swedish boat supplier. German VAT is due on this supply, unless the Swedish boat supplier makes the yacht available from its place of business in Sweden, in which case Swedish VAT is payable.

 

 

 Buying other services online if the vendor is established outside the EU

When buying other services online from a vendor not established in the European Union, you may have to pay VAT.

Telecom and broadcasting services will be subject to VAT at the rate of the Member State where the service is effectively used and enjoyed.

Example: A French private customer of a Swiss telecoms operator using his mobile phone in France will be charged French VAT. When using his mobile phone during his holidays in Greece, he will be charged Greek VAT on the calls made from Greece.

Example: A private individual living in Barcelona pays a US company for access to American TV channels. The US company must charge Spanish VAT on the broadcasting services received.

Other services may be taxed in the country where they are used, depending on the national regulation.

You should check with your national tax administration (national links/websites), which has the competence in this matter.