It shouldn’t be news to any domain name holders that live in the Europe but if you do and use a European domain name registrar they are required to collect Value Added Tax (VAT) for each transaction.
The VAT is like a sales tax in the United States but higher than any state’s sales tax.
Up to now Bahamas.bs a domain name registrar originated under the country of the Bahamas was not required to collect or charge any such taxes however now that the registrar has been acquired by CentralNic a company headquartered in London, customers of Internet.bs that are located in Europe have started to get notices that Internet.bs will start charging (collecting) VAT taxes from European customers.
One domainer reported in a comment on thedomains.com:
“and now they are sending notices to EU customers with a 4 days advance, stating that they will be asking a VAT.”
The VAT is a pass through tax, its not something that is going to go to Central Nic but for customers in Europe it is an additional cost.
VAT in Europe is a sales/services tax for the state, that can be as high as 25% in some cases. We should consider ourselves lucky in the US, even with state taxes!
And of course at least for now domain registrations/renewals in the US are not even subject to sales tax so we are double lucky
in fact other registrars don’t ask for a VAT. all have been breaching “da law” for years. Even GoDaddy that has EU based branch doesn’t ask for VAT in domain registrations or renewals (but does so on auctions!).
Name doesn’t ask for VAT. Enom doesn’t ask for VAT. NameCheap doesn’t ask for VAT. The list goes on.
Yes, sure, there is a tax to be paid but this is EU. it’s a mess! it has been a mess for years and it will be a mess for years to come. The funny thing is you only need to put fake information on your address and no one will ask any tax on you. So, if you play by the book you will also be in disadvantage in a world competition that is this business, against guys that, for instance, use fake information in their WHOIS to avoid paying for whois privacy.
On top of that you have a registrar that now, after being sold to another one, realizes that it needs to change rules ans alerts its costumers with a 4 days notice. For me it’s bye bye Internetbs. There are lot of alternatives in the market.
jose – You are incorrect. None of these registrars are based in Europe, and by that I mean HQ’ed as corporations. On the contrary, all registrars that provide ccTLD/TLD/gTLD services and are European corporations ask for VAT; the exclusion occurs ONLY for non-European customers.
Jose
all the companies you mention enom, godaddy, namecheap are headquartered in the US.
There would be no reason they would charge VAT
Except for European laws requiring foreign entities to charge VAT for customers residing within the EU.
As I said many many many times, USA is the best country to live. The quality of life is the best in the world.
Don’t believe me, just spend sometimes outside of USA and then you will appreciate what we have here in good old USA.
If you don’t like the taxes here, then go work outside of US and you will find out how high the taxes are in other countries and the taxes they collect goes to the F corrupted officials.
God bless AMerica!!
In order to make a good living in US, I always tell the immigrants, learn a skill and learn how to BS like the white folks. They always take the credit for the work done by the immigrants
Not all people from the EU will have to pay the VAT tax. It is not that simple.
And EU is not the whole Europe.
It does not matter at all where the company is based, once a company, anywhere in the world, surpasses sales of 100.000 Euro in turnover to a particular country within the european union they must charge the VAT to the customer and pay it. Off course it can take a long time until anyone notices.
About the general tax handling of states, well the US does not have much VAT, but if you are selling as a european to a us company and you are not registered with the IRS (as a european individual or company) you are subject to a 30% withholding tax, so I am not sure on which side you are better of.
Uniregistry is a North American centric registrar with physical staff, infrastructure, offices, and management located in Grand Cayman, using transactional servers located in Bermuda and Ireland. We do not charge VAT to European customers who do their domain shopping, overseas with us.
Very impatient you accept Paypal.
VAT in Europe is a pass-through tax. It is collected on behalf of the local government. If a company is eligible to be charged VAT it will also be able to register with the tax authorities to be eligible to reclaim the difference between the VAT that it charges it’s own customers and the VAT it has been charged on purchases including domains, computers, office rent etc. If a company is not registered for VAT and suffers high VAT costs it makes sense to register and reclaim. There a statutory threshold in most countries for turnover above which a company is required to register for VAT. Essentially VAT should not penalise companies and is not as simple as a “sales tax” despite it being applied to sales.
granted that Name and NameCheap and other major registrars are not based in EU.
GoDaddy asks for VAT for EU entities in auctions. it does not ask for domain renewals or registrations. The business of auction is different of the business of registrar. Are godaddy auctions and godaddy registrar different entities and based on different regions (US and EU)?
InternetBs will change its location in 4 days? By being sold will it disappear almost immediately as an autonomous and legal operating entity?
is Joker.com located in EU? I used Joker and was never asked for VAT (only for Switzerland there’s a VAT).
update from InternetBS:
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Important clarification about VAT
Following our previous notification about VAT assessment, we have noticed that some customers did not realize that the purchase billing information that we requested to check and update, if needed, is not necessarily the same as the Registrant or Whois billing contact of your domain/s.
As a matter of fact your billing address to purchase domains from us can be totally distinct from the Registrant and whois details of yours domains.
In other words, you can perfectly be located in the USA, or in any other country in the world, be fully exempted from VAT and still register domains for your customers with Registrant/s and whois details in EUROPE if so you require.
Please feel free to contact us for further details, we are here to assist you and make sure that your domain name registration experience with us is convenient, efficient, secure and the best value around.
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so business as usual. just use a fake billing address…