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EU VAT Rules applicable since 2015

General Info

From January 1st, 2015, telecommunications, broadcasting and electronic services are** always taxed in the country where the customer belongs*** – regardless of whether the customer is a business or consumer – and regardless of whether the supplier is based in the EU or outside.

* For a business (taxable person) = either the country where it is registered or the country where it has fixed premises receiving the service.

* For a consumer (non-taxable person) = the country where they are registered, have their permanent address or usually live.

More details

Implementation details

VAT Applicability

Below table summarizes how we apply VAT, depending on transaction participants and their location

Transaction participants Seller country Buyer country VAT Notes
C2C
Consumer to Consumer		 EU EU No VAT mention
EU non-EU No VAT mention
non-EU EU No VAT mention
non-EU non-EU No VAT mention
B2B
Business to Business		 EU (country A) EU (country B) No VAT (RC) Customer must account for the tax (reverse-charge mechanism)
EU (country A) EU (country A) VAT Same country
EU non-EU No VAT
non-EU EU No VAT (RC) Customer must account for the tax (reverse-charge mechanism)
non-EU non-EU No VAT
B2C
Business to Consumer		 EU EU VAT
EU non-EU No VAT
non-EU EU VAT
non-EU non-EU No VAT

VAT Calculation and Vendor Type

Vat calculation depends on the vendor account type, which is either Private or Company:

  • Private - VAT is not applicable
  • Company - VAT is applied to all prices.

Vendor type is managed in the Vendor Profile section of the NetLicensing Console:

Management Console Vendor Profile with the vendor type (Private or Company) and Tax/VAT ID fields

VAT Calculation and Product

For each product you can choose one of the two Vat Calculation Modes:

  1. Gross: VAT is already included in the specified price*

  2. Net: VAT is not included in the specified price

* Gross mode is default for all new products and products created prior to introduction of VAT handling.

(warning)* Vat Calculation Mode options may not be available in your pricing plan!*

Vat Calculation Mode is managed via the Product Edit in the NetLicensing Console:

Management Console product settings with the VAT Calculation Mode option: Gross (VAT included in prices) or Net (VAT not included)

Shop and VAT Calculation Mode

  1. Gross calculation mode implies that the VAT is already included in the specified price, which is reflected in the NetLicensing Shop as a corresponding note below the shown prices:

    Shop product page listing 20, 10 and 5 unit Pay-per-Use packages with prices including sales tax/VAT

    And VAT percentage and actual calculated amount shown on the checkout page as well as order confirmation:

    Shop shopping cart with three Pay-per-Use packages priced including 19% VAT, a EUR 9.00 discount and a checkout form with Germany selected Order confirmation for a gross-priced order: items include VAT and the 19% VAT portion (EUR 9.31) is shown below the grand total of EUR 49.00

  2. Net calculation mode implies that the VAT is not included in the specified price and must be added on top of it, if necessary. Accordingly, NetLicensing Shop adds a note below the shown prices:

    Shop product page listing 20, 10 and 5 unit Pay-per-Use packages with prices excluding sales tax/VAT

    Shopping cart view and confirmation page shows calculated VAT as a separate field:

    Shop shopping cart with prices excluding VAT; 19% sales tax/VAT of EUR 9.31 is added as a separate line to a grand total of EUR 58.31 Order confirmation for a net-priced order, showing items excluding VAT, subtotal, discount, 19% VAT and grand total

Changes to the Checkout Flow

Checkout page includes new fields, required for the correct VAT calculation:

  • Country
  • Company
  • Tax/VAT ID

Checkout contact information reduced to the fields relevant for VAT calculation: Country, Company and Tax/VAT ID

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