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Vat For Internet Business?
I wonder what the English will cook up net.
The major powers insist that the internet must be free without interference
from Governments and yet they want you to pay VAT for your online business?
This looks like the beginning of the end for all free online businesses.
The Taxes are coming!
Upcoming VAT Registration – Full Overview
In regard to the forthcoming VAT registration of LiquidNet Ltd, we would like to present to your attention detailed information about the new VAT scheme that will become effective from the beginning of March 2008, and about all clauses in our future billing and invoicing policy. Hereby we shall differentiate the cases that will be affected by the VAT integration, and those (that is the bigger part) that will remain unchanged.
From 1 March 2008 LiquidNet is becoming officially VAT registered. We have already prepared the new system updates that will need to be made in terms of billing (pricing, order forms) and invoicing. It is our utmost desire to make the process of VAT integration easily acceptable and uncomplicated for you – our resellers. That is why, in searching for a simple and practical resolution, we did our best to stay close to the old scheme, while introducing only a few system updates for those of you who will fall into the category "VAT applicable" after the registration officially comes into force.
VAT CLASSIFICATION GROUPS
To bring here clarity upon the VAT classification groups, all resellers are to be referred to as Businesses, whilst end-clients (all clients buying at retail price) can be either Businesses or Individuals. Thus:
UK VAT at 17.5% is applicable to: Businesses (no VAT/VAT registered) and Individuals from the United Kingdom; and Individuals from the European Union.
Clients where VAT is applicable but WILL NOT affect the service pricing (i.e. equals to NIL): Businesses from the European Union.
Clients outside the scope of VAT: non-EU clients (Businesses and Individuals).
The reseller commissions will remain unaffected by the new VAT changes. Also no difference will make the country your clients come from, and whether or not your clients are VAT applicable. That is, the amount of your reseller commission will still be calculated as the difference value between the wholesale price and the retail price (without the VAT added):
NET RETAIL – WHOLESALE = COMMISSION
(* where net retail is the retail price without VAT)
For example, if a client of yours buys a service for $100.00 USD retail price ($117.50 total value, if the client is VAT applicable; $60.00 wholesale price), your commission due will be $40.00 USD.
We would like to outline here one specific occasion. If you are an UK reseller/VAT registered (irrespective of whether your clients are VAT applicable or not), UK VAT at 17.5 % will be applicable to your reseller commission from the side of LiquidNet Ltd. Thus, if your reseller commission due is $40.00 USD, LiquidNet Ltd. will pay to you $40.00 USD + $7.00 USD (UK VAT at 17.5%) = $47.00 USD Total Commission Amount.
The major powers insist that the internet must be free without interference
from Governments and yet they want you to pay VAT for your online business?
This looks like the beginning of the end for all free online businesses.
The Taxes are coming!
Upcoming VAT Registration – Full Overview
In regard to the forthcoming VAT registration of LiquidNet Ltd, we would like to present to your attention detailed information about the new VAT scheme that will become effective from the beginning of March 2008, and about all clauses in our future billing and invoicing policy. Hereby we shall differentiate the cases that will be affected by the VAT integration, and those (that is the bigger part) that will remain unchanged.
From 1 March 2008 LiquidNet is becoming officially VAT registered. We have already prepared the new system updates that will need to be made in terms of billing (pricing, order forms) and invoicing. It is our utmost desire to make the process of VAT integration easily acceptable and uncomplicated for you – our resellers. That is why, in searching for a simple and practical resolution, we did our best to stay close to the old scheme, while introducing only a few system updates for those of you who will fall into the category "VAT applicable" after the registration officially comes into force.
VAT CLASSIFICATION GROUPS
To bring here clarity upon the VAT classification groups, all resellers are to be referred to as Businesses, whilst end-clients (all clients buying at retail price) can be either Businesses or Individuals. Thus:
UK VAT at 17.5% is applicable to: Businesses (no VAT/VAT registered) and Individuals from the United Kingdom; and Individuals from the European Union.
Clients where VAT is applicable but WILL NOT affect the service pricing (i.e. equals to NIL): Businesses from the European Union.
Clients outside the scope of VAT: non-EU clients (Businesses and Individuals).
The reseller commissions will remain unaffected by the new VAT changes. Also no difference will make the country your clients come from, and whether or not your clients are VAT applicable. That is, the amount of your reseller commission will still be calculated as the difference value between the wholesale price and the retail price (without the VAT added):
NET RETAIL – WHOLESALE = COMMISSION
(* where net retail is the retail price without VAT)
For example, if a client of yours buys a service for $100.00 USD retail price ($117.50 total value, if the client is VAT applicable; $60.00 wholesale price), your commission due will be $40.00 USD.
We would like to outline here one specific occasion. If you are an UK reseller/VAT registered (irrespective of whether your clients are VAT applicable or not), UK VAT at 17.5 % will be applicable to your reseller commission from the side of LiquidNet Ltd. Thus, if your reseller commission due is $40.00 USD, LiquidNet Ltd. will pay to you $40.00 USD + $7.00 USD (UK VAT at 17.5%) = $47.00 USD Total Commission Amount.