What happens if I buy audio plugins with my VAT ID

[Fornicras]

Hi all,

I have a company with an VAT ID, country is outside the EU.
When buying plugins, some sites ask for the VAT ID and remove the VAT when I enter it.
What's exactly going on here? My company is not in the EU or the US.
Should I buy like this or will I have some trouble doing this?

Edit: I'm buying this with my personal credit card though, not company's.

[roman.i]

Are you buying the plugin for your self or for the company?
It doesn’t matter what you have or not, it is for whom you buy the plugin

[roman.i]

Vat should be paid by the end customer, when you are not entering the vat id you basically pay the vat you doesn’t have to pay. It is your company’s customers who should pay the vat, not you.
So you are just overpay.

[whyterabbyt]

Edit: I'm buying this with my personal credit card though, not company's.

Then techincally you're not entitled to the VAT reduction, it's only applicable to your business purchases.

[whyterabbyt]

It is your company’s customers who should pay the vat, not you.

Not if he's buying personally.

[Fornicras]

It is your company’s customers who should pay the vat, not you.

Not if he's buying personally.

Yes, I'm buying personally, but who's going to check If my company will sell the plugin or not? I mean what's legally binding me there to buy without VAT but use it personally?

[whyterabbyt]

Yes, I'm buying personally, but who's going to check If my company will sell the plugin or not? I mean what's legally binding me there to buy without VAT but use it personally?

Who's going to check? That's the remit of tax regulators in your country.
What's legally binding? Taxation law in your country, obviously. I would generally assume that mostly, taxation law will state that you can only claim business VAT reclamation for legitimate business purchases, and that claiming for anything you think you can get away with may constitute some sort of VAT fraud.

If Joe Random Grasscutting Inc starts using its VAT ID to purchase musical instruments, then you never know, that might get flagged up for investigation by the folk who investigate VAT fraud.

[roman.i]

It is your company’s customers who should pay the vat, not you.

Not if he's buying personally.

Yes, I'm buying personally, but who's going to check If my company will sell the plugin or not? I mean what's legally binding me there to buy without VAT but use it personally?

Tax authorities.

[Fornicras]

It is your company’s customers who should pay the vat, not you.

Not if he's buying personally.

Yes, I'm buying personally, but who's going to check If my company will sell the plugin or not? I mean what's legally binding me there to buy without VAT but use it personally?

Tax authorities.

Yes, the thing is when the company buys something abroad, when I pay for it with company's bank account and they issue my company an invoice, unless I specifically "process" the invoice manually (i.e. send it to my official financial advisor) it is not counted. But in such case, it can be found either way because my company's financial records are being watched every month.

However, if I pay it personally and the plugin seller company issues an invoice even to my company, if I don't process the invoice, no one would know. That's where it confuses me.

However, as what I'm asking is potentially illegal, I don't ask people to give me tips on how to do it and let them be responsible for a crime. I was just wondering, not that I will do it.

If I'd be in the US or in the EU, it would be more clear but I'm not.

Thanks for all the comments.

[fmr]

Hi all,

I have a company with an VAT ID, country is outside the EU.
When buying plugins, some sites ask for the VAT ID and remove the VAT when I enter it.
What's exactly going on here? My company is not in the EU or the US.
Should I buy like this or will I have some trouble doing this?

Edit: I'm buying this with my personal credit card though, not company's.

AFAIK, VAT is only added for customers within the EU. Customers outside the EU don't have to pay VAT. If your company is outside the EU, you cannot use that VAT ID to be exempt of VAT, as the ID is not listed in the VIES: https://europa.eu/youreurope/business/t ... dex_en.htm

[roman.i]

Hi all,

I have a company with an VAT ID, country is outside the EU.
When buying plugins, some sites ask for the VAT ID and remove the VAT when I enter it.
What's exactly going on here? My company is not in the EU or the US.
Should I buy like this or will I have some trouble doing this?

Edit: I'm buying this with my personal credit card though, not company's.

AFAIK, VAT is only added for customers within the EU. Customers outside the EU don't have to pay VAT. If your company is outside the EU, you cannot use that VAT ID to be exempt of VAT, as the ID is not listed in the VIES: https://europa.eu/youreurope/business/t ... dex_en.htm

this is not true, some countries have integrated with vat and companies have vat number they should use, even they are not in eu

[roman.i]

Yes, the thing is when the company buys something abroad, when I pay for it with company's bank account and they issue my company an invoice, unless I specifically "process" the invoice manually (i.e. send it to my official financial advisor) it is not counted. But in such case, it can be found either way because my company's financial records are being watched every month.

However, if I pay it personally and the plugin seller company issues an invoice even to my company, if I don't process the invoice, no one would know. That's where it confuses me.

However, as what I'm asking is potentially illegal, I don't ask people to give me tips on how to do it and let them be responsible for a crime. I was just wondering, not that I will do it.

If I'd be in the US or in the EU, it would be more clear but I'm not.

Thanks for all the comments.

If you don't process this invoice, you loose the option to write it as expense, as a result your company pay more tax. Therefore, no one cares what is written in the invoice, since you don't ask to deduct the expense from your business.
The whole idea of this process you are trying to avoid is to reduce the tax burden on your company.
It is not clear what is your intent.
If you write this purchase on a company, you get a deduction from tax, and you don't pay vat.
If you write this purchase on yourself, you "have" to pay vat according to rules in your country. Usually this is not enforced for electronic commerce, since it is very hard to follow.
What you are doing, writing it on your company but "forgetting" to write it as expense, and loosing your tax deductions, potentially getting into trouble, and gain nothing.
It is much safer to write this on your personal name, since authorities are way more relaxed on individuals, than on companies. You don't pay VAT since you are not EU resident, and not getting into trouble.

[fmr]

Hi all,

I have a company with an VAT ID, country is outside the EU.
When buying plugins, some sites ask for the VAT ID and remove the VAT when I enter it.
What's exactly going on here? My company is not in the EU or the US.
Should I buy like this or will I have some trouble doing this?

Edit: I'm buying this with my personal credit card though, not company's.

AFAIK, VAT is only added for customers within the EU. Customers outside the EU don't have to pay VAT. If your company is outside the EU, you cannot use that VAT ID to be exempt of VAT, as the ID is not listed in the VIES: https://europa.eu/youreurope/business/t ... dex_en.htm

this is not true, some countries have integrated with vat and companies have vat number they should use, even they are not in eu

I stand corrected. Even so, waiving VAT is a process that only works withing EU countries, and is related with the way VAT is implemented in the EU, and tax legislation. Outside of the EU, its dependant on each countrie's legislation. If in doubt, one should consult an accountant, or a tax lawyer.

[whyterabbyt]

Even so, waiving VAT is a process that only works withing EU countries

Incorrect. Waiving VAT 'works' in the UK.

[kritikon]

Shouldn't even need to try and avoid VAT. If outside UK/EU then you most likely aren't subject to it to start with. Most companies I've bought sw from take off VAT from the price once I enter in that I'm outside that jurisdiction. Used to get sw at cost only, but in recent years NZ has now passed tax laws that make you liable to local tax rates, so tax is charged at NZ rates and buying sw/online doesn't escape. I assume it's at 15% GST rate but can't say for sure. The companies themselves charge it on their price and I assume NZ govt collects it somehow, no idea how. There always were some laws for paying tax on items over a certain price but it was patchy and was mostly avoided, but they've now updated so even small items are charged. And they do chase it. Actually the most recent purchases I made, I can't avoid it because it's automatically added at sale. TBH I don't know if all smaller companies comply, but certainly the larger ones do - I've paid local NZ tax on GForce, Steinberg, Korg etc.

I guess you can avoid tax, depends on your own country and how closely they chase it. It might be feasible and worth it for you and it might be you don't even have any laws for it. It may be that you get caught and get clobbered, the risk is down to you and how closely govts chase tax. Usually they really dislike people dodging tax, just sayin'. And using a company to avoid tax while buying for personal use, they really don't like. Although obvs loads of small traders, tradies etc do exactly that. I know of a plumber who bought his boat on his company for "corporate entertaining" purposes and avoided GST. Hope the cnt gets caught TBH, but it's pretty rife here..