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Why is Dropbox charging Irish VAT to UK customers?
The UK left the EU to all intents and purposes on 1 January 2021. Businesses providing digital services to Britain from outside Britain are obliged to register for British VAT from that date and ...
Mark
Super User II
Super User IIPart of this is a large VAT issue that the whole EU put in (the UK did it before the EU). Part of this legislation was to start charging VAT dependent upon where you buy - so things like Alibaba now do the same when you buy.
See https://www.citizensinformation.ie/en/money_and_tax/tax/duties_and_vat/value_added_tax.html. for some more info.
Dropbox is providing digital services. The rules are simple both in the EU and in the UK. If you supply from outside the country to another country, and you are within the rules for VAT registration (threshold limits apply), then you should be charging the VAT rate and account for it within the country receiving the digital services. Irish VAT should not be charged. British VAT should (providing that Dropbox have hit the registration threshold and have therefore registered for British VAT).
Dropbox don't seem to be doing this. Why?
Was there ever an answer to this question - did it ever get resolved?
I notice they are still charging VAT on exported services to the UK
Or is it because the service is deemed to take place in Ireland ?
- Mark
tmax100 wrote:
Or is it because the service is deemed to take place in Ireland ?
Pretty much yes 🙂
I'm charged VAT now for most services and products I buy online regardless of where they are based. VAT laws have started catching up with e-commerce.
Hi Mark thanks for reply
When you say e-commerce is catching up, do you mean we are right that EU VAT should not be charged on services to end users outside the EU
I run a business where we export and import goods - Before Brexit my French End Users would pay UK VAT on our products, but French BUSINESSES would give me their French VAT Number which allowed us to Zero VAT (Intra EU VAT Rate 0%) - They would of course charge French VAT to their end users.
Since Brexit their is no VAT on any of our exports - The 'Z' Zero Rate is applied
I suspect Dropbox are collecting VAT from us, then their internal accounting system is applying Zero export VAT therefore not handing it over to the Irish VAT authorities - I could be wrong of course 🙂
I 'X'ed (Twittered) Dropbox yesterday, and they referred me to the email chain - I'll post back here if I get anywhere - Probably won't
