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Forum Discussion
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 their invoices should show a British VAT number: "If you’re selling digital services from the EU to the UK you will need to register and account for VAT." from paragraph 2.5 on https://www.gov.uk/government/publications/accounting-for-vat-on-goods-moving-between-great-britain-and-northern-ireland-from-1-january-2021/accounting-for-vat-on-services-between-the-uk-and-eu-member-states-from-1-january-2021
A search shows that Irish VAT is not applicable to supplies such as these outside the EU, because the place of supply is considered to be where the service is used (not supplied). British VAT is probably applicable, in which cases a British VAT number should be quoted on Dropbox invoices.
Dropbox should supply a VAT invoice with a British VAT number on it. The Irish VAT invoice is incorrect. This would mean that the VAT is payable to the British government (and reclaimable if the customer is VAT registered in Britain).
Please can anyone explain why Dropbox invoices charge Irish VAT?
Many thanks.
17 Replies
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What a master lesson in obfuscation and avoidance their response is!
I think the matter shoulkd be taken up with HMRC in the UK. Dropbox appear not to be properly accounting for VAT on their services provided in the UK (unless, their sales turnover falls short of the VAT threshold). The Irish authorities probably couldn't give two hoots as, presuming Dropbox account to them for the VAT they have collected, they are making money when the nature of the export says they shouldn't be.
Richard was this resolved? I am a UK customer that has been charged IE VAT ($33.17) on my invoice and don't understand why or how an Irish company can charge this to a UK customer?
It wasn't resolved, regrettably... I have spoken to a number of their customers who've switched to other synchronisation service providers because of this issue.
Thanks Richard,
I am a professional VAT registered online seller and can't charge VAT selling to Europe since Brexit and so don't see how Dropbox IE can charge UK customers VAT without a UK VAT number, seems wrong.Definitely wrong according to both the government of the UK and of Eire. It's on their respective websites.
I have also similar doubt. Thanks for the clarification! I wasn’t aware of the distinction regarding VAT charges based on the location of the supply, not where the company is based. It helps me to clear things up regarding Dropbox and other companies charging VAT. I’ll make sure to check if the VAT number is correct on future invoices.......
