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EU VAT legislation changes for electronic services

EU VAT legislation changes for electronic services

What’s changing?

From 1 January 2015, new EU legislation is changing the way VAT is charged on electronically supplied services, such as eBay fees. 

If you’re not a business seller, eBay will charge VAT at the rate of the country where you’re based (for example 20% for the UK) rather than the rate of the country where eBay is based (15% for Luxembourg up until 31 December).

How does this affect me?

All business sellers based in the UK will be invoiced excluding VAT (net pricing) from 1 January. For sellers who have already registered a VAT ID with eBay, they will not notice any change. 

eBay business seller fees will be displayed as net prices on the fee pages after 1 January.

What should I do next?

If you haven’t registered a VAT ID with eBay, register your VAT ID now. It’s the best evidence that you’re a business. 

Register your VAT ID now

Not all businesses need to be registered for VAT.  However, if you are not currently VAT registered you should monitor your business turnover. If you have any questions regarding whether you should be registered for VAT we recommend that you discuss this with your accountant or tax advisor.

Find out more about the EU VAT legislation change.

Examples:

Health & Beauty category final value fee on eBay.co.uk:
Before 1 January 2015: 10% (includes 15% Luxembourg VAT)
After 1 January 2015: 8.7% (no VAT)

Subtitle price on eBay.co.uk:
Before 1 January 2015: £1.00 (includes 15% Luxembourg VAT)
After 1 January 2015: £0.87 (no VAT)

Please note, this guide is general in nature and is not intended to provide individual tax advice. Please seek independent advice from your accountant or tax adviser.

FAQs

 

How do I find out if I have a VAT ID registered with eBay?

 

Why is eBay asking me to register a VAT ID, when business sellers based in the UK will be charged net pricing from 1 January 2015 regardless of having one registered?

 

I’m not based in the UK, what will happen to my VAT rate?

 

How will my international selling be affected by these changes?

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