Another VAT question

grantw · Jul 12, 2011

Has anyone else run into this situation which I potentially may have shortly:

I'm VAT registered so the sales price includes VAT where applicable. The buyer is in an EU country and is VAT registered, therefore if they supply their VAT number I charge them VAT at 0% which means that the actual sales price should be 20% less than the domain has sold for.

Anyone know how Sedo handles this?

Cheers, Grant

bb99 · Jul 12, 2011

In this case the sale price is the auction close price plus vat at 0%.

So you're doing it wrong by discounting the price.

If the auction closed at £1k, you bill them £1k (including VAT of £0 at 0%). Nailed.

grantw · Jul 12, 2011

bb99 said:
In this case the sale price is the auction close price plus vat at 0%.

So you're doing it wrong by discounting the price.

If the auction closed at £1k, you bill them £1k (including VAT of £0 at 0%). Nailed.

Cheers BB, also had similar advice by PM.

Very confusing though, if this was a private sale the buyer would be getting the domain at the sale price rather than the sale price + 20% vat, so 20% less than a non vat registered buyer. In this case they're paying exactly the same amount as a non vat registered buyer would, seems odd to me.

Grant

bb99 · Jul 12, 2011

It's perhaps less confusing* if you ignore "plus VAT" and think of it as "including VAT". So let's say that the sale price on Sedo includes VAT if applicable.

If the buyer's in the UK then VAT at 20% is applicable, so the sale price includes the VAT at 20% (and so you lose out).

If the buyer is in the EU and has a VAT number then VAT at 0% is applicable so the sale price includes VAT at 0% (and so you don't lose out!).

Clear as mud...

* or maybe not!

grantw · Jul 12, 2011

Yep, clearer

I guess I've been looking at it as reducing the inclusive vat from 20% to 0% and therefore the reduction in cost to the buyer.

I always deal in +vat away from Sedo, much less confusing!

Cheers mate.

Grant