VAT on downloaded software

  richardgb 16:57 03 Oct 2003

I recently paid online by credit card for a years update subscription for McAfee anti-virus software, and when I checked the invoice it included VAT at 19%.
When I queried this I was told because the invioce was generated in Netherlands, this was the VAT rate.
Should they charge VAT like this?

  Falkyrn 17:06 03 Oct 2003

Yes, a recent EU ruling has meant a significant change regarding online VAT ... they are also attempting to get non EU suppliers to also charge the tax.

Re the 19% rate ... it would appear they have charged the Netherlands rate rather than UK rate ... I'm not sure that is what they should have done but I could be wrong on that.

  richardgb 17:16 03 Oct 2003

Yes, I accept they have to charge VAT, but why the Nehterlands rate?

  Hunte® 17:29 03 Oct 2003

They charge the VAT at the rate applicable to where they are VAT registered. For McAfee this is in the Netherlands. A company trading in Europe only needs to register in one country for VAT and can charge this rate across the EU.

Other companies like Amazon and eBay have chosen to register elsewhere (can't remember the location but the VAT rate is lower than the UK) so to reduce their VAT burden.

  spuds 20:17 03 Oct 2003

Companies like 101cd changed their way of trading due to the vat regulations. They moved to an 'offshore' location, which helped the consumer originally. But due to the EU,101cd are having to change their trading methods again.They started to offer free delivery, but this as now been discontinued.

  R4 20:32 03 Oct 2003

Norton do not charge Vat on their subsciptions as in the US they only charge 'Tax' to local residants.

McAfee could lose out on this.

  JIM 21:54 03 Oct 2003

post had me looking at my purchase cost for subscription for Nortons Antivirus definitions.

They do charge Tax = GBP at 2.21 on the purchase price of GBP 10.50 That was in July 03.
Caught me out that did.:)

Would that be the Irish connection ? If so will AOL be next ? :(

  SEASHANTY 15:50 04 Oct 2003

I noticed on a U.S.A. software utilities website that on an upgraded version available for download that they were not applying any VAT. As the download is a hefty one and it is the same price as the about to be released commercial CD boxed programme I will not be downloading. Seems to be just Europe at the mo thats charging vat. One eurozone has a 19% rate. Forget which one.

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