Not sure if this is the correct forum.I was just wondering if many/any people in Europe, when thinking of buying a payware product that is downloadable, actively seek out a US site to get it from rather than a European site in order to save paying VAT?

Yes, but only after looking very closely at exchange rates and credit card charges!Allcott

>actively seek out a US site to get it from rather than a>European site in order to save paying VAT?Surprising though it may seem, there is some sort of international trade/customs/taxation agreement in place that results in US sites also charging VAT to European customers. I can't recall the exact details, but there was discussion on this in the newsgroups some months ago. Don't ask me how it works :)Bryn

Usually the site states clearly what the final price will be before paying. I usually try to avoid paying VAT if possible. The products are usually created in the US - why should I pay VAT to some goverment in EU ?

As far as I am aware, the current rules on EU VAT are thus:If you live in Europe and order from a European based payware organisation, you have to pay VAT and the business is compelled to charge you VAT. You cannot escape this and nor can the seller. If the seller's e-commerce agent discovers that you have declared your address as outside Europe but you are in fact living in Europe, your transaction can be (and often is) voided and future attempts to purchase through the same e-commerce route is often barred.If you are a seller in Europe but you sell to a person not in the EU there is no obligation whatsoever for you to charge VAT and in fact doing so (as far as I am aware) is probably at best a rip off and at worst illegal and fraudulent. Your threshold turnover for charging VAT takes account of not your total turnover but your European turnover. If a seller's European Sales do not meet the threshold there is no obligation to register for VAT, although the e-commerce agent is STILL obliged to charge VAT on internet goods since their own threshold has normally been exceeded. In this case the actual vendor cannot claim the VAT back (and we don't).European sellers who do charge VAT to non-European customers are in effect charging an un-necessary and exploitative charge. Even the UK VAT officials have been confused on this point, which I discovered when we had what we thought was a friendly conversation with them and they rather agressively told us we must charge a blanket VAT. In fact they were wrong and we stood our ground. However this did not help us avoid charging European customers VAT since our e-commerce agent, Swreg, has (obviously) a high turnover overall and therefore impose a VAT charge on our downloads whether we like it or not. However Swreg do NOT charge VAT to non-European customers. I am aware that some European addon vendors DO charge VAT to US customers, but I do not believe they should and I suspect such charges are without any justification, since those VAT funds are probably retained by them and not handed on to their local VAT office. It is therefore a possible fraudulent charge which exploits the customers ignorance of VAT rules.European VAT officials have attempted to force or cajole some US departments to agree to a VAT-related charge on sales to European customers, but unless there is new information which I haven't caught up with, the Americans are (quite rightly) telling the VAT officials to get lost!In conclusion, unless a vendor is deliberately charging non European customers VAT when they don't have to, the vendor gains absolutely nothing from VAT since it all goes into the treasury of the host nation and the vendor cannot (should not) be blamed for being forced to make this charge. Indeed VAT is basically a tax whose implementation is not dissimilar to a protection racket! You exist therefore you pay. Evading VAT in the UK in particular is a serious and imprisonable offence and VAT officials have enormous powers, principally to enter your premises without notice and search your computer and paperwork without a warrant, which is MORE than a policeman is allowed to do!As you can imagine, we have a very dim view of VAT and our European Customers in effect pay more, much more than US customers. Add to this the extremely poor value of the US dollar.....well, don't get me started on that one!Kind Regards,Rob Young www.realairsimulations.com

Hi Rob,"European VAT officials have attempted to force or cajole some US departments to agree to a VAT-related charge on sales to European customers, but unless there is new information which I haven't caught up with, the Americans are (quite rightly) telling the VAT officials to get lost!"Being that the American government is what it is, I won't be surprised to see this change... as soon as your VAT folks decide to share the spoils!Cheers,Greg

"If you are a seller in Europe but you sell to a person not in the EU there is no obligation whatsoever for you to charge VAT and in fact doing so (as far as I am aware) is probably at best a rip off and at worst illegal and fraudulent."I remember now that there was a debate about this on the Lago forums not long ago, because Lago requires US customers to pay VAT..."our European Customers in effect pay more, much more than US customers."We pay 17% more. On the other hand the value of the US$ has dropped over 25% recently so that evens it out :)

Hi Jimmi,"We pay 17% more. On the other hand the value of the US$ has dropped over 25% recently so that evens it out :)"The massive drop in the US dollar actually adds another advantage to US customers, in that European designed or sourced addons are not officially subject to VAT, PLUS the US customer pays another 25% less than EURO customers. Depending on how you look at it, US buyers of European software are getting the bargain of the century compared to Euro customers, assuming the vendor doesn't raise his price to compensate for the extremely bad exchange rate.This partly explains why not just flight sim addons, but almost all technology goods, are ludicrously more expensive in EU countries, but of course if you live in the US you will have come to expect incredibly cheap goods to be the norm. 25 Dollars converted to English pounds is just about enough to buy a cheap meal and glass of Beer in the UK. I imagine this buys even less in Sweden. Our American friends have never had it so good...if only they realised it!Cheers,Rob Young

European law demands companies outside the EU that do business with EU citizens charge European VAT and pay that to the EU country of residence of that EU citizen.This was officially introduced to level the playing field between EU and US companies doing electronic delivery of goods. The real reason is to make it more expensive for non-EU companies to do business with EU citizens (thus hoping to get non-EU companies to reject EU citizens, thus forcing Europeans to buy European goods only).For example:A US company sells to a German person, they have to pay German MWSt (VAT) to the German authorities over the transaction.That same company selling to a Dutch person has to pay Dutch BTW (VAT) to the Dutch authorities over that transaction.Not only does this cause massive administrative overhead to the company, it's also highly confusing because of all the different tax percentages in the EU.EU companies are excempt from this, being required to pay tax only in their own countries.So if the selling company is German they have to pay German tax whether the buyer is Dutch, German or American.If the buyer is from outside the EU, the buyer can apply to the country of residence of the company for a tax refund (not quite sure if that's possible for mail order as well, the forms are available at border crossing stations :) ).

"25 Dollars converted to English pounds is just about enough to buy a cheap meal and glass of Beer in the UK."25 dollars here (CA) buys a cheap meal... without the beer.Greg

But if we in Europe go the other way, and purchase from the US, are we exempt from whatever State Taxes may be applied to US customers?Converting from UK Pounds Sterling to the US Dollar right now is extremely good....$40 is the equivalent of aprox

"25 dollars here (CA) buys a cheap meal... without the beer."And the way things are going, pretty soon it will get you the beer... without the cheap meal LOL.David

"But if we in Europe go the other way, and purchase from the US, are we exempt from whatever State Taxes may be applied to US customers?"You should be.In the U.S. we have State sales taxes. I.E. we pay a sales tax if we buy online from a vendor in the state we live in. But not if we buy from a vendor in another state. Lot's of folks utilize this tactic when buying expensive items online... saves them sales tax.For you, living outside the U.S. completely, to pay a tax to a U.S. seller would be a violation of the law (here). Of course, being a non-citizen here, good luck trying to get the U.S. government to act on your behalf. Best thing to do if you buy from a U.S. vendor and you see that they are adding tax to the total price is to cancel the transaction. They are only trying to steal from you.Of course all this WILL change as soon as the U.S. gets hooked up with your EU and joins the VAT pocket picking. The day will come.Hope this helps,Greg

"25 dollars here (CA) buys a cheap meal... without the beer."Well in that case, US citizens are getting extremely good value from a $25 sim addon. We have resisted putting up prices against (in real terms) a decline of 20% in exchange over the last year or so. A lot of European addon developers are struggling to get a decent return from US sales. Incidentally the US/UK exchange rate is the chief reason why Jaguar UK has just sacked a lot of workers and downsized its UK operation. Jags are probably better built than they have ever been but Jaguar simply cannot compete with the US home market even with a car which is miles better than the competition.Cheers,Rob

For those with too much time on their hands, here is the EC document which deals with provision of electronic services (such as downloaded software) from outside the EU to customers resident in the EUhttp://europa.eu.int/eur-lex/en/dat/2002/l...5en00410044.pdf