Marketplace prices - EU VAT

Community Marketplace
1

All marketplace prices for an EU registered member include VAT.
This is wrong, for VAT registered companies located within the European Union!

Based on the Cross-border VAT EU directives (Cross-border VAT rates in Europe - Your Europe)

Selling Products to businesses
If you sell goods to another business and these goods are sent to another EU country,** you do not charge VAT** - if the customer has a valid VAT number.

You may still deduct the VAT you yourself have paid on your related expenses (goods/services bought in specifically to make those sales).

If the customer does not have a valid VAT number, you must normally charge VAT on the sale at the rate applicable in your country.

Selling Services to businesses
You do not normally charge your customers VAT. Your customers will pay VAT on the services received at the applicable rate in their country (using the reverse charge procedure).

You may still deduct the VAT you yourself have paid on your related expenses (goods/services bought in specifically to supply that service).

Now, your European billing address is located in Switzerland (Epic Games International S.Ă  r.l., Baar Branch, Lindenstrasse 16, CH-6340 Baar, Swiss Tax Registration Number: CHE-358.969.724, EU-VAT Identification Number: EU528001425).

Although Switzerland is not a member of the European Union, it is a member of the Economic Free Trade Association (EFTA) and the signing of the Free Trade Agreement in 1972 formed the basis of economic relations between Switzerland and the European Union countries. Switzerland therefore largely complies with European VAT legislation, as defined under the Sixth VAT Directive (2006/112/EC). VAT-registered independent businesses operating from Switzerland will therefore be subject to the VAT directive, to the degree that the Swiss authorities are bound by it in putting in place standard and reduced rates within the permitted range, and setting the national rules regarding when and how VAT should be charged by registered businesses and individuals.

Under new rules coming into force with regard to the EU (and therefore having an impact on Switzerland, as described above) between 2010 and 2015, business to business (B2B) supplies of services will be subject to VAT in the country in which the consumer is located, rather than the supplier’s country of residence, with the business consumer required to account for VAT using the reverse charge mechanism (whereby they act as both the supplier and the consumer, charging themselves the VAT where appropriate, and then claiming it back). For telecoms, broadcasting and electronic services these changes are delayed until January 1, 2015.

Considering all the above, I think you should create a mechanism in the Account section for VAT registered members to enter their VAT number, and for those members Marketplace prices should be VAT exempt.

2

Nope, your wrong. Digital goods are different thing. In digital goods you pay taxes to sellers country.

3

As of January 1st 2015 all EU companies that sell digital goods online should comply with the following new rules:
– if the company sells to any countries in the EU, they will have to charge VAT in the country of the buyer instead of the seller.
– if the receiving party of the digital goods is a consumer, the company has to charge the VAT percentage from the country of the buyer
– if the receiving party of the digital goods is a company (with a valid VAT number) a reverse charge mechanism is in order, in understandable English this means there is a 0 percent VAT charge.
– if the receiving party of the digital goods is a company without a VAT number or has an incorrect VAT number, the VAT of the country of the buyer must be charged.
– if the company sells digital goods to companies or consumers in their own country, local VAT needs to be charged.

5

Hello! Apologies for the delay in response, but I had to spend some time chasing down a precise answer for this. After consulting with our finance department at Epic HQ and internationally, this is what we’ve found:

We agree with you that our prices should only include an amount of output VAT for services to private individuals that are resident in the EU. Epic Games pays the VAT amount due to the local tax authorities in the EU country where our private customer resides. Our private customers therefore should not have any VAT liability in this respect. In this respect we emphasize that Epic Games is a Swiss based company that only provides electronic services from both a Swiss and EU VAT perspective and Epic Games therefore should be bound to Swiss VAT invoicing and VAT accounting rules.

We also agree with you that based on the EU VAT place of supply and VAT liability rules the VAT reverse charge mechanism should apply in business to business situations. Therefore our business customer should be required to account the VAT due on payments for our services in the EU country where it is registered for VAT. In this respect, however, nothing has changed as of 2015.

6

Thanks for coming back on this. So, if understand the second part of your answer, the reverse charge mechanism applies for your EU VAT registered customers, right?
If that is right, there should be no VAT charged by your side on the sale.

When the Reverse Charge is applied, the recipient of the goods or services makes the declaration of both their purchase (input VAT) and the supplier’s sale (output VAT) in their VAT return. In this way, the two entries cancel each other from a cash payment perspective in the same return.

Anyway, I will not chase this any further. I bet you have a strong finance department over there at Epic. This issue is something my accountants raised, after they tried to book invoices from Marketplace purchases. Based on my accountants view, you shouldn’t charge VAT.

7

Ok, So what is the Non Mumbo jumbo answer here?. Watched a show on UK TV recently where it was exposed that shops in airports were selling products in their shops at the same price or higher than the STANDARD price of goods in the UK (EU) retail outlets even though they were out of EU sales which means the customer SHOULD of get a price reduction as VAT is not applicable. In others words taking the 20% cut for their own.

Please don’t tell me that Epic is doing the same kinda thing, If your selling in the UK you should pay the Tax in the UK, I don’t care if you have some tax scheme based in Switzerland, Do the right thing and pay the tax in the country of sale. Remember you couldn’t even sell these products on market place to such a large audience if the UK tax payer hadn’t payed so much for good Internet access in the first place. I’m confused by this and would like to know what Epic is doing with a tax area in Switzerland?

Cheers J

8

The email explanation I received for this was much longer and more complicated than the summary, but it boils down in large part to the differentiation between physical and digital goods and services and the specific tax laws and regulations that we follow. That’s about as far as I can explain and interpret this on my own without needing to consult further, because yeah, tax and finance laws are pretty tricky, and crossing borders is a complexity multiplier. :slight_smile: I hope the answer I was able to give is sufficient.

The answer I gave actually was the very simplified version. I’m sorry, but I don’t think I’m going to be able to give you a simplified answer for this that has to begin by explaining the reasons why companies incorporate in Switzerland.

9

Cheers , I know why companies incorporate in Switzerland. Simply because its a good way to not have to pay the tax in the country of sale which is generally far higher than in Switzerland. Bean counters may advise this type of thing but the more banks, and large corporate entities do it while countries all over the world like Greece and the UK etc etc have to cut services like nurses, doctors, carers because deficits caused by these banks and big businesses not paying their share the higher chance society as a whole disintegrates. Who you going to sell to when it all goes wrong?

Big difference between legal obligations and moral ones. But thanks for the answer. Cheers J

1 Like
11

Hello,

I am reviving this thread because I find myself in the exact situation described by romfeo. My business is based in Germany so I need to declare VAT under Reverse Charge for any digital good I purchase in the Unreal Marketplace. The tax can be recovered by also declaring the same amount as input VAT. However, in order to declare input VAT under Reverse Charge, I need to produce an invoice by Epic Games subject to many requirements including the address and VAT number of my company (as customer). How do I provide my company information to Epic Games so that their invoices comply with the Reverse Charge procedure?

12

You may need to get in contact with about that. They should be able to direct you on what to do here. Good luck.

13

Hello aglx,
Hello Support team,

I have similar problem, I purchased through xsolla, which is your Client to handle purchases (at least for) German Customer on some payment methods.
I have also a case open at your support: Case ID: 4050970

It’s very annoying, that I have to write many Mails to your support, and to get as answer to get to xsolla directly. Xsolla answered now, that they only operate under a “B2C business model” NOT B2B. I don’t think it’s a good idea to use a Business2Customer Client for handling your purchases in the UE4 Marketplace, which is Busniess2Business mainly.

I wrote already enough mails to your support and to xsolla, please clarify the case in general.
It’s very simple and detailed explained the case 4050970.

  • We bought UE4 marketplace assets for business (as normal)
  • Payed with your marketplace offered payment methods
  • Get invoice from xsolla, which is not EU VAT conform, but it is showing VAT on the invoice. (If you instead use the “Reverse Charge procedure”, this must show up on the invoice, with VAT 0. But xsolla is showing VAT and no “Reverse Charge procedure”.)
  • Please clarify to sent EU VAT conform invoices, even through xsolla.
  • I need 3 corrected invoices.
  • EU VAT rules: https://ec.europa.eu/taxation_custom…icing-rules_en

Thanks a lot.

Best regards
Flow

14

Update: No VAT conform invoice yet. Still waiting. xsolla said they gave it to the “legal team”. I can’t believe I have to wait weeks to get legal EU VAT conform invoices noways, and with big companies. It seems xsolla handles purchases for the UE4 marketplace, but is not ready for B2B business with EU customer.

15

Update:
6 weeks ago from my first support request because of wrong invoices of xsolla. Backlog of 5 invoices have to be corrected. Still no solution. But xsolla was asking for corporate address at last Friday. It’s unbelievable to have invoice problems for weeks with such big companies. (For he support: Case ID: 4050970)

16

4 months are gone, still not clarified.

Am I the only B2B customer in the EU to use Xsolla Payments? Most of the Marketplace possibilities to pay are with xsolla. Xsolla invoices are still not B2B conform (Not EU VATconform. Still showing VAT, without all the important informations to be EU VAT conform).

17

how can I find out the date I created my account?

18

Hi. I’m bumping this as I’m a freelancer in the UK and have been VAT registered for a while and need to bring my records up to date. I need to be able to pull down VAT receipts for all my purchases. Cheers.

19

You will receive receipts for all transactions via email. You can also access your payment history from your personal dashboard, or you can request a more detailed invoice that includes company and VAT information by completing this form. VAT Invoice Request - Formstack

20

Hello,
has there been any clarification on this issue?
I received VAT invoices today using the form provided.
However, there is no VAT % described on the invoice, but the reverse charge remark. As if there was no VAT charged for the purchase at all.
Is it correct that you do not charge VAT for any purchases at all, private or for businesses?

21

Did anyone get a correct reaction from Epic to his one?

23

Bump on this topic. Do we have information if prices on UE Marketplace have VAT?