European Union (EU) VAT Collection

What is VAT?

The Value Added Tax, or VAT, in the European Union is a general, broadly based consumption tax assessed on the value added to goods and services. It applies more or less to all goods and services that are bought and sold for use or consumption in the European Union.

 

Who has to pay VAT?

Generally, VAT is invoiced by the supplier that is selling goods or services and collected from the customer. Subsequently, the supplier reports and remits the collected VAT to the tax authorities.

If you are a business customer, you should provide your VAT Identification Number to Sakari (see ‘How do I enter my VAT ID?’ below for details on how to do this).

If you are a business customer, you should provide your VAT Identification Number to Sakari. If your VAT number is shown as valid, you will not be charged local VAT by Sakari. In this scenario, the service qualifies as a B2B service which you may be required to report in your periodic VAT return under the reverse charge mechanism as a service purchased from outside the EU.

If you do not have a VAT number, then VAT will be charged on the goods and services made to you by Sakari.

 

Does Sakari have a VAT ID number?

Sakari does not have a VAT registration in each individual EU Member State.  Instead, Sakari is registered for VAT through the non-Union Mini One Stop Shop (‘MOSS’) in the EU.

The non-Union MOSS scheme is a simplification available for taxable persons that are not established in the EU, to collect and remit VAT on supplies of telecommunications and/or electronically supplied services made to non-business customers in EU Member States.

The MOSS scheme allows suppliers of telecommunications and/or electronically supplied services to non-business customers to avoid registering individually in each EU Member State.

Sakari has selected its country of identification for MOSS purposes as Ireland.

 

Which VAT rate applies, the one where the customer is located, or the one where Sakari’s VAT ID is located?

Sakari will charge the VAT rate applicable based on where the customer is located.  This is based on the ‘Sold To’ address location, which is subject to cross-referencing against other information.

 

What exemptions are available and how does a customer notify Sakari?

Customers who provide a valid VAT number will not be charged VAT by Sakari. Due to the structure of the VAT system, no other exemptions are available.

 

How do I enter my business sold to address and VAT ID?

To update your business address and VAT ID number, please contact the Sakari support team at: help@sakari.io

 

Do I need to have Sakari’s VAT ID?

No, Sakari is registered for VAT through the non-Union MOSS scheme and as such does not have an individual VAT registration in each EU Member State.

 

Are there any VAT obligations for me as a customer?

If you have provided a valid VAT number no VAT will be charged to you.  However, you may have a requirement to report the purchase of services through your VAT return via the reverse charge mechanism.

 

What if I have a VAT ID and forget to enter it?

Your VAT number can be updated at any time. If entered before the next invoice, Sakari will not charge VAT on the next invoice or future invoices issued to you.  If no VAT number is entered at the time the next invoice is issued, VAT will be charged until a valid VAT number is entered.

If a valid VAT number is entered and VAT has previously been charged on the invoices issued to you, then upon request by you, Sakari may refund for any VAT included on invoices issued in the thirty days prior to a valid VAT number being provided.  However, VAT will not be refunded on any invoices issued outside of this thirty-day period.

 

If I have entered my VAT number will Sakari issue me an invoice?

Yes. Sakari will issue an invoice for all supplies made to business customers.

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