VAT, and all that

[wrightee]

I was just wondering how European AdSense partners accomodate the VAT man with their payments from Google and if there's a 'right way' to deal with receipt of payments (i.e. AdSense) for which you didn't provide an invoice in the first place? Has anyone already figured that one through with their accountant?

Chris

[jetteroheller]

I am from Austria.

I have to write a bill with VAT only for customers in the EU.

Always for Austrian customers.

When a customer is from an other EU country and has a UID (German short cut for Value Add Tax ID),
I can write him also a bill wihtout VAT.

Since the checks are from an US company, it's considered as an export from me into the USA.

[wrightee]

Thanks. That's what I figured. So I guess the thing to do is to just prepare 'invoices' that match the amounts paid by Google.

Let's hope they don't shift payment facilities to Google Europe...

Cheers, Chris

[lammert]

The income from Adsense can be treated as an export to the USA. Therefore VAT does not apply if you live in a EU country.

It is not necessary for such an export to send an invoice if you receive a "credit invoice" from the company sending the money to you. Some advertize networks clearly use the word "credit invoice" on their bill, but unfortunately Google doesn't.

I use the "record of payment" attached to the check as a credit invoice and the tax department is happy with it, as long as they receive all the money they think is theirs.

Tax laws differ between countries and for exceptional situations like Adsense earnings it is often subject to the individual interpretation of the law by a tax lawyer, accountant or tax department employee.

In general WebmasterWorld is not the best place to get your definite answer on tax questions. My personal advice is to call the tax department in your country. Their advice doesn't cost you any money and their answer is authorative. Tax lawyers and accountants on the other hand will charge you money and their answer is informational only, just as mine.

[jetteroheller]

From the Austrian standard account system, I used 4830 provisions to book my income from an US call back provider 1996..2000 and from Overture for their search box until 2003.

I was checked 2002 by the Austrian IRS. So the method seems to be good.

[blairsp]

Certainly in the UK you do not register for VAT until turnover is £58,000 ($110,200). Well above most adsensers earnings I would think. Even the UPS clubbers would just make it.

[vincevincevince]

I spoke to customs and excise on this very matter two days ago. The answer was that it was a section 5 exemption for income from website advertising.

[wrightee]

I spoke to customs and excise on this very matter two days ago. The answer was that it was a section 5 exemption for income from website advertising.

Thanks, glad you got an answer. They seem to be getting better on 'net stuff; three or four years ago you could hear the blank stares down the phone... :)

[jetteroheller]

[
I spoke to customs and excise on this very matter two days ago. The answer was that it was a section 5 exemption for income from website advertising. ]

Can You point me to a web site where this is described?

I want to talk about this in the Austrian chamber of commerce.

[wrightee]

Actually, something doesn't compute:

If there's a Section 5 exemption, then I wonder how it is that G adds VAT for those buying AdWords...

As of July 1, 2003, all AdWords accounts with European Union (EU) billing addresses became subject to Value Added Tax (VAT) charges. In addition, as of January 22, 2004, all EU advertisers moved from being an advertiser with Google Inc. (United States headquarters) to being serviced and billed by Google Ireland Ltd (EU).

I'll see what I can find out from HM C&E and report back.