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We want to open our business account with adsense, but we're confused about VAT. We know that adsense earning doesn't contain VAT. If there is anybody run such business here in Slovakia, is adsense earning subject to VAT? Do we have to pay VAT for government from our adsense earnings?
Thank you in advance.
Companies don't "pay" VAT, they collect VAT from their customers, they pay (less) VAT to their suppliers and they give the difference to the local government The VAT was never theirs, they collect it on behalf of the government, the VAT they paid might not always qualify for recuperation.
VAT rates for foreign services inside the EU is a tricky business (and we all should lobby they cut it out and handle services like they handle goods). VAT for customers outside the EU is simple: 0%.
INAL, contact your local VAT office/your beancounter if you're in doubt.