Forum Moderators: martinibuster
Today, I got a message in my account stating I can switch my account currency to euros from now on. I immediately did so and everything now shows as euros. Gone are the days of hawking forex rates near payout time. What I would like to know though, is whether google uses daily currency rates now? That would be very nice.
ASA: So if you have additional VAT or tax questions, please bring them to your tax advisor.
Well, here's the problem ASA: My accountant says he cannot really help me (=I have to pay VAT if I sign the TOS with Google Ireland), and he cannot understand how Google Ireland can categorically claim:
"you should not have an obligation to charge Google VAT"
Surely that depends on the several factors (VAT registered or not, do local VAT laws differ from EU VAT laws, etc) - He would like to know on which EU laws/exemptions this public Google claim/advice/statement(?) about taxes is based on?
Why cannot the publishers decide whether they sign the TOS with Google Inc. or Google Ireland.
I disagree. Google is in the same position as a person buying a car from a merchandiser.If the merchandiser is not VAT registered then no VAT issue would arise from the transaction. If the merchandiser is VAT registered in an EU country and because Google Ireland is VAT registered in the EU then there is a VAT issue. As a VAT registered business, you have to include VAT in your prices. You cannot pick and choose which customers you will charge VAT to and which you will not. The key element is whether the publisher is registered for VAT.
Regards...jmcc
I have to pay VAT if I sign the TOS with Google Ireland
do local VAT laws differ from EU VAT laws
You cannot pick and choose which customers you will charge VAT to and which you will not.
By the way, this is exactly what VAT-registered publishers do, when they implicitly agree that Google will not add VAT to the payments (I assume the Irish agreement doesn't say VAT will be added by Google).
[edited by: true_INFP at 1:17 pm (utc) on Mar. 5, 2009]
If your local laws require you to pay VAT, then you have to pay it even if you agreed to the US Google agreement. It doesn't matter to which country you export your goods or services.
Wrong. I have a document, from my Government's tax authorities, specially requested, stating that I do not need to pay VAT if I have a contract with U.S. based company, about electronically delivered advertising services.
At the moment it seems, disappointingly, that the moment I sign the TOS with Google Ireland, I lose 22% of my earnings. Not really fair. Tiny warning, like two years before such a colossal change, would have been nice.
Iran, with it's zero (0%) VAT, starts to look like a good place to relocate your business into ;-) I'm just kidding, who would relocate there, when British Virgin Islands have no capital gains tax, no VAT, no profit tax, no corporation tax, and income tax set to zero (and it costs about 1000 bucks to set up a business there).
Wrong. I have a document, from my Government's tax authorities, specially requested, stating that I do not need to pay VAT if I have a contract with U.S. based company, about electronically delivered advertising services.
I believe the latter. And then it doesn't matter if you have an agreement with the US Google or its Irish subsidiary.
Not a lawyer either. But I'll wait before signing up for this 'Reporting' thingy.
Our tax regulations say I should make an invoice including VAT for Services delivered inside Europe.
How are you going to do that with Google Ireland?
I'm not as I didn't sign up for this new deal. If Google isn't going to add VAT. I'll have to assume the amount is including it. The invoice is "virtual" just to keep the bookkeeping in order. That's the whole point of this discussion. I would like to have a statement from someone knowledgeable about why Google is excluded from this VAT issue. And if so, how do I file it with the tax authorities.
And like I stated this was not an issue with Google US.
Our tax regulations say I should make an invoice including VAT for Services delivered inside Europe
Definitely one more thing I would like to see Google/ASA (=Google tax experts in Europe) explore more - What will happen if EU publishers start to send Google invoices, or request a breakdown of the payment from Google (actions based on EU laws)?
And good luck with sending Google invoices for your VAT.
Google can't just ignore them if they wish to do business on this continent - EU has previously quickly forced much bigger global companies (like Microsoft) to obey and respect laws in EU area.
[edited by: johnnie at 3:05 pm (utc) on Mar. 5, 2009]
Therefore, aren't we obliged to pay VAT?
If such is the case, then we are also supposed to invoice Google for this VAT.
I disagree. Google is in the same position as a person buying a car from a merchandiser. The person buying the car does not care about VAT, unless the merchandiser tells him/her to pay a price increased by VAT (and even then, the person wouldn't have to know that he/she's paying VAT as part of the price).
(IANAL)
But if the person buying a car were a business, he or she would need a clearly specified receipt, in order to account for her tax administration.
Strictly taken, if VAT applies to this business, this would be illegal. If we are obliged to collect VAT, then Google is obliged to explicitly pay it. Whether as part of your current income or as an adddendum, Google would have to specify its payment to explicitly include VAT.
It would be nice to get an official response from Google's legal team.
(IANAL)
[edited by: johnnie at 3:42 pm (utc) on Mar. 5, 2009]
Yes, provided that the agreement with Google doesn't prevent you from doing so.
true_INFP, I don't know where you live or what law is applicable to you, but adding VAT is *NOT* a matter of choice where I live. It looks like you either aren't registered as business/person for VAT and/or you don't care loosing ~20% of your income from Adsense.
But if the person buying a car were a business, he or she would need a clearly specified receipt, in order to account for her tax administration.
explicitly states that Google does not pay VAT or other taxes.
I'm not sure why a business should care about that at all. The business is the end customer and it is not their responsibility to send the VAT money to the government (it is the merchandiser's responsibility).
The buying business can redeem the VAT they paid, since said car is a business asset. VAT is seen as a form of pre-taxation to business. So it makes an awful amount of sense to correctly account for VAT.
Strictly taken, if VAT applies to this business, this is illegal. If we are obliged to collect VAT, then Google is obliged to pay it.
It is the publisher's obligation. And since the agreement prevents the publishers from collecting the VAT money from Google, the publisher has to pay the VAT money.
The place of supply of the following services to customers established outside the Community, or to taxable persons established in the Community but not in the same country as the supplier, shall be the place where the customer has established his business or has a fixed establishment for which the service is supplied, or, in the absence of such a place, the place where he has his permanent address or usually resides:(b) advertising services;
(k) electronically supplied services, such as those referred to in
Annex II;
The implication of this, is that Google (said 'customer') and the publisher are effectively doing business in Ireland. Are publishers therefore not obliged to pay IRISH VAT to the IRISH government, instead of local VAT to the local government?
I'm not sure why a business should care about that at all. The business is the end customer and it is not their responsibility to send the VAT money to the government (it is the merchandiser's responsibility).
No, the business wants to get it back.
Bddmed, the VAT laws in my country say nothing about adding VAT to retail prices (for end customers). They just talk about one's obligation to pay VAT, not about ways to collect it.
You must be kidding.
Strictly taken, if VAT applies to this business, this is illegal.
That's how I think too. Unless someone can point me to some clue where it says this is allowed, I'm doubtful and won't sign up (I won't even know how to file this situation with the authorities if I did).
As an example Skype is collecting VAT for European customers (They are based in Luxembourg, I think). They need to do this because they deliver a service and not factual goods.
You must be kidding.
[edited by: true_INFP at 4:11 pm (utc) on Mar. 5, 2009]
ASA, could you pass this on to the legal team? The rampant speculation and misinterpreting here is not helping anybody. We need an official, authorative statement.
I quote, from [eur-lex.europa.eu...]The place of supply of the following services to customers established outside the Community, or to taxable persons established in the Community but not in the same country as the supplier, shall be the place where the customer has established his business or has a fixed establishment for which the service is supplied, or, in the absence of such a place, the place where he has his permanent address or usually resides:(b) advertising services;
(k) electronically supplied services, such as those referred to in
Annex II;The implication of this, is that Google (said 'customer') and the publisher are effectively doing business in Ireland. Are publishers therefore not obliged to pay IRISH VAT to the IRISH government, instead of local VAT to the local government?
Google will have to acknowledge (normally you do that by stating it on your invoice, (but I've a distinct feeling Google doesn't want to get invoices from us) that they are in charge of doing what they need to do regarding VAT with the Irish government (basically they need to pay the VAT to the Irish government themselves, and can substract it as VAT paid on the same form (however it exactly is worded in Irish law), resulting in a de-facto null operation for Google and the Irish government.
VAT for a real business never is an issue: you only need to collect it and pay it, but you get it back in the amount paid and you need to hand it over to the government in the amount collected. The only one paying it in the end is the consumer, the business that cannot deduct it for some reason, or the extremely difficult method of getting it back from a foreign EU country if you got charged it there.
I fully understand Google wants to get out of paying all the foreign VAT, every business wants that. And it seems Google has the a number of possible exceptions open so they'd be stupid not to use it.
What Google IMHO should do is
Toward businesses being a publisher
- Provide an Irish VAT number
- Provide a statement that it is their opinion they do not need to pay intracommunity VAT inside the EU based on either of the exceptions referenced above in the quoted text. (E.g. amazon's .co.uk, .de .fr affiliate programs (which are deals you sign with a Luxembourg based company) does provide such a statement.
If you go with that statement and their Irish VAT number to your accountant you should not have much more questions from him/her, otherwise (s)he's likely to want to apply the general rule (to charge VAT on services)
For publishers that do not have a VAT number themselves etc.: I've no idea what they need to do to declare the income properly (I think where I live there are exceptions for "extraordinary" income for private persons, but it'll never fly if you get it on a recurring basis, so I'm afraid those that do are at least in a gray area of the law and I fully understand Google doesn't want to go there with advise.
Now how about the other EURO zone countries ? our neighbors to the north, east and south are in, but you forgot some of us ...
[edited by: swa66 at 4:30 pm (utc) on Mar. 5, 2009]
Now how about the other EURO zone countries ? our neighbors to the north, east and south are in, but you forgot some of us ...
