Xsolla payments and VAT - Cyprus as location of IL2 VAT makes this CORRECT.

[jollyjack]

IMO somethings wrong with the Xsolla system and their VAT charges in the EU.

They charge VAT, but the company itself is located in the USA. IMO IL2 is a Russian company, so nobody is entitled to charge EU VAT.

Where does this VAT go to, I inquired with our Tax department, and did not get a proper answer from them so far.

Seems like some one is pocketing 21% over my paid money to IL2 over all these past years ....

 

ADDED Cyprus as location of IL2 VAT makes charges correct in the EU ...

 

For DCS there's no VAT, bought stuff from DCS as a Swiss registered non EU company,

paid via Paypal and VISA, and was NEVER charged with VAT.

Edited July 28, 2023 by jollyjack

[AEthelraedUnraed]

1 hour ago, jollyjack said:

IMO somethings wrong with the Xsolla system and their VAT charges in the EU.

They charge VAT, but the company itself is located in the USA. IMO IL2 is a Russian company, so nobody is entitled to charge EU VAT.

Where does this VAT go to, I inquired with our Tax department, and did not get a proper answer from them so far.

Seems like some one is pocketing 21% over my paid money to IL2 over all these past years ....

Example, i bought stuff from DCS, a Swiss registered non EU company, paid via Paypal and VISA, and was NEVER charged with VAT.

I did a quick search, and it seems that if your company sells digital products to customers located in the EU, you're obliged to pay VAT to the EU, whether your company itself is located in the EU or not. See https://www.quaderno.io/guides/eu-vat/. The Dutch Tax Office confirms this: "Het uitgangspunt is dat digitale diensten aan particulieren belast worden in het land waar uw klant woont." ("In principle, digital services to private individuals are taxed in the country where your customer lives.")

 

So as far as I understand, XSolla/1CGS are well within their rights to charge VAT, in fact they're obliged to. The same goes for DCS - they have the same obligation, whether or not they actually charge it. Perhaps VAT is already included in the sales price for DCS products?

[jollyjack]

Just checked my DCS invoices, but there is no VAT specified, and it should be by law if applied.

But i just found out IL2 is officially located in Cyprus, pobably the Greek part, and that explains the VAT charges being correct.

Edited July 28, 2023 by jollyjack

[simfan2015]

If you pay in EURO you will pay VAT AFAIK.

Your credit card company and/or paypal will "take care" of this obligation.

Many years ago that was not the case, but it is now.

 

 

[AEthelraedUnraed]

4 hours ago, jollyjack said:

Just checked my DCS invoices, but there is no VAT specified, and it should be by law if applied.

That's something you should take up with them on their forum

 

4 hours ago, jollyjack said:

But i just found out IL2 is officially located in Cyprus, pobably the Greek part, and that explains the VAT charges being correct.

Well actually according to the sources I quoted, companies are obliged to pay VAT for those customers that are located in the EU, no matter where that company itself is located.

 

How the EU is going to enforce that outside of their jurisdiction is another matter of course.

[Zooropa_Fly]

I think it's called theft.