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Should I get a VAT number? (10)

04-12-2021 01:49 PM #1 petzoni (Member)
Should I get a VAT number?

Hello friends
1- Should I get a VAT number?
2- what is the binifit?
3- and how can I get it?


Thanks

04-12-2021 07:04 PM #2 twinaxe (Senior Moderator)

1- Should I get a VAT number?
When your country uses it then yes

2- what is the binifit?
That you don´t have to pay VAT to other businesses

3- and how can I get it?
Ask your tax office

04-13-2021 08:37 AM #3 petzoni (Member)

Quote Originally Posted by twinaxe View Post
When your country uses it then yes


That you don´t have to pay VAT to other businesses


Ask your tax office

Thanks Twinaxe

04-13-2021 11:47 AM #4 matuloo (Legendary Moderator)

This is mostly applicable to EU residents working with EU traffic sources or networks, when it comes to the affiliate business.

Let's use myself as an example, since I'm in the EU.

When I buy traffic from a EU traffic source as a EU resident, they would have to charge VAT on top of my traffic spend. But, since I'm using a VAT registered company for anything affiliate marketing related, I just submit them my VAT ID and the tax is not charged, since this is a B2B transaction between 2 VAT registered business entities. This is regulated by a VAT directive adopted by the EU. If the directive wasn't in effect, they would have to charge the VAT to me and then I would reclaim it locally. So the EU directive just makes this simpler.

Now, if I wasn't VAT registered at all, they would charge the VAT to me and I wouldn't be able to reclaim it.

Which means that EU affiliates who are not VAT registered as actually paying about 20% more (+/- based on GEO) for traffic that they buy from EU located sources.

It's very easy to get registered for VAT in some countries, more complicated in others... for example in my country, you have to either reach certain turnover within a time frame or ask for special approval to get registered, but Slovakia is known for retarded business laws

04-13-2021 12:03 PM #5 twinaxe (Senior Moderator)

Thanks for the detailed explanation.

but Slovakia is known for retarded business laws
Let´s not start to talk about Germany

04-13-2021 01:33 PM #6 matuloo (Legendary Moderator)

Quote Originally Posted by twinaxe View Post
Let´s not start to talk about Germany
It can't be worse than here

04-13-2021 05:10 PM #7 iwanttofly (Veteran Member)

Quote Originally Posted by matuloo View Post
It can't be worse than here
Why, do you have 50 different states, all with their own rules that may or may not be similar? Within each state, do you have numerous subdivisions that each have the ability to set their own rules and tax rates?

04-13-2021 07:39 PM #8 jaybot (Veteran Member)

Quote Originally Posted by iwanttofly View Post
Why, do you have 50 different states, all with their own rules that may or may not be similar? Within each state, do you have numerous subdivisions that each have the ability to set their own rules and tax rates?
All countries have taxes at different levels and some have some really retarded laws.

To be honest, US has some of the easiest business and tax laws around. You can setup an LLC in any state you like (Delaware, Wyoming) with extremely lax restrictions and no state taxes for most applications.

HU is pretty easy to setup a business but taxes are a nightmare.

JP was a nightmare to setup a business but taxes weren’t too bad.

04-13-2021 08:02 PM #9 iwanttofly (Veteran Member)

Quote Originally Posted by jaybot View Post
All countries have taxes at different levels and some have some really retarded laws.

To be honest, US has some of the easiest business and tax laws around. You can setup an LLC in any state you like (Delaware, Wyoming) with extremely lax restrictions and no state taxes for most applications.

HU is pretty easy to setup a business but taxes are a nightmare.

JP was a nightmare to setup a business but taxes weren’t too bad.
I was thinking more sales tax, which can be a nightmare.

I went with an S-Corp in my home state. Fairly low cost, paying a CPA to do the tax for it is by far the most expensive part.

04-14-2021 12:12 PM #10 matuloo (Legendary Moderator)

Quote Originally Posted by iwanttofly View Post
Why, do you have 50 different states, all with their own rules that may or may not be similar? Within each state, do you have numerous subdivisions that each have the ability to set their own rules and tax rates?
Well, depends on how you look at this. My country is part of the EU, so technically it's part of a system of 27 countries so in a way it's similar to US. Every EU member state has their own rules and laws too. So when I sell something to customers from my own country, I have to worry about local laws only, from the most part. But as soon as I target the EU it becomes way more complicated.

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