The VAT SCAM done by the BIG BOYS - E.U edition -

Bellow I'm gonna show you how you probably got scammed at some point by the big boys if you live and do commercial acts in the E.U

EXTRA TIP: If you want to lower you general tax amount open a company and put all your life expenses in that company because most of them can be legally deducted. Check your fiscal rules in you country first.

As I said above in this thread I'm gonna show how you probably got scammed ranging from 10% up to 25% for a digital or physical product you ordered online.

My first interaction with this scam was when I bought a subscription to Ahrefs ( if any member of Ahrefs is on this forum you can suck my dick with your current prices) and their payment processor FastSpring charged me 19% VAT for my puchase of 400$. 19% of 400$ is almost 80$ (a nice launch with your lady).

I contacted FastSpring and I told them that if you live and do business in E.U you pay reverse VAT meaning you pay VAT in the country you live and do businss in and charging VAT in this case is fiscal fraud. They panicked, called me and appologized and refunded me the VAT and when I told them that I will file a complaint to the fiscal authority of the E.U they tried to bribe me with Amazon gift card and other cupons WTF. We settled in the end but not for Amazon gift cards.

Second time I encountered this scam was when I bought a digital product through Gumtree. Same story paid for the product and they charged me 19% VAT. Contacted them they apologized refunded the VAT and said to me that this is the way their platform is built, LOL. I tried to squize more from them but they ghosted me.

Final thoughts: The reverse VAT is a thing in EU only if buy digital and physical goods with a company. In some EU countries this is also valid for individuals. You can twist this method to get a discount from 10% up to 25% for every online purchase you will ever make. Use your brain.

What is your experience with this?

Yeah, indeed they do that. Especially ahrefs but not only them. If you do business inside EEA and have a business there, you DON'T need to pay the VAT - if they charge you is a SCAM.

I get a vibe you Romanian like me.. maybe we can exchange some ideas

SunnyLeon said:

I get a vibe you Romanian like me.. maybe we can exchange some ideas

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Your vibe is right....I don't usually do PMs but PM me if you have something good to say.

laur.laurix said:

Your vibe is right....I don't usually do PMs but PM me if you have something good to say.

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Nah, I never have good things to say, just remember you have a close friend by geography around here

SunnyLeon said:

Nah, I never have good things to say, just remember you have a close friend by geography around here

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Good to know.

I forgot to mention.....squizing them is not illegal....it's totally legal to reach a monetary settlement outside a court if your legal rights were broken.

Have never had any problems with Ahrefs regarding the VAT or any other company. To avoid such issues I usually add my VAT number in notes, if there is no place to add it in the checkout form or inform chat support in advance.

RayBay said:

Have never had any problems with Ahrefs regarding the VAT or any other company. To avoid such issues I usually add my VAT number in notes, if there is no place to add it in the checkout form or inform chat support in advance.

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Do they charge you VAT? Are you located in the EU? If they do it's fiscal fraud.

laur.laurix said:

Final thoughts: The reverse VAT is a thing in EU only if buy digital and physical goods with a company. In some EU countries this is also valid for individuals. You can twist this method to get a discount from 10% up to 25% for every online purchase you will ever make. Use your brain.

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You are doing something wrong hands down. I've never had an issue with all the Payment processors like Gumtree that comply with EU TAX rulings.

Have you signed up in the VIES with your VAT ID?

laur.laurix said:

Do they charge you VAT? Are you located in the EU? If they do it's fiscal fraud.

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No, they don't.

SirLouen said:

You are doing something wrong hands down. I've never had an issue with all the Payment processors like Gumtree that comply with EU TAX rulings.

Have you signed up in the VIES with your VAT ID?

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Yes....since I sell in all E.U i had to register.....but they still charged me VAT....they do this scam because most of the customers don't know the E.U fiscal legislation.....and they know they are breaking the law because they agreed to compensate me.

laur.laurix said:

Yes....since I sell in all E.U i had to register.....but they still charged me VAT....they do this scam because most of the customers don't know the E.U fiscal legislation.....and they know they are breaking the law because they agreed to compensate me.

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Most systems have this completely automated. As soon as you input your VAT ID, they discount the VAT. Weird that Fastspring don't have this implemented by default.
For example, Chargebee that is used by this forum has it implemented by default.
I don't think is a scam, but just a poorly coded system that should be improved.

Also be aware that many companies don't have VIES implemented, still do business in Europe. VIES is designed to have this solved when both companies have it. Otherwise technically is not even illegal to sell in Europe without VIES (but with full VAT).
It's your fault not to ask for VIES before doing the purchase, not an scam. In fact, personally depending on the amount of the purchase, I ask for VIES data to the company so I can check it (for example when I'm buying a +$500 something in PayPal from my company to a EU company)

I live in the Canary Islands where there is not VAT and it is still the EU. Most companies try to charge me VAT, except major ones like Stripe and Amazon. I always send an email with a threat and get the money back.

Also if I buy any digital item that says "no refunds" and I'm not satisfied, I write 1 email threatening them with the EU regulations and instantly get refunds too(they could lose their Stripe account very fast). The EU guarantees me refunds on digital products too (https://europa.eu/youreurope/citizens/consumers/shopping/guarantees-returns/index_en.htm#:~:text=14%20day%20cooling%20off%20period,you%20simply%20changed%20your%20mind.). If they want to do business with customers in the EU they have to respect the law here.

In the EU you have the right to return purchases made online or through other types of distance selling, such as by phone, mail order or from a door-to-door salesperson, within 14 days for a full refund. You can do so for any reason – even if you simply changed your mind.

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I do not abuse this. Just being fair. Often the products are crap.

SirLouen said:

Most systems have this completely automated. As soon as you input your VAT ID, they discount the VAT. Weird that Fastspring don't have this implemented by default.
For example, Chargebee that is used by this forum has it implemented by default.
I don't think is a scam, but just a poorly coded system that should be improved.

Also be aware that many companies don't have VIES implemented, still do business in Europe. VIES is designed to have this solved when both companies have it. Otherwise technically is not even illegal to sell in Europe without VIES (but with full VAT).
It's your fault not to ask for VIES before doing the purchase, not an scam. In fact, personally depending on the amount of the purchase, I ask for VIES data to the company so I can check it (for example when I'm buying a +$500 something in PayPal from my company to a EU company)

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Are you from BurgerLand? It sounds like you are from BurgerLand......here in Europe we don't have to do detective work to be sure that compnies will respect our consumer rights they have to do it by default as requiered by the law.

I don't care their platform is built this way.....as soon they take my money as "VAT" it's a scam and fiscal fraud.

laur.laurix said:

Are you from BurgerLand? It sounds like you are from BurgerLand

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Where is Burgerland out of curiosity? Nowadays, burgers are everywhere.

laur.laurix said:

I don't care their platform is built this way.....as soon they take my money as "VAT" it's a scam and fiscal fraud.

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Nope, it's not that way.

It's your duty to do the right check-ups as a company before buying. Anyone can sell in EU without being registered in VIES, charging VAT to their customers (if their customers are up to it).

In fact, at least in my country, you have to do a tax report for every single purchase or selling you do EU Tax exempt. So this works the other way around: is a benefit for those companies that comply but doesn't that doesn't are less competitive (because, me as a buyer, cannot declare the paid VAT outside my company in my VAT tax report).

So for example, if I'm buying a screen for 200€ + 19% VAT in Germany, if I buy it in a VIES registered company they will charge me 200€, and I will declare $200 VAT exempt, total spendings 200€
But if I buy the same screen 200€ + 19% = 238€ I will have to pay full price 238€ and I will not be able to report this extra $38 because they have been paid locally for Germany, so basically in my report I will have to say that I just paid 238€ as if it was VAT exempt.

So basically I would prefer to go with the VIES registered company because I'm saving those 38 euros. Sometimes you don't have this option.

For example, I recently purchased many Oxygen plugins from dplugins.com, made by a guy from Croatia (HR EU code), but this guy is an individual, registered freelancer in his country, but not registered in VIES. So I had to pay full price + VAT and this is not a scam. This is how this works. Probably he should register in VIES because it's free, and he only has to do a little extra duty to keep informed his government in exchanging of selling his EU customers tax-free. But is, on his hand, is not a scam.

Inform yourself. I already took my time with my national tax bureau to understand how this works.