DO Ideas 2

VAT excemption based on company's registered address

VAT exemption should based on the company's registered address, not that of the bank that issues a debit/credit card or the card holder's address.

A company registered outside the EU may have bank accounts in many different countries and maintain debit/credit cards for company CEOs, CFOs who may or may not reside in the EU. Charging VAT according to the card holder's place of residence or the bank's address is against regulations.

VAT should only be charged if the company's registered address is in the EU.

  • Vlasis
  • Sep 11 2018
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  • ip00 commented
    September 11, 2018 15:45

    This is definitely not the right way to implement billing. Using the country of the issuing bank for the card used as a location of your client is wrong.
    We're not able to use your invoices in a legal way since we have UK issue card and another EU country issued VAT ID. It really makes more sense to prioritize company data from European Commission VIES API system over card issuing bank location since all the data in VIES (VAT Information Exchange System) is provided by EU member states tax administrations.

    As Krzysztof wrote already we have a UK account in order to avoid costly currency conversions imposed by our local bank. There are so many online banks and financial services you can choose from nowadays, open an account and get a card from and their location has nothing to do with where their clients are located. N26, Monese, Revolut, Transferwise...

  • Krzysztof Rusnarczyk commented
    September 11, 2018 15:45

    Because of this behaviour I had to switch my credit card to the one issued by the bank in the country my company is registered.

    This issue is more than just people working abroad. Many banks have pretty poor conversion rates for currency exchange, because they make money on spreads. More, they also add additional fees for the exchange.

    So in order to optimize many people tend to set additional currency bank accounts or use solutions like Revolut. That cannot be done currently in DO.