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  1. #1

    Colocating in Europe - how do you get around paying VAT on imported servers?

    We are hosting a few custom-built servers in a european datacenter and have had a few of them flagged for VAT by customs... however the servers aren't being sold to a European entity and are not for permanent import.

    How do you get around this? To claim the VAT back, you'd have to register for a European VAT number and go through the paperwork of claiming it back... seems a bit overkill for something that shouldn't be taxed in the first place.

  2. #2
    After following up with Leaseweb, Serverius and Evoswtich, they all say that VAT is not charged to colocation clients...

    FYI

    https://data.serverius.eu/knowledgeb...yarticle&id=16

  3. #3
    What does importing equipment into any European country has to do with the fact that non-European companies should not be charged VAT. If one is importing equipment, VAT should be paid... unless there are option in the Tax law of the country. As far as for the companies listed above, they must not charge VAT to customers who are not citizens of an EU country. It is not some kind of accomplishment that they don't charge VAT

    It is probably a better idea to buy equipment from local vendors, instead of importing it, isn't it?
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  4. #4
    Join Date
    Dec 2004
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    526
    Quote Originally Posted by webedgeco View Post
    To claim the VAT back, you'd have to register for a European VAT number and go through the paperwork of claiming it back... seems a bit overkill for something that shouldn't be taxed in the first place.
    Well, they expect you to register for the European VAT number anyway.
    So that you can collect VAT over the services you sell to European consumers...


    Note that by EU law -even if your company is based outside the EU- you are still required to charge VAT to European consumers.
    Many foreign companies "forget" to do that, assuming they cannot enforce that anyway.
    But I wouldn't put equipment there, if you do not plan to follow their rules.

  5. #5
    Join Date
    Jul 2007
    Location
    Coventry, UK
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    348
    Bit of a nightmare this, we get alot of customers send us co-locate machines insured for their list price rather than what they purchased them on Ebay for and consequently get stung for large VAT/import invoices. Presumably the co-location provider you are shipping the kit to is VAT registered, in which case they should be able to claim the import duty/VAT back... It could take them upto 3 months to do this though so you might have to come to an arrangement with them in the meantime..?
    UK Dedicated Servers since 2003
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  6. #6
    Quote Originally Posted by UK Servers View Post
    Bit of a nightmare this, we get alot of customers send us co-locate machines insured for their list price rather than what they purchased them on Ebay for and consequently get stung for large VAT/import invoices. Presumably the co-location provider you are shipping the kit to is VAT registered, in which case they should be able to claim the import duty/VAT back... It could take them upto 3 months to do this though so you might have to come to an arrangement with them in the meantime..?
    Yeah, quite a ****** situation considering there isn't even supposed to be VAT charged to it in the first place.

  7. #7
    Join Date
    Jul 2007
    Location
    Coventry, UK
    Posts
    348
    Yup, we generally warn customers and tell them to put a cover note explaining it will be sent back etc etc however it never works and import VAT is always charged. I guess HMRC have no way of telling if the server is ever returned so have to charge the import VAT. I belive there is an exception/deferred VAT for items that are here to be repaired but proof has to be made of return of the item within six months..
    UK Dedicated Servers since 2003
    www.ukservers.com - 0800 610 1 620

  8. #8
    Quote Originally Posted by UK Servers View Post
    Yup, we generally warn customers and tell them to put a cover note explaining it will be sent back etc etc however it never works and import VAT is always charged. I guess HMRC have no way of telling if the server is ever returned so have to charge the import VAT. I belive there is an exception/deferred VAT for items that are here to be repaired but proof has to be made of return of the item within six months..
    It's not about return date, it's about who it belongs to... the equipment is not transferring ownership to an EU corp or individual. I don't get charged VAT on my laptop when I visit EU. Every hosting company has stated the same that VAT should not be charged to the hosting company or the shipper unless it is being sold to that company/individual.

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