Since 01.01.2015, a new VAT Act has been in force in Europe. The essential point is that the VAT of the seller's country no longer applies, but that of the buyer's country, i.e., the "place of performance." This means that your customers, who come from all over the world and particularly from the EU, should pay the respective VAT of the buyer's country. The collected VAT should then be paid to the tax office of the respective country.
Don't be confused by the two terms "VAT" and "sales tax" used synonymously - they essentially mean the same thing in Germany. In German tax law, "Umsatzsteuer" (sales tax) is the correct term, as it goes back to the "Umsatzsteuergesetz (UStG)." However, in connection with sales to private customers, "Mehrwertsteuer" (VAT) is more common; and from a European perspective, this term is also correct because the "Mehrwertsteuersystemrichtlinie (MwStSystRL)" of the EU forms the legal basis of the German sales tax law.
What the new VAT Act means for you as a vendor
As a vendor on Digistore24, you don't have to do anything for now. However, we recommend mentioning the country dependency of the VAT rate with an asterisk (*) on your sales page. Digistore24 will take care of the complete processing and settlement with the tax offices of the respective countries for you as usual. The order process remains the same.
For private customers, your sales commission will vary slightly depending on the country and its tax rate (e.g., German customer: 19%, Austrian customer: 20%).
For business customers, your sales commission remains the same; however, the final price varies depending on the buyer's country.
Important changes to product prices for customers from Switzerland
The EU Directive adopted on 01.01.2015 also includes a change to the Swiss VAT law. This change affects private and business customers from Switzerland who buy digital products and electronically supplied remote services through Digistore24.
Since 01.11.2016, Digistore24 has been charging VAT to customers from Switzerland.
New from January 1, 2018
As of January 1, 2018, 7.7% VAT will be charged.
We, as the reseller of your products, have to pay this 7.7% VAT to the Swiss authorities.
No impact on events and seminars purchased from Switzerland
- For educational events and seminars taking place in Switzerland, no VAT is charged for private and business customers. All other regular seminars (leisure) will continue to be taxed at 7.7% as usual.
- If your Swiss end customers buy tickets through Digistore24 for seminars taking place within the EU, the VAT of the respective seminar country will still be charged. A Swiss customer who wants to attend a seminar in Germany will pay the German VAT amount of 19%.
On what basis is this 7.7% charged?
The cross-border movement of goods, in this case between the EU and Switzerland, should always be considered from two perspectives when it comes to VAT – from the perspective of Switzerland and from the European perspective:
- The EU perspective is mainly based on Directive 2006/112/EC (the so-called VAT system directive) and the laws of the respective nations.
- The Swiss perspective, on the other hand, is based on the Swiss Federal Act on VAT (MWSTG) and the VAT Ordinance.
More information on the directives adopted by the EU
On 01.01.2015, an important change regarding European VAT came into effect in the EU, which can also affect Swiss companies. The background to these changes are various EU directives previously adopted (including the so-called VAT Package 2010 – Directive 2008/8/EC of 12.02.2008 – or the EU Implementing Regulation No. 1042/2013 of 07.10.2013). The EU aimed to achieve "fair and transparent taxation of electronic commerce" to eliminate, among other things, competitive disadvantages for EU companies.
This mainly affects services and content made accessible or offered for download on the internet. Specifically, these are: E-books, software (for PC or smartphone), audiovisual media, internet services, web hosting, online advertising, and computer games.
More information on the Swiss VAT Act (MWSTG)
For digital products, the tax rate can be derived from Art. 25 para. 1 MWSTG, as digital products do not fall under the reduced tax rate of 2.5%. See the Swiss Federal Act on VAT (paragraph 2).
Verification/further information
See https://www.admin.ch/gov/en/start/documentation/media-releases.msg-id-55183.html
As of July 14, 2017
Please be sure to read the information on legal advice.