There has been a new VAT Act in Europe since 01.01.2015. What is noteworthy here is that the VAT of the seller country no longer applies, but rather that of the buyer country i.e. the “place of performance”. As a result, your customers, who come from all over world and in particular from the EU, have to pay the respective VAT of the buyer country. The VAT collected must then be paid to the tax office of the respective country.
1. What the new VAT Act means for you as a vendor
First of all, you as a vendor on Digistore24 have to do nothing. However, we do recommend indicating that the VAT rate depends on the country with a “*” on your sales page. As usual, Digistore24 will take care of the complete process and settlement with the tax offices of the respective countries. 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 is always the same, however the final price varies depending on the buyer country.
2. 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.
Digistore24 has been charging an additional 8% VAT to customers from Switzerland since 01.11.16. As a reseller of your products, we have to pay this 8% VAT to the Swiss authorities.
Effects on existing subscription and installment payments
Even subscription and installment payments for customers from Switzerland completed before 01.11.2016 are affected. Payments made since November 1, 2016 will be charged with an additional 8% VAT.
No effects on events and seminars purchased from Switzerland
a) 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 8% as normal.
b) 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 8% charged?
The movement of goods across borders, in this case between the EU and Switzerland, must always be considered from two perspectives when it comes to VAT – from the perspective of Switzerland and from the perspective of the EU:
- The EU perspective is based mainly on Directive 2006/112/EC (so-called Directive on the VAT system) and on the laws of the respective nations.
- On the other hand, the Swiss perspective is based on the Value Added Tax Act (VAT Act) and the VAT Ordinance.
Further information on the directives adopted by the EU
As of 01.01.2015, an important reform regarding European VAT has come into effect in the EU, which can also affect Swiss companies. The background to these changes are various previously adopted EU Directives (included the so-called VAT Package 2010 – Directive 2008/8/EC of 12.02.2008 – or the EU Implementing Ordinance under no. 1042/2013 of 07.10.2013). The EU’s objective was to achieve a “fair and transparent tax treatment of electronic commerce” in order to remove competitive disadvantages for EU companies, amongst other things.
This especially affects services and content that are made available on the internet or made available to download in online trading. Specifically, these are: E-books, software (for PC or smartphone), audiovisual media, internet services, webhosting, online advertising and computer games.
Further information on the Swiss VAT Act
For digital products, the tax rate amount can be taken from Art. 25 para. 1 of the VAT Act, since digital products do not qualify for the reduced tax rate of 2.5 percent. See paragraph 2 of the Swiss source.
Here you will find the official changeover page.
Here you will find the requirements and instructions of the Swiss authorities.
As of July 14, 2017