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So, I wanted to make an order with a Poland-based bits producer, a smaller one I've never shopped with before. I picked out some things I liked, and checked out. When I got to the checkout, I realized my order had 23% VAT added onto it.

I've made a great many purchases from other sites overseas*, including some from other Polish bits sellers. I've never paid VAT before as I live in the US. I sent an email, and the response was that Poland charges this as tax and that it would be unlawful to sell without VAT.

I don't think this is true. I'm not an expert, though. What have other people's experiences been with this?


*Please note the obvious exaple: Forgeworld charges 15% on orders in lieu of VAT to overseas customers. They claim they use it for shipping costs and it is not VAT.

As far as I am aware, no, vendors do not and should not charge VAT to non-UK buyers. However, if you have been charged VAT I believe you can claim it back from the UK tax office - not entirely sure how you do that but I recall reading it somewhere.

AFAIK in each case it has to be paid first but then claimed back, either by seller or buyer. In most cases, buyer or seller don't bother with this awkward process and just pay VAT. But I am no expert either.

VAT is a complicated area, and bear in mind I am familiar with UK rules - Polish rules may be *slightly* different. From Filbert's reply, substitute EU for UK and it's pretty close.

1 - No, they do not *have* to charge you VAT as the goods are leaving the EU. They could completely legally sell it to you without VAT.

2 - VAT is complicated - many small companies don't understand it/ have the systems in place to track it, so will take the path of least resistance (for the company) and charge it to everyone.

3 - At least in the UK and I imagine in Poland, if you charge "VAT" to someone from outside the EU, you are legally obliged to pay it to the government in the same way as if it was a sale to an EU individual. You don't get to just keep it as extra profit. You can keep it as bonus profit if you never identify it as VAT - so on a sale of £10 plus VAT (20% in the UK) =£12, if I break the invoice/ receipt down like that, I have to pay it to the government. If I just charged you £12 without stating that £2 was VAT, I could keep the lot.

4 - If you buy something *in* an EU country and take it back to the US, you can reclaim the tax at the airport etc if you have the correct receipts - a retailer *has* to charge you VAT if you are physically in country, you then get it back when you prove the goods are leaving the EU. If a retailer sells you goods mail order and charges you VAT, I don't *think* you can reclaim it.

At least not easily - one of my tasks for this week is to start my company's European VAT reclaim (all the hotel bills etc we run up when sending reps around Europe) and we pay an agency 15% of any reclaim to do the paperwork as it's a pain in the rear. I doubt your claim would be worth your time/ grief to do if you could reclaim it, and it would likely fall below thier minimum reclaim thershold. I can ask them though if you remind me - they know this area much more than me.

TLDR - you are right, they shouldn't charge VAT, but it's complicated.

Thanks for the feedback. I'm going to wind up not ordering from them, 23% is just too much of a premium to pay whether it goes to the Polish government (when it shouldn't) or whether they pocket it as profit.

What company, Ouze? Would be useful to know as I often order bits from Poland, but have never had VAT tacked on.

 RiTides wrote:
What company, Ouze? Would be useful to know as I often order bits from Poland, but have never had VAT tacked on.

Remember though - in most cases, VAT is already tacked on...they just don't normally tell you on your receipt. I know Scribor charges VAT on my orders from them, they are far from the only company I order from the EU who does.

Forge World charges VAT, but they also have said in the past that that money is then put towards the shipping which is why the ROW (aka non-UK) only pay 15% for international shipping, not more (the UK pay 12%).

 ClockworkZion wrote:
Forge World charges VAT, but they also have said in the past that that money is then put towards the shipping which is why the ROW (aka non-UK) only pay 15% for international shipping, not more (the UK pay 12%).

You do realize though that GW is effectively charging VAT even when you buy it in a GW store in the US. They use the price including VAT as their basis for Rest of the World pricing (along with a stiff kick in the groin to Australia and Canada). Otherwise that Hammer of Cadia package would be closer to $285 as opposed to the $330

 ClockworkZion wrote:
Forge World charges VAT, but they also have said in the past that that money is then put towards the shipping which is why the ROW (aka non-UK) only pay 15% for international shipping, not more (the UK pay 12%).

We covered this right in the first post.

 RiTides wrote:
What company, Ouze? Would be useful to know as I often order bits from Poland, but have never had VAT tacked on.

Spellcrow.

richred_uk wrote:

3 - At least in the UK and I imagine in Poland, if you charge "VAT" to someone from outside the EU, you are legally obliged to pay it to the government in the same way as if it was a sale to an EU individual. You don't get to just keep it as extra profit. You can keep it as bonus profit if you never identify it as VAT - so on a sale of £10 plus VAT (20% in the UK) =£12, if I break the invoice/ receipt down like that, I have to pay it to the government. If I just charged you £12 without stating that £2 was VAT, I could keep the lot.

I'm pretty sure there is a law that prices listed in websites/catalogues are de-facto inclusive of VAT, and that you have to state if this is not the case?

 Sean_OBrien wrote:

 ClockworkZion wrote:
Forge World charges VAT, but they also have said in the past that that money is then put towards the shipping which is why the ROW (aka non-UK) only pay 15% for international shipping, not more (the UK pay 12%).

You do realize though that GW is effectively charging VAT even when you buy it in a GW store in the US. They use the price including VAT as their basis for Rest of the World pricing (along with a stiff kick in the groin to Australia and Canada). Otherwise that Hammer of Cadia package would be closer to $285 as opposed to the $330

I did not know that. What an outrage! The UK VAT rate is 20%. It's a hell of a markup especially when some areas put their own sales tax on top.

 Pacific wrote:

richred_uk wrote:

3 - At least in the UK and I imagine in Poland, if you charge "VAT" to someone from outside the EU, you are legally obliged to pay it to the government in the same way as if it was a sale to an EU individual. You don't get to just keep it as extra profit. You can keep it as bonus profit if you never identify it as VAT - so on a sale of £10 plus VAT (20% in the UK) =£12, if I break the invoice/ receipt down like that, I have to pay it to the government. If I just charged you £12 without stating that £2 was VAT, I could keep the lot.

I'm pretty sure there is a law that prices listed in websites/catalogues are de-facto inclusive of VAT, and that you have to state if this is not the case?

It's complicated (the more you dig into VAT the more of a headache it gives you and this explains why small companies might take the 'easy' route of just charging it to everyone even where they could lower their prices by not doing).

Yes, your catalogue/ webiste should show the VAT inclusive price if it is aimed at EU consumers rather than other businesses. However, showing a VAT inclusive price in a catalogue doesn't make a subsequent sale automatically at the price net of VAT to non-EU people, in legal terms the catalogue/ website isn't an 'offer' by the seller, it is an 'invitation to treat' (and now you are sending me back 20 years to my law degree, when websites weren't quite as common and e-commerce didn't exist, so if there's more up to date case law, I'd be happy to be corrected).

There is nothing legally wrong though in selling to you 'Pacific' at £12 gross, and giving you either a receipt that just shows 1 widget @ £12 which (not shown on the face of the receipt) is made up of £10 for the widget and £2 VAT. OR a fully itemised receipt that shows £10 for the widget and £2 VAT = £12 total. In both these cases, I must send the £2 to the government.

There is nothing legally wrong in selling that same thing to 'Ouze' at £10 with no VAT and either just a 1 line receipt @ £10 for 1 widget, or a detailed receipt @ £10 for a widget and £0 VAT. Nothing to the government.

There is nothing legally wrong with selling that same widget to 'Ouze' @ £12 with a one line receipt saying 1 widget @ £12 and keeping the whole £12, nothing to the government.

There is only a problem legally with selling the widget to 'Ouze' @ £12 and sending a receipt detailing 1 widget @ £10 plus £2 VAT, Total = £12 and then keeping the whole £12 - if you invoice like that, you must send the £2 to the government.

Then there's the question in this industry at least of non-VAT registered traders (due to low turnover) who don't charge anyone VAT, so their prices will never change between EU and non-EU. The joy of VAT.

 Pacific wrote:

richred_uk wrote:

3 - At least in the UK and I imagine in Poland, if you charge "VAT" to someone from outside the EU, you are legally obliged to pay it to the government in the same way as if it was a sale to an EU individual. You don't get to just keep it as extra profit. You can keep it as bonus profit if you never identify it as VAT - so on a sale of £10 plus VAT (20% in the UK) =£12, if I break the invoice/ receipt down like that, I have to pay it to the government. If I just charged you £12 without stating that £2 was VAT, I could keep the lot.

I'm pretty sure there is a law that prices listed in websites/catalogues are de-facto inclusive of VAT, and that you have to state if this is not the case?

One company I worked for abput 5 years ago did this for foreign users. If you purchased something that on the website that said £10 + Vat, uk users got an invoice saying £10 + 20% Vat = £12 total whilst users abroad just got an invoice saying £12 total. The extra money was just pocketed by the company.

Apparently this is perfectly legal, though I thought it was indefensible. I was actually working in customer services at the time so has to defend the policy a couple of times. Really hated it as I was complexity on the customers side, but had to tow the company line to keep my job.

 Sean_OBrien wrote:

 RiTides wrote:
What company, Ouze? Would be useful to know as I often order bits from Poland, but have never had VAT tacked on.

Remember though - in most cases, VAT is already tacked on...they just don't normally tell you on your receipt. I know Scribor charges VAT on my orders from them, they are far from the only company I order from the EU who does.

VAT should be shown on all receipts & Invoices (apart from Pro-Forma invoices, but then that should be replaced by a VAT invoice if the order is confirmed). If you don't get details of the VAT charges you are not being charged VAT.

 Steve steveson wrote:

 Sean_OBrien wrote:

 RiTides wrote:
What company, Ouze? Would be useful to know as I often order bits from Poland, but have never had VAT tacked on.

Remember though - in most cases, VAT is already tacked on...they just don't normally tell you on your receipt. I know Scribor charges VAT on my orders from them, they are far from the only company I order from the EU who does.

VAT should be shown on all receipts & Invoices (apart from Pro-Forma invoices, but then that should be replaced by a VAT invoice if the order is confirmed). If you don't get details of the VAT charges you are not being charged VAT.

Not for retail.

HMRC wrote:VAT on bills and receipts
Most retail prices on bills and receipts include VAT - it is not shown separately. However, some may also show the VAT element as a separate line. This doesn't mean you're being charged extra - it just shows how much tax is included in the price.

The thing about showing the VAT on a bill etc is so that companies can reclaim it - if it doesn't show the VAT separately, you can't reclaim, not that it's not being charged. You could argue (but I'm not certain on this) that buying mail order is effectively a retail transaction and so the receipt doesn't have to show the VAT itemised.

 Kilkrazy wrote:

 Sean_OBrien wrote:

 ClockworkZion wrote:
Forge World charges VAT, but they also have said in the past that that money is then put towards the shipping which is why the ROW (aka non-UK) only pay 15% for international shipping, not more (the UK pay 12%).

You do realize though that GW is effectively charging VAT even when you buy it in a GW store in the US. They use the price including VAT as their basis for Rest of the World pricing (along with a stiff kick in the groin to Australia and Canada). Otherwise that Hammer of Cadia package would be closer to $285 as opposed to the $330

I did not know that. What an outrage! The UK VAT rate is 20%. It's a hell of a markup especially when some areas put their own sales tax on top.

By those numbers though GW should be walking away with more than 12% of it's revenue each year in its retained earnings. Makes me think those B&M stores are hurting the bottom line more than I originally thought.

 Steve steveson wrote:

 Sean_OBrien wrote:

 RiTides wrote:
What company, Ouze? Would be useful to know as I often order bits from Poland, but have never had VAT tacked on.

Remember though - in most cases, VAT is already tacked on...they just don't normally tell you on your receipt. I know Scribor charges VAT on my orders from them, they are far from the only company I order from the EU who does.

VAT should be shown on all receipts & Invoices (apart from Pro-Forma invoices, but then that should be replaced by a VAT invoice if the order is confirmed). If you don't get details of the VAT charges you are not being charged VAT.

While correct - what is happening is that you are being charged the VAT inclusive price as opposed to the actual price. The companies are just pocketing the difference on those sales.

It seems to be about 50/50 when ordering from Europe. Half the time, when I check out I will get a 20% discount off their list price - half the time they convert list (including VAT) to dollars and bill it out straight that way.