kinguin loginAttention!From 1st January 2015 the European Union changes the tax regulations.Please choose appropriate tax region below.

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When is the European VAT on digital services applied?

If You Are a European Union Resident

For customers from outside of the European Union
the taxation is not applicable.

You Are an EU Resident If:

  • Your IP Location is within an EU country OR
  • Your Billing Address provided at checkout is within an EU country

According to the new European Union Directive 2008/8/EC as of January 1st 2015, all electronic services will always be taxed in the country of customer’s residence.

For example if you live in Germany the VAT on ANY electronic service provided to you must be with 19% VAT.

Retailers are obligated to monitor what locations the customers come from and apply a proper VAT rate.

various tax rates


Businesses Do Not Pay VAT

For businesses in the EU:

  • All transactions are VAT exempt
  • A Business Customer must provide a valid VAT number and proof of registration

For businesses outside the EU:

  • All transactions are VAT exempt
  • Business Customer must provide the company details with a registration number in the local Chamber of Commerce or its equivalent (i.e. Companies House etc.)

Kinguin Answers:

Do other non EU countries apply VAT too?

Not yet. But that is soon to change. Countries such is Australia or South Africa are currently working on similar rules for businesses providing digital services to their residents.

Can i avoid paying the EU VAT as an EU Resident?

The obligation to charge the VAT relies solely upon the service provider and not on you as a customer. Retailers MUST determine the customer's residence by 2 pieces of non-conflicting information. At Kinguin, your place of residence is determined by the IP you have when using our service and the billing address provided at checkout.

What if my country doesn’t belong to the European Union but I am currently on a short trip to Europe?

In such situation you can confirm your regular country of residence using SMS verification with a telephone number from your country of residence.

I am an EU Resident with a Company outside the EU. Do i have to pay VAT?

Any business transactions with Kinguin Limited are VAT tax exempt. For companies within the EU Kinguin requires a proof of VAT registration and a valid EU VAT number. For companies outside the EU, Kinguin requires only the company details with a registration number in the local Chamber of Commerce or its equivalent (i.e. Companies House etc.)

What happens to Retailers not complying with the new EU VAT rules?

Consequences can be severe. Every of the 28 EU jurisdictions is entitled to initiate legal steps against retailers in question for VAT fraud. These steps may include not only civil actions but also VAT Fraud criminal charges through a General Attorney prosecutions.

Financial penalties include twice the amount of VAT unpaid without any upper capping limit (in Denmark and Belgium), and 50% of the VAT due in Spain. Other EU member states have upper limit monetary fines of €125,000 (Slovenia); €66,000 (Croatia) and up to €50,000 (Germany). To help eMerchants’ understanding Taxamo compiled a definitive document outlining the penalties for EU VAT non-compliance and late registrations across the EU.

Tax authorities are also aware that many overseas merchants have establishments within the EU and will be seeking to execute the VAT from these entities as well.

How do tax authorities find about non-compliant Retailers?

Apparently the UK, German and Polish authorities are amongst the most active in tackling VAT Fraud. Tax authorities use for example web bots – programs and scripts that can identify suppliers of services on the Internet – that can trawl it automatically.

Do you have any more questions regarding VAT?

Do not hesitate and contact us.

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If you change the country of residence the retail price will include the tax applicable for that country, or no tax if outside of the EU
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