Back in January 2015, new rules on the place of supply for EU digital services (i.e. web hosting) came into action. The purpose was to stop some of the industry giants from basing themselves in low-tax countries and taking advantage of this when supplying customers around the world.
Unfortunately, these rules had no lower threshold, so suddenly any small business that wanted to supply services to another EU country had to charge VAT at the local rate, collect these fees and pay them individually to the EU member states each quarter, adding a huge burden of additional paperwork and costs. At Valcato, we vowed to keep our prices the same no matter where our clients are based, so we also ended up bearing the cost of this lost revenue, in addition to the administrative cost.
Well. We’re very pleased to announce that effective immediately, the powers that be have decided to implement a lower threshold on EU sales, below which businesses will no longer be affected by these rules. Therefore, as of 1st January 2019 we are no longer charging VAT to EU based customers.
We have always covered this cost ourselves, so you won’t see any reduction in the amount you pay, but your invoice will now show the total cost of your plan as payable to us, with no separate VAT breakdown. The only change for our customers will be that you’re now able to rest assured that 100% of the price you pay now goes directly towards providing you with the best possible service and investing in new hardware and features, and not lining the coffers of VAT collectors across Europe.
As always, if you require any further information please do get in touch with any of our team, we’re always happy to help!