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B2B Plus Plan VAT and invoice

I'm a (non Irish) EU VAT registered customer. Thereby the VAT 'Reverse charge' applies, which means I shouldn't be charged VAT.

I subscribed a Plus Plan and have been charged VAT from Dropbox. More, the invoice is not compliant. I asked for a refund, Dropbox says they don't refund VAT and don't apply changes to an invoice for Plus Plan.

How can it be and why Dropbox doesn't follow the law?

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Jay

Hi there, our Plus subscription is a product for personal use rather than a business product, so we are obliged to charge tax on it in certain jurisdictions. We are also unable to exclude this from your payment.

Dropbox Plus invoices are created in such a way that we cannot adjust the billing information displayed.

As you use your Dropbox Plus subscription as a business, you may want to change your account name to your business name as described here.

You might be able to use this invoice in your account to claim tax back from your tax authority but unfortunately we can’t exempt your account from tax or refund the tax paid.

Jay

I’d recommend at this point to write to our support team directly for further assistance, as they have more access to the relevant toolset and the necessary access to your account details.

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Jay

Dropbox Plus invoices are created in such a way that we cannot adjust the billing information displayed.

As you use your Dropbox Plus subscription as a business, you may want to change your account name to your business name as described here.

You might be able to use this invoice in your account to claim tax back from your tax authority but unfortunately we can’t exempt your account from tax or refund the tax paid.

artmanjam1

Sorry this totally irrelevant and illegal.

The way you provide invoices is your concern, not ours. The fact is you don't conform to the EU rules. Whatever the subscription plan is, the law applies.

And no, we can't request a refund by our national tax administration as it doesn't exceed 400€.

We are VAT registered and you have to provide us a compliant invoice with VAT exemption. Please check the Irish Revenue site and the EU VAT rules.

Jay

I’d recommend at this point to write to our support team directly for further assistance, as they have more access to the relevant toolset and the necessary access to your account details.

artmanjam1

We already contacted the support for a while.

Not one single precise and detailed answer for now.

Still awaiting for a detailed answer.

BTW I'm surprised by the answers which have been regularly provided on this forum, including yours. Let me say these are fake replies:

- 'our Plus subscription is a product for personal use rather than a business product':
this is relevant to a commercial or marketing practice, it has nothing to see with the law. The law applies whatever the product.

- 'so we are obliged to charge tax on it in certain jurisdictions':
FALSE. This applies to EU private unregistered customers (b2c), not to EU VAT registered ones (b2b).

- 'We are also unable to exclude this from your payment':
that's why you have to fix this.

- 'You might be able to use this invoice in your account to claim tax back from your tax authority':
As said before, we can't submit a VAT refund from our national administration for an amount beyond 400€. And this is not the regular way to manage intra-EU VAT.

- 'unfortunately we can’t exempt your account from tax or refund the tax paid.':
In other words you have unfair commercial practices and Dropbox doesn't conform to the EU rules.

Still awaiting for a valid and detailed reply: Why don't you apply 'reverse charge' for EU b2b customers ?

Jay

I’m not seeing any tickets under your email address associated with your forum profile, I’m assuming you used another address or account to contact the support team?

I still can only recommend contacting that team again on this matter. As this is a very specific billing-related query, we can’t provide any response on this topic on the forums.

artmanjam1

Yes I opened a ticket by the support.

1- After many posts and replies with the support team, I must say I didn't get anything more than here.

2- My topic is not something specific. It's a question which has been submitted by many users for several years. And the replies are all the same, vague and false. It has never been replied it was some specific query for which no answer could be provided here...

I just wonder: nobody in the Wonderful World of Dropbox to give us a detailed answer to our simple question? Unbelievable.

artmanjam1

I already opened a ticket by the support team for more than two weeks now. I don't get any detailed answer to my request. Nothing more (and quite the same, word by word) than here. Other said, copy/paste of what's displayed on Dropbox site. Vague and false assertions.

artmanjam1

I opened a ticket for more than two weeks now.

Let me say the provided 'answers' are nothing more than what I found around here, copy/paste of what's displayed on Dropbox site, which means vague and false statements.

Still waiting for a detailed answer to my question:
Why does Dropbox charge EU b2b customers VAT and which EU VAT rule do they refer to do so?

I've been asked by mail to accept a 'Best Answer'. I didn't get any answer to my question, nore best, nore good. I'm still awaiting for a detailed reply to my simple question I'll be pleased to mark as 'Best answer' as soon as it's a real answer.

jmouritsen

I have the same question! I love Dropbox and it’s user-friendliness, I was so surprised to learn that they are making this so hard for their customers.
From what I can understand I would never be able to legally pay for a Dropbox Plus, through my company (assuming they charge Irish VAT), unless I afterwards seek tax returns from Ireland. Which would be a ridiculous lot of work, for such a small amount.
If I subscribe to their Business tier, I would wave to wait for it to be renewed, to get tax exemption.
That is such a shady practice.

Mark

@artmanjam1 "Why does Dropbox charge EU b2b customers VAT and which EU VAT rule do they refer to do so?"

It doesnt if you use the B2B product. You, however, are not using a B2B product you are using a consumer one which means it is under a different remit. It really is that simple.

@jmouritsen

You can pay for it via your business (I do easily). It isnt illegal at all. Businesses can purchase anything from anywhere. It is no different to the tea/coffee etc. I've just purchased in Tesco for a course I'm delivering this week.

Simply pay for the product as you do every other single one (like you would on Amazon, Microsoft.com, GoDaddy etc.) and then put the invoice in to your accountant and they'll sort it.

artmanjam1

@Mark
'You, however, are not using a B2B product you are using a consumer one which means it is under a different remit.'

This is pure imagination and surrealistic. Not one single company is allowed to state its own rules about VAT. Being a 'consumer' or 'business' intended product is a marketing affair. Nothing to see with the law. The rules apply on any product. And you didn't really answer to my question btw.

So please provide a real and detailed answer :
"Why does Dropbox charge EU b2b customers VAT for Plus Plan and which EU VAT rule do they refer to do so?"

Several weeks already and nobody to properly answer to this.

Mark

I'm based in the UK so things may be slightly different here, but, things are very clearly marked as B2B or consumer.

I cannot, for example, go to any retailer and demand products are none VAT-able just as I have a VAT number unless its specific products within there range. So much so many sites have a totally separate site for Business.

Unfortunately you've been given the answer by Dropbox that they are working to. They wont give more than they already have I'm afraid.

If you are not happy with that or do not want to use the home product and reclaim I suggest, sorry, that you choose another cloud provider.

artmanjam1

@Mark wrote:
things are very clearly marked as B2B or consumer.

Things are not different (until now) in the UK than in any other EU country. The intra-EU VAT rule applies. Once again, the customer status (private or business) determines the relevant rule application, not the product.

And still, you didn't answer my question, maybe you can comment the following.

Here's what's stated on the Irish Revenue site:
'Supply of services to a business (B2B)
For supplies of business to business services (B2B), the place of supply is the place where the business receiving the services is established.
Irish suppliers will not normally charge Irish VAT on services to a business established outside Ireland. Instead, the business customer will self account for the VAT in their State.'

And:
'VAT obligations of Irish traders supplying services to business customers abroad
If you are supplying services to a business customer in another European Union (EU) Member State you should do the following:

obtain the business customer’s Value-Added Tax (VAT) number and confirm its validity
insert the customer’s VAT number on the invoice and retain records of the transaction
issue an invoice indicating reverse charge will apply
obtain a letter from the tax authorities if a business customer is a new business and a VAT number is not available'

artmanjam

This is anything but a best answer.

qlithe

Yeah i have been wondering about this for a long time.