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VAT details missing on Dropbox Pro Invoice

I have gone through the VAT related questions on the forum. It seems, the Dropbox admin is not getting the question. Hence, I am sending a copy of my Dropbox Pro invoice (which does not show Dropbox VAT number nor VAT separately) to HMRC (Tax Department in the UK) as it is a legal obligation in the UK to give a VAT receipt showing VAT number of the seller and VAT rate as well as amount. This is necessary for a business in the UK (and for that matter anywhere in Europe) to claim back the VAT paid on the service.

This is not applicable if Dropbox is not collection VAT but it is quite clear that they are charging VAT. Now if they are charging VAT, then they must remit VAT collected to the Office of Revenue Commissioners in Republic of Ireland and we as a user should be able to claim this VAT back if we are using the service for our business and we are VAT registered in any of the EU countries.

So it really surprises me to see the reluctance of Dropbox to simply resolve this issue by adding VAT details on the invoice (and it is not that they don't have this facility in their invoicing system because they are already providing VAT invoice for Dropbox for Business subscription)

I guess I will leave HMRC to deal with as they have gone quite strong now-a-days with issues like this.

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Accepted answers

Mark

Note I dont work for Dropbox so its just my understanding, but, this is the info from the Dropbox site

https://www.dropbox.com/help/971?path=payments_and_billing

Dropbox is not stating that it isnt charging VAT, it is, its just bundled in to the price.

All comments

Mark

I think this may be your issue..... VAT details only need to be added to BUSINESS products (see this guide from KPMG - http://www.kpmg.com/Global/en/IssuesAndInsights/ArticlesPublications/vat-gst-essentials/pages/united-kingdom.aspx#6 ). Dropbox Pro is not, and never has been a 'Business' product. It is intended for Home users. Therefore it is EXEMPT from supplying said information.

Also, remember that Dropbox is not based within the UK so it is actually an international company - its based in Ireland if you pay in £ sterling or America if in $

Umesh R.

The link you have mentioned states:

Is a business required to issue tax invoices?

Only for supplies to business customers. There is also no requirement to issue invoices to certain persons in other Member States where the supply is exempt

Read carefully "WHERE SUPPLY IS EXEMPT" so is the supply of your services in the UK exempt from VAT?

Moreover KPMG is not HMRC (or the Government tax department). Also read the following:

https://www.gov.uk/vat-on-digital-services-in-the-eu

As a digital service provider you are liable for UK VAT (or respective EU country where your customer is based). Also nowhere on the link to upgrade to Pro (https://www.dropbox.com/upgrade) says that it is only for personal use and not for business use.

Mark

Note I dont work for Dropbox so its just my understanding, but, this is the info from the Dropbox site

https://www.dropbox.com/help/971?path=payments_and_billing

Dropbox is not stating that it isnt charging VAT, it is, its just bundled in to the price.

frauke g.

Dropbox should be submitting VAT returns under the VAT MOSS scheme for customers based in EU countries, which could mean you should be automatically paying VAT, but at your local rate instead of on the "Reverse VAT" system.

I would reclaim the VAT at your local rate, unless you get an invoice stating its under the reverse VAT system. If you get an VAT inspection - let the HMRC confirm if you have claimed it wrong or not. As long as you have an invoice and know what the VAT number is, you should be covered as thinking you have paid VAT on the invoice.

frauke g.

From the link https://www.dropbox.com/help/971?path=payments_and_billing:

If you operate a business in the EU, we'll charge the VAT rate of the EU country you are based in. You should be able to reclaim VAT payments from your tax authorities.

I think you are fairly safe in treating your Dropbox invoice as including VAT at your local rate. Keep a "hard" copy in the file for your accountant or who ever does your VAT return!

Eskil S.

Yes DropBox should deduct the VAT if the buyer has a EU vat registred company.

"The mechanism for collecting VAT when the place of supply is not in the same member state as the supplier is similar to that used for Intra-Community Acquisitions of goods, i.e. zero-rating by the supplier and reverse charge by the recipient of the services (if a taxable person)."

https://en.wikipedia.org/wiki/European_Union_value_added_tax

dave h.46

Some EU countries, require both the VAT number of merchant and customer (Business/Sole trader) on the invoice/receipt in addition to the VAT rate being charged and from where (for reverse VAT purposes)

All basic accounting 'facts'. I has zero expertise with this kind of thing... I am however good at spotting people trying to con me....

and I believe this is just a bullying tactic by dropbox to push small businesses to use Dropbox Business.

As a sole trader i don't need 5 users!! But i would really like the opportunity to get my VAT back!

frauke g.

dave h, there is nothing to stop you from writing the VAT number on the invoice/receipt, and writing the breakdown yourself. That is all you need to do to get your VAT back! I wonder which country you are in, as I have 30 years of VAT experience, and don't know of any country that is that strict. Many would like to be, but in the real world they aren't. If VAT is included in the payment, you have the right to reclaim the VAT if you are VAT registered Apple used to refuse to give invoices, so everyone just reclaimed the VAT. Now they give them if asked, but its time consuming.

[This thread is now closed by moderators due to inactivity. If you're experiencing a similar behavior, feel free to start a new discussion in the Dropbox Community.]