Deduction of VAT: Page 2 - OXI Instruments Forum

Deduction of VAT

Manuel

davehouse I just checked you enjoyed a VIP discount. Be sure you won’t find this price in the future.

Manuel

ginfonic That’s impossible to control/handle in Indiegogo, even less with all the VIP options. People would have gone for the cheapest option. The platform doesn’t offer any tool/control.

ginfonic

Manuel

Manuel Hi, Manuel. Yep maybe Indiegogo can’t accept it. But i’m not a backer. I just wanna to place a preorder here and now. And you not being indiegogo absolutely can do VAT deduction. You should not pay VAT to Spain tax service for my order shipped to Russia, so you should subtract VAT value from my price. It’s possible, the only point is in your intention.

Manuel

SLiC Be sure future customers won’t enjoy a VIP discount. In any case, you can request a refund if you are not completely sure about your contribution. Shoot us an email in that case.

Same applies to anyone else.

But please, be aware with the increase in the price of components and raw materials of more than 40%, distribution margins etc., you won’t find the OXI One in retailing for much less than 700€.

davehouse

I definitely won’t be asking for a refund. I can’t wait to get mine 😁 It’s just a shame all the recent Brexit and Covid stuff has made it so hard for small businesses and consumers alike. As ever, thanks for being upfront about everything

SLiC

Maybe you can ship them as gifts/samples with the original 1E value! Otherwise the poor UK guys will have another 100E on top of the launch price?

Manuel

ginfonic hi, we cannot change the policy now. Otherwise previous backers would be left in a disadvantageous situation. Conditions are the same as during the campaign.
The only thing we can do for now is to deliver the best possible product and do it on time.

ginfonic

Manuel Disadvantageous situation? The previous EU backers paid €550, I will pay 550*1.2=660 paying VAT twice. Who of us will be in disadvantageous situation? I guess I will. But if you deduct VAT that I don’t have to pay I would be charged the same 550 as the other EU backers. At it will be honest.

inseptic

It sucks for sure, as the product is essentially ₂₀% more expensive for you, if you’re a business owner. I also paid the full price at Indiegogo even though I’m a VAT registered business in Germany. I guess Indiegogo is not really set up for b2b transactions. It’s more of a b2c situation. They don’t even send proper invoices. I only got a “contribution receipt” from Indiegogo per email. It’s completely useless for my taxes.

Manuel

inseptic we’ll send you a proper invoice before we start shipping!

SLiC

Yes, Indiegogo is a terrible platform for this type of thing (Kickstarter is a little bit better for financials but not much)

At least the price you paid is all you have to pay, we have to pay an extra about an extra 100 Euros on delivery in addition to what we have already paid….

Manuel

ginfonic Sorry for the late reply, I meant that other UK backers are in the same situation.
We cannot deduct now and issuing partial refunds is not feasible.

highstandards

The current situation makes it impossible to get the VAT back unless one picks-up the device in the EU and exports it themselves (send stamped invoice back for refund).
For the others, articles sent in the EU will be VAT inclusive while when items are exported, they will be ex-VAT (but same price) as OI can’t collect VAT on items shipped outside of the EU.
Lots of merchants on Amazon marketplace (and elsewhere) have the same attitude and most of the time the issue can be avoided by ordering from somewhere else.

Some European makers taking pre-orders try to make it better by charging people outside of the EU the same amount but in USD, so $500 or 500€ depending on location, which is better than nothing I guess, but unless the discount is huge, as has been mentioned before, one is just better off getting the device from a store (if available).

I’m surprised Indiegogo is this bad and doesn’t let creators put in a price without VAT. Would make things way simpler since VAT isn’t due until the item is shipped.

bilb

Hi all, UK backer here, DHL are holding my delivery as they want to charge me money, just checked the breakdown and it’s £11 for “Duty Tax Receiver” and £33.29 in VAT… so I gather from this thread that I’ve already paid EU VAT when I first backed, but is there really no way to avoid having to pay it again?

Manuel

bilb As previously pointed out several times, indiegogo doesn’t allow all this. Same price for everyone.
We would have added in that case 20% to the VIP backers in that case, not deducted to the other ones. 350€ -20% VAT makes this an impossible business model these days where you have to pay 50-100% more for almost everything, when it’s not 1000% for some electronic components…

SLiC

Also waiting for mine in the UK- the simple answer is '‘no’, the UK have to pay about 20% more for the OXI than an EU customer as we are being double taxed. OXI could have (should have) deducted the EU Tax for non EU customers as they wont have to give that money to their tax man, so they just make more profit on non-EU orders. Ultimately they will have to address this (as I think it is actually illegal (fraud) to charge EU TAX to to a non EU Customer then keep the money) but they probably have enough going on right now without that complication so I am cutting them some slack and paying double tax as basilcay there is no other option if you want an OXI!

Whatever happened you would have to pay the £11 quid as that is what the currier charges for doing EU-UK Paperwork- utter rip off obviously, but blame the p[people who voted for BREXIT not the small EU suppliers trying to sell to us with all the red tape we now how!

natehorn

SLiC I’m looking at this now and also a bit confused.

The store has a ‘no VAT’ price of 540eur - but customers outside of the EU are charged 600eur. This implies that customers outside of the EU are paying VAT, no? If not what is that extra 60eur for? I’m a bit baffled, never come across pricing like this myself, and I’ve been a VAT paying business…

I agree that Brexit complicates this issue but it should still be clear what taxes are being paid and to whom. I know that tourists paying VAT abroad can claim it back from their own government, but I don’t think I’ve ever come across an EU seller that charges it for an online purchase, because it’s easily avoidable and would complicate their accounting. In the UK this kind of transaction if with an EU buyer would involve what’s known as ‘reverse charge’ VAT, and the customer would pay the no-VAT price.

I’m excited to get my Oxi One either way I don’t want to get distracted by tax haha

Edit: I’m now reading some more of this thread and am left even more confused. Is the extra 60eur some kind of ‘fairness’ charge, because Indiegogo forced you to charge original backers VAT and then you kept it?

This all sounds very strange, I think you should consult with some experts on this guys because it’s not how this stuff works. There needs to be one non-VAT price, and you either charge VAT or not - If it means people part of the Indigogo compaigned paid a different price, then that’s a historical issue that surely you wouldn’t want to perpetuate? Backing a project is very different to being a regular ecommerce customer. It seems you’re currently intentionally charging people outside of the EU more for your product, that’s unheard of - and a distorted view of fairness in my opinion.

And it goes without saying that as soon as retailers have your product this is not how it will work. Thomann will not have a different price for EU customers than UK ones. So whether you fix this problem today or tomorrow it will be fixed - I see no reason for you to continue overcharging folks.

I think what people normally do in this situation is the opposite, and flatrate at the original price. That would mean everyone would be paying slightly more - but either way everyone should be paying the same price (before tax).

Hopefully you can resolve this because it’s going to cause you issues 🙁

Sending good vibes, Nate

Manuel

natehorn hzd Hi, thanks for taking the time to share your thoughts.
VAT has not been covered at source but with a lower declared value, backers are paying nothing or not more than 50 pounds which is less than 10% of the OXI Price, so quite less than any EU standard VAT.
For EU OXI One it’s about 640€, 40 € more than for non EU countries.
@SLiC was really worried about the customs fees and in the end the experience was quite positive I think 🙂

hzd

I also find this strange.

However, my (totally prejudice) impression of OXI instruments: A couple of musicians with a very good idea for a product, but maybe not a very clear idea of a business model. Or business in general. Still they venture into it and this product now is real and I’m still very excited to receive mine. It almost seems brave of them 🙂

I looked into the tax thing earlier this week, but when I converted the euros to my local currency, the amount wasn’t that much. Still the principle… It doesn’t look good, and I agree with Nate above. Maybe someone more experienced with tax, rather than music, should help you guys out with this 🙂

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