DAN changes invoice/transaction/VAT process! [They act now as seller to your buyer]

[Domainication]

I noticed today that all my DAN landers are showing VAT informations like for example:

I was a bit confued because of the VAT law of my country i'm not allowed to charge any VAT.
So i checked the settings in my account which are still set the correct way:

And after that i requested their support about that and they told me something interesting:

[..]Dan is now listed as the Seller on any transaction. Since we are a Dutch company and VAT registered, we charge VAT to relevant EU buyers.

They changed the way they handle sales like afternic do for severel years now.
DAN acts now as the seller. And when you sell a name you sell it to DAN (and they sell it in their name to the buyer).
So it is not about if YOU are in need to charge VAT to a customer anymore. Its about them now and they are a EU company.

I mean, at one view it's okay for me. Now i only have to use one creditor to send invoices to.
The bad thing is that EU customers will now charged with VAT which they were not before (based on your own situation). Hmm..

Did you knew about that? I haven't read anything about it in their last Newsletters.

 

[dr manos]

Well, if it is what EU taxation authorities want - then there is nothing wrong with this scheme. Open question - the VAT table does not include the following: Business in the EU buying from a seller located outside EU. This is what happens with all non-EU DAN sellers, as they now sell domains to DAN. What about VAT in this particular case

yes this is the only not clear point.
Scheme is better now for EU Sellers, but donto know for an EU Buyer with business EU VAT number if has VAT in a deal with third country (third according to EU i mean).

 

[DNabc]

I will tell you, with experience, that even support is confused... if I had not explained (several times, but without success initially) they were going to charge me 23% extra on a 25k sale for no reason. I lost hours on this, right now my confidence there is really low.

 

[DNabc]

To be clear, they weren't going to charge their usual commission + vat, they were going to withhold the vat tax on the entire sales value PLUS their commission, so in reality they wanted to keep half the sales amount. Because I have a company they cannot do it, VAT is 0% even if support was denying multiple times. How they change to whom we sell domains and you don't even have to accept it?

However think if you are a personal European seller, you better remove all domains from DAN ASAP as they will keep practically half the money. One day these companies will decide they can take whatever (what about 90%?) and if you set an old buy now you will be threatened even if you never agreed to such changes.

 

[Jannes]

However think if you are a personal European seller, you better remove all domains from DAN ASAP

Thank you. Removing is not an option, because then some a**hole will relist some of them without me knowing. I'll just remove all BINs and make minimum offers $1,000,000. I also use brandable sale page templates (but not landers anymore) with descriptions, where I can tell the potential buyers who are using Dan's marketplace to visit the landing page (Afternic or Sedo). Dan won't like the latter but I don't care what they like.

 

[DNabc]

If you list at Afternic without buy now it should solve the problem, but I do understand you very well. It's sad we have these problems because their system is broken.
Many EU sellers aren't vat registered because they haven't reached such threshold, but DAN / Undeveloped BV think it's ok to make a change to your agreement (one we didn't confirm) that can literally take around 50% of your money (withhold VAT based on full sale amount + 25% if you don't use their landers that are blocked on many networks) and you will only understand that too late. Do not accept this.

 

[twiki]

Imo is much better now for EU companies.
Previously had to create invoices for any buyer, handle the respective VAT etc, as DAN was the intermediate.
Now Dan will handle the VAT, so as sellers will invoice all times DAN only with 0% as is company in EU with EU Business number.

It is indeed better for EU companies (I run my sales through a company).

Cases when an EU buyer is a firm and doesn't have VAT are rare. Most buyers from EU have a company (actually we are selling a lot to known hosting firms who buy on behalf of their customers).

This takes a lot of paperwork out and also the need to distribute VAT to countries as per the MOSS regulation.

 

[DNabc]

Many EU sellers are not VAT registered companies, especially on this forum... now DAN is charging / withholding VAT to them, the only marketplace doing so?

Before, when buyer was US company or anywhere outside EU that same seller had obviously no VAT involved, now they will give up to a quarter of the domain amount to DAN / Undeveloped BV for no reason.

In total, those people will see the proceedings of any DAN sale cut by around half the sales amount. One year ago that same person would pay less than 1/3 that on that platform, they set their BIN prices, now they will get a nasty surprise. Imagine being super happy for making a 5k sale or whatever and DAN sends them a little above 2.5k... enjoy losing money.

 

[laur77]

Thanks for the post. I didn't notice this change.
What a mess is now this platform.

 

[DNabc]

As we all expected when Godaddy bought them, they went from a really domainer friendly platform to the absolute worst for EU sellers that aren't VAT registered... by far.
Even to me they wanted to keep half my money despite me saying multiple times I was VAT registered (buyer is from US) so it was 0%, only after I stopped the domain transfer and said I hereby cancel this transaction they said I was right after all... now a week later they still try to strong-arm me.
I was told that by Monday they would cancel it but today got an invoice with full amount I "owe them" (many thousands) as if buyer had paid full amount (buyer only sent first instalment out of 10). I removed all my domains from there, in 25 years I never saw so much confusion.
So many times we read we must have "buy now" pricing, how good it is, well... that's like giving a blank check to these marketplaces, they can change their commissions or to whom you sell your assets and you are supposed to accept anything they are willing to pay you, even if it's little more than 50% ... many will learn that the hard way.
If this doesn't affect you, good for you, but it does affect many people. Wasted so many hours for the past week but facts are facts, even if Godaddy / Dan employees / fanboys aren't happy about exposing this.

 

[DNabc]

Some Godaddy partners already put their extra cherry on top of our bin (which affect our sales, because some may not want to pay more), I feel that if we start selling our names to the middleman like at DAN we are opening the doors for full arbitrage mode... they harvest leads, even through our parking pages, pay us X and sell for X^2... they are just reselling after all.
And we gave way this just because it's more convenient for processing VAT? It's like giving biometrics to Amazon / Whole Foods or Worldcoin, all fine, right? Not for me, and I didn't agree with that.

 

[Future Sensors]

agreement (one we didn't confirm) that can literally take around 50% of your money

How did you calculate this 50%, if I may ask?

 

[DNabc]

I explained above. Let's say price is 1000 and you are EU seller without VAT registered company, they will deduct (in my country) 23% tax.

Support: "The NET receivables will be with VAT applied. To make it simple, for each sale the sum that you will receive will be with the VAT deducted from it."

Adding to that there is their commission, 25% if you don't point to their DNS because you have a website, you don't want to use their landers that are blocked on many networks, etc.

When you put together the 23% and the 25% you get "around 50% of your money", you would get little more than 500 from the 1000 sale. Hope this was clear.

PS. Some countries have 25% and even 27% VAT taxes , all that will be deducted from your receivables if you are an individual seller or company that didn't reach high enough threshold to collect VAT. And will private sellers be deducted that or Netherlands VAT rate?

PS2. Let's not forget they converted all listings to USD at the "current market exchange rates", that will be another extra cost (on their exchange rate plus when receiving money at their bank) for many EU sellers that were selling in Euros. A Netherlands company, the only marketplace that charges European VAT but forced people into USD transactions. Funny.

From what we have seen these past weeks, even support is confused, and seems we sellers need to just accept anything they decide and be happy? They make a new contract that few seem to know how it's actually working and for sure I didn't accept.

 

[laur77]

I quote the dan.com customer support answer:
"the VAT amount paid by the buyer is no longer related to your location as a seller",
so, they will apply the Netherland 21% VAT (where the seller, now, dan.com, is based).

For EU scenario: a buyer, private person, it will have to pay 1210$ for a domain listed by the seller at 1000$ and an EU-based company will not be charged with VAT, so they will pay 1000$.

Now, the seller, private person, EU based in my scenario, will get, from the 1210$ paid by the buyer (private person also): 1000$ (domain price) - 250$ (25% dan.com commission/if the NS are not set to dan.com) - 52.5$ (21% VAT over dan.com commission) = 697.5$

Resuming, for this scenario, the seller will get 697.5$ from a total of 1210$ paid by the buyer.
Pure Goddady spirit.

Personally, I will redirect all my XXX$ domains to bodis.com and there I will select the option to sell them through escrow.com (I have looked and, for me, it's 15$ commission - so I will get 985$ from a 1000$ domain sale) as for this case scenario is unacceptable to go along with Godaddy's plan and, for the moment, I will leave the domains priced over XXX$ on dan.com as those are bought, mainly, by EU-based companies (for this scenario, for the moment, the things do not change).

 

[DNabc]

That is the scenario where they push VAT on private buyer from EU as well, if you go to scenario where it's EU private seller to US buyer (most common for me), only EU private seller will pay (get deducted) for a vat tax that doesn't exist on other marketplaces.
The TLDR is that private persons should never deal with DAN (as buyers or sellers), just go to Afternic if you want to use Godaddy (for now).

PS. on my ticket they were blaming the support employee for being new (poor person was now the scapegoat) and giving me wrong info (telling me that even as a registered VAT company I would have that deducted from my receivables).
I said: "Do not blame X, the issue is with DAN that did not give clear instructions to the support team after these changes".

 

[laur77]

My inquiry to dan.com:

<< I am selling as private person, based in Europe (let's say Spain / 19% VAT tax) and I would like to know how much a buyer it will have to pay for a domain that I have it listed at 1000€. What will be the final price for (A) a particular buyer (private person) from Europe (the same country / Spain) and for (B) a company also from the same country and (C) how much will I get after deducting the platform commission if the Nameservers are set to your platform. It will be deducted 15% over my selling price (1000€) + the 21% VAT applied over the 15% comission, like before? >>


The dan.com answer:

"The VAT amount paid by the buyer is no longer related to your location as a seller.

Our company is now the counterparty to the transaction. This means that the invoice for the buyer is issued by us with our company registration details and the VAT will be applied accordingly.

So to answer your example:
A) All buyers from Europe that are not VAT registered pay VAT
B) If it is a company in Europe (except the Netherlands) they will not pay VAT

C) For you as a seller, the VAT is still applied to the commission amount.
C.1) Our commission rates are as follows:

• 15% if your domain is using our nameservers when the payment is received (this also includes Afternic's and Uniregistry's nameservers)
• 25% if your domain is not using our nameservers
• 5% if you bring your own lead with a "buy now" agreement or "make offer"
• 10% if you bring your own lead with "Lease to own" agreement"

 

[dr manos]

That is the scenario where they push VAT on private buyer from EU as well, if you go to scenario where it's EU private seller to US buyer (most common for me), only EU private seller will pay (get deducted) for a vat tax that doesn't exist on other marketplaces.
The TLDR is that private persons should never deal with DAN (as buyers or sellers), just go to Afternic if you want to use Godaddy (for now).

PS. on my ticket they were blaming the support employee for being new (poor person was now the scapegoat) and giving me wrong info (telling me that even as a registered VAT company I would have that deducted from my receivables).
I said: "Do not blame X, the issue is with DAN that did not give clear instructions to the support team after these changes".

VAT is also at sedo but as they assumed the intermediates and not the buyers your company handles the vat with the real buyer with the usual rules:
If your company is in EU, VAT is only for entities in your coutnry and for private persons in EU,all other 0%.
Dan's system seems much more convenient as all the invoices are with DAN as buyers (0% as they are in EU).

 

[DNabc]

@laur77 When you sell to European person, yes, that person will pay extra. But US individuals or companies cannot be charged VAT when buying, so Dan told me that would be deducted from my earnings (and was a lot...).
Paying VAT on commission was already there before July, problem is now paying VAT on full amount (even when private EU sells to US citizen, where there was never VAT involved because VAT is for EU).

 

[DNabc]

I guarantee that Sedo does NOT (and never did) deduct VAT from your earnings if you are a EU individual selling to a US, Chinese, or whoever outside Europe, company or person.

I think there is a lot of confusion here, one person speaks of case A and another speaks of case B. Some also seem to ignore how many buyers and sellers are NOT VAT registered and will be hammered at Dan. Because that doesn't affect EU companies is that ok then? No. Plus, I rather sell to my buyer and not to a middleman, this industry is already full of shady practices. Thanks.

If US or Chinese company pays BIN on Sedo lander of private EU person, total cost to seller is 10%.
If US or Chinese company pays BIN on DAN lander of private EU person, total cost to seller is VAT on full amount (not just commission) + 15%.

 

[dr manos]

Correct. When you sell to European person, yes, that person will pay extra. But US individuals or companies cannot be charged VAT when buying, so Dan told me that would be deducted from my earnings (and was a lot...).
Paying VAT on commission was already there before July, problem is now paying VAT on full amount (even when private EU sells to US citizen, where there was never VAT involved because VAT is for EU consumers).

Yea true, there is no vat deduction at other marketplaces for private sellers.

 

[dr manos]

I guarantee that Sedo does NOT (and never did) deduct VAT from your earnings if you are a EU individual selling to a US, Chinese, or whoever outside Europe, company or person.

I think there is a lot of confusion here, one person speaks of case A and another speak of case B.

yes i misread, thought you have EU Company, sorry, many friends sell as private persons in EU, No vat

 

[Future Sensors]

@DAN.COM I think this thread could use some clarification on your part.

 

[DNabc]

@dr manos I do have EU VAT Registered company, but I'm here advocating for individuals and the massive change this is but we didn't expressly agreed. First was the commission hike, already bad, but this is plain unbearable for EU individual sellers... many simply didn't realize yet, it's been less than a month.

Also, what I told before was that Dan support told me that even with me being EU VAT Registered company I would have VAT deducted from my earnings. I kept replying that was incorrect, it was 0%, and support continued saying I had to pay. That was a mistake they corrected after I canceled the transaction though.

 

[dr manos]

@dr manos I do have EU VAT Registered company, but I'm here advocating for individuals and the massive change this is but we didn't expressly agreed. First was the commission hike, already bad, but this is plain unbearable for EU individual sellers... many simply didn't realize yet, it's been less than a month.

Also, what I told before was that Dan support told me that even with me being EU VAT Registered company I would have VAT deducted from my earnings. I kept replying that was incorrect, it was 0%, and support continued saying I had to pay. That was a mistake they corrected after I canceled the transaction though.

Yea and in case of private sellers God knows where this amount goes.
At least for EU registered like us just copy pasting from the overview pdf the amount and use Dan as buyer, pretty simple and fast, at Sedo i have to search at every sale at transfer documents to find buyer's details and if is in EU without EU VAT number i ask via thread if they have EU VAT as many times are companies that did not put the VAT Number at sedo account etc etc. Also as my accountant sais is so strange to invoice someone who did not pay you eh? DAN seems the correct way

 

[DNabc]

I would find weird if Dan didn't already see this, so I'll leave a concrete case because I too want to see that publicly, not from mail support and then scapegoating them. Plus the number of hours I spent on this for the past week is already absurd and worth many thousands. I do value my time, despite what seems here. The majority of domain sellers didn't start as big volume companies so let's consider them and not only look at our belly button. For a long time I worked without being liable to VAT, at all. I am honest, if it was today I would never buy or sell domains at DAN now and pay VAT for no reason.

Case: Private individual seller (obviously not VAT reg) from Sweden, VAT 25%, sells domain to US company for $1000. How much will seller receive NET if:
a) uses DAN lander.
b) points DNS elsewhere.

Thank you.

 

[Daniel Owens]

I noticed today that all my DAN landers are showing VAT informations like for example:

Show attachment 242698


I was a bit confued because of the VAT law of my country i'm not allowed to charge any VAT.
So i checked the settings in my account which are still set the correct way:

Show attachment 242699

And after that i requested their support about that and they told me something interesting:

[..]Dan is now listed as the Seller on any transaction. Since we are a Dutch company and VAT registered, we charge VAT to relevant EU buyers.

They changed the way they handle sales like afternic do for severel years now.
DAN acts now as the seller. And when you sell a name you sell it to DAN (and they sell it in their name to the buyer).
So it is not about if YOU are in need to charge VAT to a customer anymore. Its about them now and they are a EU company.

I mean, at one view it's okay for me. Now i only have to use one creditor to send invoices to.
The bad thing is that EU customers will now charged with VAT which they were not before (based on your own situation). Hmm..

Did you knew about that? I haven't read anything about it in their last Newsletters.

I do have an understanding of this not being fair but I don't think their is anything that can be done about it.