My experience with Undeveloped.com

[redmaverick]

I bought domain names in the past from top players like Afternic. The process was professional and smooth.

Typically I would make an offer by typing in $xxx and hit the submit button. The sales guy would reach out to me personally and there would be a back and forth and finally we settle down on a price.

Then I would stew on the final price for a while. Only then would I decide to purchase it or not. The whole process typically takes anywhere between a few weeks to months or even years.

Once they have the money in hand via escrow, they would then start the domain transfer process as well. Everything was smooth professional and fair.

I never heard of this company called undeveloped.com and was wondering if any of you heard about it.

I was interested in a certain dot com. I entered $xxx and hit submit to get in touch with their sales team.

The price I submitted was forwarded to the seller and it was accepted by the seller. I get a mail from undeveloped that this is legally binding and that I must pay in 7 days and that there is a VAT tax that was not included and it must be paid too. I thought the price quoted was the final amount. The VAT% was not disclosed upfront either.

I find the whole thing a bit off putting and coercive. I was wondering if this is a normal way of doing business?

This is what the clause says on their page.

6.1 Every bid the User places on a domain name which is placed on the Website is legally binding. A bid cannot be revoked. If this offer is accepted by the Provider, the User is obliged to cooperate in the transfer of the domain name. The provisions of Article 4.5 are explicitly applicable.

 

[DAN.COM]

Should be on the commission only. As the total product price doesn't belong to them. Only the service/brokerage fee applies

I keep reading more assumptions in this thread that aren't true. Where did you guys see or read that undeveloped charges VAT on the total sale price and keeps it? If the seller has to collect VAT by law, we collect the VAT on behalf of the seller and pay it out to the seller.

@stub what you're saying is also incorrect. We don't do that.

I can guarantee anyone in doubt that our accountants know exactly what they're doing and that we're doing it the right way.

The OP posted this thread because he wants to get out of the deal. So far I haven't heard from him since I proposed to contact the seller on his behalf to see if we can fix the situation (undoing the deal) for him.

 

[Name Trader]

I keep reading more assumptions in this thread that aren't true. Where did you guys see or read that undeveloped charges VAT on the total sale price and keeps it? If the seller has to collect VAT by law, we collect the VAT on behalf of the seller and pay it out to the seller.

@stub what you're saying is also incorrect. We don't do that.

I can guarantee anyone in doubt that our accountants know exactly what they're doing and that we're doing it the right way.

The OP posted this thread because he wants to get out of the deal. So far I haven't heard from him since I proposed to contact the seller on his behalf to see if we can fix the situation (undoing the deal) for him.

Can you please get your accountants on here to explain what they are doing "the right way". Because it's sounds as confusing as hell to me.

So you are not charging VAT on your services to sellers (your 15%) who are within European Community? That seems weird to me unless your commission in not VATable? Or is it included within the 15%? And if it's included in the 15%, there should be a discount when the seller is outside the European Community.

Are you only charging European VAT on the sales price, to the buyer when the seller and buyer are in the European Community? What if the buyer and seller are in Australia (or somewhere else with VAT). What is charged in those cases. As has been said already. Prices quoted by sellers should include the respective VAT. IMHO. It's the sellers responsibility to account for the VAT on sales to the respective VAT authority.

 

[Ricardo M]

As a seller i always paid on multiple platforma

I keep reading more assumptions in this thread that aren't true. Where did you guys see or read that undeveloped charges VAT on the total sale price and keeps it? If the seller has to collect VAT by law, we collect the VAT on behalf of the seller and pay it out to the seller.

@stub what you're saying is also incorrect. We don't do that.

I can guarantee anyone in doubt that our accountants know exactly what they're doing and that we're doing it the right way.

The OP posted this thread because he wants to get out of the deal. So far I haven't heard from him since I proposed to contact the seller on his behalf to see if we can fix the situation (undoing the deal) for him.

I didn't assume it i just explained how dutch VAT works. I have also all my domains listed with Undeveloped and so far i don't have issues

 

[Name Trader]

As a seller i always paid on multiple platforma


I didn't assume it i just explained how dutch VAT works. I have also all my domains listed with Undeveloped and so far i don't have issues

OK. Can you please explain whether or not you are being charged VAT on Undeveloped commissions? And if not. Why not? And do Undeveloped add VAT to the sales price for all your EC sales only. And are you paying those VAT collected to the VAT authorities in Nederlands? Or pocketing it?

 

[DAN.COM]

OK. Can you please explain whether or not you are being charged VAT on Undeveloped commissions? And if not. Why not? And do Undeveloped add VAT to the sales price for all your EC sales only. And are you paying those VAT collected to the VAT authorities in Nederlands? Or pocketing it?

Hi Stub,

The VAT system we have to work with is complex, too complex if you ask me. So I understand the questions you guys have but try to not change the question topic after each answer.

I'll try to explain how it works but it's complex so bare with me:

A: Seller is based outside of EU and is a business seller = We never charge or show VAT on the purchase price

B: Seller is based outside of EU and is a non-business seller = We never charge or show VAT on the purchase price

C: Seller is based in EU and is a business seller = 1: if buyer is a business with a valid VAT number from EU there's no VAT added / 2: if buyer is from EU and a non-business buyer = we charge the VAT of the business seller and the seller gets the VAT / 3: if buyer is not from EU no VAT is charged on behalf of the seller / 4: if seller sells to a buyer from their own country the local VAT is charged on the purchase price

D: Seller is based in EU and is a non-business seller: We never charge or show VAT on the purchase price.

Now for Undeveloped's commission:

A: Undeveloped is an EU based business seller = 1: if seller is based in EU and a business seller no VAT is added to the commission / 2: if seller is based in EU and a non-business seller we charge the local VAT rate of the seller / 3: if the seller is based outside of EU no VAT is charged / 4: if the seller is based in the Netherlands there's always VAT added to the commission

To conclude, we only charge VAT where legally obliged by law. Since we do the invoicing for all our sellers (part of being a full-service marketplace that takes care of all hassle for you) we collect the VAT if applicable and forward it to the seller when we send a payout.

Again, everything we do is verified and validated by our accountant, we process hundreds of transactions a month without a single issue so be assured that we're doing it correctly.

Kind regards,

Reza

 

[Ricardo M]

*Message removed*

 

[Ricardo M]

OK. Can you please explain whether or not you are being charged VAT on Undeveloped commissions? And if not. Why not? And do Undeveloped add VAT to the sales price for all your EC sales only. And are you paying those VAT collected to the VAT authorities in Nederlands? Or pocketing it?

We wish we could pocket it haha. But Undeveloped is correct. It is complex but handled as per Dutch law. The government loveeessss taxes here so as a company you can't play with it or the feds will take your administration. For multinationals we can be a paradise if you guide the taxes correctly through the state. As a Dutch based company you can't fool the system. If i sell a domain under a company name i have to add 21% as a digital product.

 

[Ricardo M]

Reza @Undeveloped

Thanks for the quick answers. It's good to stay involved with the members to keep the lines tight. Nobody brings Undeveloped down but some things had to be clarified before fairytales got shot into the world.

@stub

I'm Dutch an operate from The Netherlands so yes i have to pay VAT once i pay commission to Undeveloped. It's the same as i would use a real estate broker or laywer for their services. Prices legally have to be mentioned exc VAT 21%.

 

[keltron72]

Thanks for keeping us updated Underdeveloped- But I'd have to strongly disagree. VAT calculations/ payments/ collections are really not that complicated at all. And they shouldn't be exaggerated. Nor contradictory. VAT is easily understood and therefore, just as easily taken advantage of- (Not that I am in anyway accusing you of doing so)! But you leave a lot of ambiguity in your answers. So just to confirm, during your last statement, "The Conclusion" you state that you "only charge VAT where legally obliged by law. Since we do the invoicing for all our sellers (part of being a full-service marketplace that takes care of all hassle for you) we collect the VAT if applicable and forward it to the seller when we send a payout." This statement (whilst an impressive selling point to sellers) still leaves me concerned due to the ambiguity there- who is charged the VAT? And when are they notified of this additional charge? Is it before or after their "Legally binding offer" has been made and accepted? Because this stance almost seems to contradict your earlier points of VAT collection due to geographical locations and business status? Which is especially concerning, since on top of that, you wrote: "The final calculation will be done after the buyer has completed the first step because we have the buyers invoice details at that step". So to me this implies that there could be a possible price increase for the Buyer, depending on your "final calculation"? So will your "final calculation" be made after an offer is deemed "legally binding"?

Because that is what strikes me as unusual. I am more than aware of the changing vat % due to circumstance, location, business status, etc, but for a buyer/ bidder to be stuck with an additional 15-20+% VAT charge, and only notified at checkout, after a "legally binding offer" is made, baffles me. Surely if this is the case, something can be done to reassure a bidder/ buyer of the prices and potential Taxes upfront?

 

[DAN.COM]

Thanks for keeping us updated Underdeveloped- But I'd have to strongly disagree. VAT calculations/ payments/ collections are really not that complicated at all. And they shouldn't be exaggerated. Nor contradictory. VAT is easily understood and therefore, just as easily taken advantage of- (Not that I am in anyway accusing you of doing so)! But you leave a lot of ambiguity in your answers. So just to confirm, during your last statement, "The Conclusion" you state that you "only charge VAT where legally obliged by law. Since we do the invoicing for all our sellers (part of being a full-service marketplace that takes care of all hassle for you) we collect the VAT if applicable and forward it to the seller when we send a payout." This statement (whilst an impressive selling point to sellers) still leaves me concerned due to the ambiguity there- who is charged the VAT? And when are they notified of this additional charge? Is it before or after their "Legally binding offer" has been made and accepted? Because this stance almost seems to contradict your earlier points of VAT collection due to geographical locations and business status? Which is especially concerning, since on top of that, you wrote: "The final calculation will be done after the buyer has completed the first step because we have the buyers invoice details at that step". So to me this implies that there could be a possible price increase for the Buyer, depending on your "final calculation"? So will your "final calculation" be made after an offer is deemed "legally binding"?

Because that is what strikes me as unusual. I am more than aware of the changing vat % due to circumstance, location, business status, etc, but for a buyer/ bidder to be stuck with an additional 15-20+% VAT charge, and only notified at checkout, after a "legally binding offer" is made, baffles me. Surely if this is the case, something can be done to reassure a bidder/ buyer of the prices and potential Taxes upfront?

Have you ever tried buying a domain via Undeveloped?

 

[keltron72]

Have you ever tried buying a domain via Undeveloped?

Not yet, and I have heard good things. But ambiguity in any TOS/ contract scares me! Despite a companies reputation.
I know we're probably not all seeing the whole picture from the OP- and i'm definitely not taking sides on this. But the ambiguity and potential for a price increase after a "legally binding offer" is made is extremely off putting to me. Especially when we're talking £xxxx figures and above.

 

[DAN.COM]

Not yet, and I have heard good things. But ambiguity in any TOS/ contract scares me! Despite a companies reputation.
I know we're probably not all seeing the whole picture from the OP- and i'm definitely not taking sides on this. But the ambiguity and potential for a price increase after a "legally binding offer" is made is extremely off putting to me. Especially when we're talking £xxxx figures and above.

That's why I asked that question. I can't recognize the processes that the OP has experienced. There's zero incentive from our perspective to build in any processes that hurt sales or conversions. The process for users is pretty well designed and there are no tricks or strange terms in our TOS either.

As you can see above, it's impossible to miss that offers are legally binding so there's really no ambiguity created by us.

The buyer control center we designed is also something you should test and see for yourself. It's really neat and frictionless.

Hope this helps,

Reza

 

[keltron72]

T

That's why I asked that question. I can't recognize the processes that the OP has experienced. There's zero incentive from our perspective to build in any processes that hurt sales or conversions. The process for users is pretty well designed and there are no tricks or strange terms in our TOS either.
Show attachment 82971

As you can see above, it's impossible to miss that offers are legally binding so there's really no ambiguity created by us.

The buyer control center we designed is also something you should test and see for yourself. It's really neat and frictionless.

Hope this helps,

Reza

Thanks for you reply Reza. Having had a quick look at your platform and a skim through your tos- I do agree with the majority of what you are saying, and from what I can perceive, there seems to be no intentional misleading in your system. (Which is also backed up by your furvent, informative and helpful replies on this public forum..

However, saying that, the ambiguity I mentioned actually lies within the VAT/ or ‘after sale tax’ itself, not the “legally binding bid”. I know that the vat % varies on geolocation, business status, an various other criteria.. But the ambiguity of who pays this VAT and at what time they are informed that they have to pay this VAT is confusing to me?

Again, I’m mainly going by the OP’s original statement- which you’ve since refuted.. But your system still seems pretty unclear- especially for anyone who hasn’t yet tried to checkout- to see how it actually works.. because I’d be pretty upset to bid £xxxx and then have an addition £xxx added to it after a non negotiable checkout.

I totally understand, and appreciate a legally binding bid (i prefer it- it saves a lot of hassle & time wasting) but this legally binding bid must include or at least mention the possible vat % that will potentially be added.

 

[DAN.COM]

T


Thanks for you reply Reza. Having had a quick look at your platform and a skim through your tos- I do agree with the majority of what you are saying, and from what I can perceive, there seems to be no intentional misleading in your system. (Which is also backed up by your furvent, informative and helpful replies on this public forum..

However, saying that, the ambiguity I mentioned actually lies within the VAT/ or ‘after sale tax’ itself, not the “legally binding bid”. I know that the vat % varies on geolocation, business status, an various other criteria.. But the ambiguity of who pays this VAT and at what time they are informed that they have to pay this VAT is confusing to me?

Again, I’m mainly going by the OP’s original statement- which you’ve since refuted.. But your system still seems pretty unclear- especially for anyone who hasn’t yet tried to checkout- to see how it actually works.. because I’d be pretty upset to bid £xxxx and then have an addition £xxx added to it after a non negotiable checkout.

I totally understand, and appreciate a legally binding bid (i prefer it- it saves a lot of hassle & time wasting) but this legally binding bid must include or at least mention the possible vat % that will potentially be added.

Thanks for the reply.

"But this legally binding bid must include or at least mention the possible vat % that will potentially be added." It does. We mention this (when VAT is likely applicable) multiple times in the process.

It starts on the for sale page itself, when you confirm your offer, in all e-mails it's stated clearly that offers are excluding VAT.

See the screenshot below for example. Based on the information of the seller and my IP address I'm already on the for sale page itself seeing that there will be 0% VAT added.

And when you click on Learn More, you'll even see the following explanation about that section:

What is VAT?
The Value Added Tax (VAT) is a consumption tax applied in the European Union (EU) to all goods and services.

Who has to pay VAT?

• All consumers in the EU are charged VAT on the purchase of goods and services.
• Businesses in the EU buying from a business in the same country are also charged VAT.
• Businesses in the EU buying from a business in a different EU country are not charged VAT.
• Consumers and businesses outside of the European Union are not charged VAT.

Are there exceptions?

• You will not be charged VAT if the seller is a consumer.
• You will not be charged VAT if the seller is a business outside of the European Union.

Is your VAT calculation wrong?
The VAT rate provided on this page is only an estimation. It will be corrected during the checkout process after entering your billing details.

Like I said, we really make it all very clear. Maybe the OP used another marketplace because I can't spot the ambiguity

 

[keltron72]

I definitely see where you are coming from Undeveloped.. Although, without me personally going through the final bid and checkout process, I really can't judge much further. But upon investigation of your tos, forum replies, and my own limited experience with your platform, as well as re-reading the OP's original post. I have to say that I definitely see nothing untoward going on! So I would like to re-state my original belief and interpretation of you/ your company as being respectable, Legal, and honest!!

However, with that being said, I still haven't yet checked out using your platform, so ultimately I cannot confirm this 100%.... Although, with all your explanations, provided evidence, TOS quotes and a lack of response or backup for the OP- I cant see there being any serious issues?

I really do appreciate you addressing the concerns I had about your TOS/ sales Tax/ VAT ambiguity (as I saw it). And Kudos for you poignantly stating your rebuttal- I really hope this thread didn't and doesn't affect you or your business in any negative way!

> Originally, I was just alarmed at the OP's suggestion that a buyer would be surprised with a surplus VAT tax upon final checkout- after a bid has been accepted and deemed legally binding? (Although This has now been proven to be inaccurate)- And the OP nor anyone else has shown any evidence to counter this..

So thank you for your detailed responses Undeveloped. You can only gain respect from replying to these posts- it's always better to quash any rumors before they take hold..

Cheers. And good luck with business!

 

[Name Trader]

@Undeveloped - So that wasn't so hard to explain. I appreciate your detailed explanation, Reza. I just have a couple of questions. If you don't mind.

1. What is the definition of a business seller/buyer and a non-business seller/buyer? Is it: a business seller/buyer is registered for VAT and has a VAT identification number? A non-business seller/buyer is not registered for VAT and has no VAT identification number?

2. I cannot get my head fully around C. You don't add VAT when both parties are in EC and are business sellers/buyers, but do add VAT if they are both in EC and buyer is a non-business buyer? I don't understand why these are treated differently? In both cases buyer and seller are in EC but the sale is not VATable if they are both business sellers/buyers? It's only VATable for the poor non-business buyer? That doesn't make much sense to me. Maybe I'm missing something.

3. 2 above also applies to your Commissions?

4. How (and why) is the way you operate any different to GoDaddy, Afternic, Sedo etc? Who don't seem to care about VAT consequences.

I would suggest that any non-business buyer in EC should be very wary to buy domains owned by EC citizens or corporations because they will be charged VAT (usually 20%+) on top of their agreed selling price. I think every domain owned by a business seller EU citizen or corporation should be flagged somehow to notify non-business buyers from EC that the price agreed, does not include the VAT, which will be charged. Which again, would not be required, if prices included the VAT.

5. And just on something you said in another post. About only knowing the full price including VAT when checking out. I think you should probably track, if you don't already, the status (business or non-business) of all EC buyers and sellers. That way, when communicating with buyers, you can talk about the VAT inclusive price, where applicable. Rather than asking the buyer to go to checkout. (Not just EC buyers and sellers but also when buyers and sellers are from the same VAT authority).

 

[Name Trader]

@Undeveloped - For me personally, I am very unlikely to ever be charged VAT on a domain sold to me by Undeveloped. But I sure would want to know at the time I'm making my legally binding bid what the total price is going to be. My bid price plus some mumbo jumbo about VAT isn't acceptable. If my bid is for $10,000, (and I'm unlikely to be thinking about any VAT liability at that point) and there is a 21% VAT liability. I expect to know my final price is going to be $12,100 when I'm committing to a legally binding bid. And for sure I expect not to have to go to checkout to find my bid of $10,000 is binding me to a purchase for $12,100.

Making all bids inclusive of VAT (if applicable) seems to be a very neat way around this problem. IMHO.

 

[keltron72]

@stub
Unfortunately, the VAT laws are seriously unfair to the average non business buyer in the EU. It's generally the poor consumer at the end of the line who ends up paying the VAT bill, with no way to reclaim it! It's basically a consumption tax. And that's because the answer to your question below is Yes.

. What is the definition of a business seller/buyer and a non-business seller/buyer? Is it: a business seller/buyer is registered for VAT and has a VAT identification number? A non-business seller/buyer is not registered for VAT and has no VAT identification number?

Yes. Consumers, and non registered business' do not have VAT identification numbers. So no VAT reclaim available : ( which also answers your second question- unfortunately! Because it is extremely unfair! It really is a kind of hidden/ covered up consumption tax for the poor average consumer.

5. And just on something you said in another post. About only knowing the full price including VAT when checking out. I think you should probably track, if you don't already, the status (business or non-business) of all EC buyers and sellers. That way, when communicating with buyers, you can talk about the VAT inclusive price, where applicable. Rather than asking the buyer to go to checkout. (Not just EC buyers and sellers but also when buyers and sellers are from the same VAT authority).

This was one of my main issues that got me involved in this thread.. And although I thought it was answered above, without checking out myself I cannot see if this is actually what occurs? I took undeveloped word that it was all calculated before any 'legally binding bid' was made. But if this is actually not the case, then this is something that should definitely be rectified! And a direct answer on this would be very much appreciated.

Also @stub - I wasn't trying to answer for Undeveloped at all- I was just adding what I've found out so far myself.
So I'd still definitely like to hear the response from @Undeveloped, especially to the questions left unanswered- as well as the ultimate- When is VAT shown to the Buyer? Before or after a legally binding bid?

 

[sobeman88]

Any tax that is to be paid is solely in the hands of the seller or person receiving money. This has been my experience! It has nothing to do with the site! Like EBay for example. You don’t pay taxes on EBay. It is YOUR job to report your income and pay the taxes if you choose to do so. Just to inform everyone

 

[sobeman88]

If you are in Europe, then you should know the laws and regulations and know you are paying more for something lol. It’s an obvious thing. I am from the US and I know my laws. You should know about your VAT laws and not complain to Undeveloped and feel surprised!