Dynadot

Understanding VAT

Labeled as sales in General Domain Discussion started by D Haynes, Dec 6, 2018 at 7:45 AM.

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  1. D Haynes

    D Haynes Active Member VIP

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    Ok so I recently came to an agreement with a buyer and decided the easiest way to complete the sale would be through GoDaddy.

    The buyer was not very experienced in domain buying and the transfer process so my thinking was that if he creates an account and I drop the BIN price on the premium listing (which took 22 hours to be processed and go live again. 22 hours! It's a few numbers!) he could just click By It Now and everything is handled by GD.

    After the price had finally changed he emailed me a screenshot of the checkout page and GD wanted to charge him 300+ dollars in tax. After looking through their support pages it appears they tried to charge him 21 percent VAT.

    So I guess my question is, is this right? Would the VAT go to me? I'm the one selling the product. GD should charge me 21 percent VAT on the commission they make on the sale as that's the service they're selling and the profit they're making and not collect 21 percent of the whole sale (if that's the case they're making more proffic than they'd need to declare).

    Oh am I just totally confused lol?
     
    Last edited: Dec 6, 2018 at 7:47 AM
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  2. D Haynes

    D Haynes Active Member VIP

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  3. D Haynes

    D Haynes Active Member VIP

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  4. Windoms

    Windoms Established Member

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  5. Joe Styler

    Joe Styler Aftermarket Product Manager GoDaddy Staff Afternic Staff PRO VIP

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    We do not make a profit on it. It is tax. We have to submit it to the European Union if the buyer is in Europe. If they have a VAT ID they can enter it and then they can pay the VAT on their end as it ties to their VAT number which is a tax id number.
     
  6. Joe Styler

    Joe Styler Aftermarket Product Manager GoDaddy Staff Afternic Staff PRO VIP

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  7. D Haynes

    D Haynes Active Member VIP

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    My buyer tried to enter his VAT id but was unable to. I understand that it's tax but what is it tax for and what exactly are you taxing?

    Is it a sales tax (VAT)? You're not selling a product, I am. Your selling the platform for me to sell on which I pay you for by way of a commission. So shouldn't the VAT be 21% of that commission? Maybe I'm way off but I don't understand what the tax is for otherwise.
     
    Last edited: Dec 7, 2018 at 8:45 PM
  8. Hypersot

    Hypersot Active Member VIP

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    As far as I understand how a marketplace works; *they* sell a product you own. It's godaddy's name on the invoice, isn't it?
     
  9. D Haynes

    D Haynes Active Member VIP

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    Sold it through escrow in the end so no lol but I see what you're saying.

    So is it the same when you sell something on eBay or Amazon?

    I'm sure I just don't understand lol but just seems off that they would make $300 dollars proffic from a sale (commission) and charge $330 in tax.
     
  10. Hypersot

    Hypersot Active Member VIP

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    that's actually a good question.

    I've never sold anything on ebay and what I bought always came from legit companies that sold stuff via ebay's marketplace (ie. no individuals) so I wouldn't know.

    If I remember correctly though, what I have bought included an invoice from the company that sold me the product and not from ebay.
     
  11. D Haynes

    D Haynes Active Member VIP

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    That makes sense. When you sell on Sedo (and I think Flippa) you can send the buyer you're own invoice.

    So now GD have paid sales tax (apparently to Europe) dont I still have to charge sales tax as I've still sold something that I'll need to pay an income tax on in my own country?

    If only there was a tax expert here who could explain it in stupid person talk and shut me up lol.
     

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