VAT tax charges for non-euro users

[sjsh]

I have purchased online 4 TomTom software updates, Maps for Australia and Speed Cameras. When making my last purchase I noticed that VAT was being charged. VAT is a charge that is only to be levied when the purchaser lives in the Euro zone. I contacted TomTom and they have replied that a scanned copy of a utility bill in my name or the biodata page from my passport will enable a refund of this tax. As no one enjoys taxes, especially erroneous ones, this info may be of use to all TomTom subscribers outside the Eurozone!

 

[go930user]

I have a similar beef, and contacted TT CC over a week ago about this - so far I have not had a reply which answers the question, but had communication in the form of an apology that my question had not yet been answered - go figure

In any event, in my case residential information was captured at the time of purchase so that credit card details could be verified. If this isn't enough to identify a place of residence then I'm not sure what might be.
But this is all moot, because the test of whether or not VAT is applied is gauged on the basis of where the goods are delivered. And if it is outside the EU then I am reasonably confident that VAT is not to be levied.

TTs software should be organised so that delivery of these (quite) costly software updates do not get VAT charged when the data stream is going to a country other than an EU member state. If Amazon UK can do this for goods shipped outside the EU then there is no reason (other than the "nice" windfall TT gets) that TT can not conduct their business in a similar manner.

And the biodata page in my passport does not identify a place of rersidence. More importantly why should TT capture this sensitive data to provide a refund of a tax that ought not have been charged in the first place? I could easily be an Australian who is living permenently in an EU member state, in which case VAT would be quite legal.

I'd be interested in knowing if the OP had received a refund of VAT charged, or if, when the information is provided further requests for clarification of eligibility was requested.

Thanks for the heads up SJSH

Cheers

Go930 User

 

[Rogriv]

Non-EU users charged Dutch VAT

I have had this experience three times with TomTom. The first time I complained, they refunded not only the VAT, but the whole sum! The second time, they asked for a photocopy of my driving licence 'to prove that I was in Australia'. I sent one, although commenting that I thought that buying maps of Australia with an Australian VISA card should be sufficient proof. There was no refund. The third time I didn't bother, as it was a very small sum. The point is, millions of euros must be pouring improperly into Dutch government coffers. I strongly urge ex-EU customers to demand that VAT not be levied on their TomTom purchases. Here, taken from an Amazon UK invoice is the reason why VAT should not be levied: "VAT exemption for deliveries of goods outside EU - Article 146.1.a of Directive 2006/112/EC". I buy frequently from Amazon UK, France and Germany and VAT is always deducted. Don't let them get away with it!

 

[sjsh]

TomTom, while still currently the best non-metro product for Australia together with a nice update mechanism on its newer Live models, is a company that is TOTALLY eurozone centric ("euroist") to deal with (am unsure if they realise the world extends far beyond their euro home base!). All I can say is go buy your next TT Live product from the best/cheapest Australian vendor you can find and hopefully you will only have to deal with TT when your first year Live sub expires..but after that year it will be back to dealing with the "eurorist" TT online crowd with their freakin auto VAT charging ways! Can you imagine the loss of sales that will be incurred by Australian businesses if that loon of Prime Minister we are lumbered with at the moment goes ahead with her stupid "tax all online purchases" idea! (Will no one rid us of that meddlesome woman!)

 

[canderson]

That'll teach 'em about voting Labor!

Meanwhile, you can read it to them chapter and verse here (see attachment of PDF within ZIP):

 

[Rogriv]

Non-EU users charged Dutch VAT

Thanks for finding that! I've waded through the bits which seem relevant. Anyway, if Amazon leaves the tax off, so should TomTom. I don't pay US taxes on items bought from www.amazon.com, either.

The TomTom customer support is in the UK, so it can't be a language difficulty stopping them from fixing the problem.

 

[go930user]

Can you imagine the loss of sales that will be incurred by Australian businesses if that loon of Prime Minister we are lumbered with at the moment goes ahead with her stupid "tax all online purchases" idea! (Will no one rid us of that meddlesome woman!)

Well...

Whilst not wishing to defend any politician, especially those of them who have no idea about the dictionary meaning of "promise" (Which is probably the vast majority of ALL of them), I thought this idea had received a resounding No decision by the Federal government on the basis that it would cost of the order of $Au100 to process each item that would be eligible for GST (read VAT) when imported, irrespective of the value of the tax.

This is why the threshold is set at $Au1000 as the 10% GST on this level equals $Au100 and is the 'Break even" point.

The major proponent of the idea, if I recall accurately was a retail franchiser. This guy started his business activities as a retailer, but on the basis of success in the Oz retail market, started franchising his name to others to use and switched to becomming an importer/wholesaler to the franchisees using his name on their storefronts.

A few other reatilers climbed on the bandwagon, and it took a few months for the storm in a teacup to die down.

I now see that some of those lending their voices to the GST tax on private overseas purchases have set up off shore businesses to tap into this market. The common product seems to be software - I wonder why?

I wonder how the franchisees, who retail market the same products, to which the GST applies, and is added at the point of sale, feel about that?

And if we are pointing fingers at politicians, we ought not forget that Oz GST was implemented by a PM from the opposite side of politics, after promising that it would not happen.

All tarred with the same brush, IMHO.

Apologies for the digression - I'm investigating an alternative method that might get TT to clean up their act in regard to improperly applied VAT on product delivered outside the EEC.

As they say - watch this space.

Cheers

GGo930user

 

[Rogriv]

Non-EU users charged Dutch VAT

I shall be watching this space very carefully indeed! I want to get the map update, but I really don't feel inclined to pay any more tax to the Dutch government. They must have acquired quite a tidy sum over the years. Could upset their budget estimates if the source dries up!

 

[canderson]

Surely the bureaucrats in Belgium can find some way to enforce 2006/112/EC with a little prodding by those impacted by the inappropriate application of VAT. They love this sort of micromanagement exercise!

 

[Rogriv]

I would have thought that the buffoons of Brussels would not want to slow down the flood of cash, given the horrendous cost of the bureaucracy here and in Strasbourg.

 

[Rogriv]

P.S. I'm glad to see that you don't use WD-40! There's an Australian product called 'Inox' which I find much superior. No, I have no connection with the company!
Sorry about the non-TT comment.

 

[canderson]

I'm sure they enjoy the cash, but they can also get very touchy about non-compliance with their sacred directives.

 

[go930user]

And we are not talking small amounts of money here.

If the VAT on an annual map upgrade is (say) 10 euro (which is 20% of a 50 euro value approx) and TT has a user base of 0.1% of the world population and of those 5% do map upgrades and are outside the EEC then the collected moneys are 14 million euros (I think) across 4 years.

Now in national government terms this may not be a large amount, but as my Canadian cousin would say, it's a "good chunk of change".

And I'm not sure that the assumption that it gets remitted to the Netherlands Government is valid, since by EEC directive (and international agreements) the Netherlands government probably isn't entitled to the money. It could get very embarrassing indeed for the government if they have received it.

If TT just keeps records of those transactions delivered outside the EEC they would only then have to remit the VAT collected for the transactions delivered inside the EEC area.

If I'm correct, I wonder where that money has ended up?

Cheers

Go930user

 

[Rogriv]

I did wonder vaguely about that. Either way, it's more than high time that non-EU customers were treated honourably in this matter.

 

[go930user]

Hi all,

An update on this VAT question.

I used a Netherlands Government "General Enquiries" web page to ask a general question about about VAT being charged on goods sent outside the EEC. The reply did not answer the question, but did offer a snail mail address. I copied my question to this address. Today I received an e-mail response asking for further details ie Name of Company and VAT number. My enquiry did not identify TT either by name or details that might be tracable to them.

I have a feeling about the reason for asking for this information - and I'm uneasy about it.

I can respond with the details asked for ( simply by providing a copy of the PDF invoice TT sent to me after the purchase.), but I'm reluctant to do this without canvassing opinion.

As I see it, the problem is twofold: Firstly that the Euro Zone is in diabolical trouble financially and any rules that might get in the way of a national government seeking monies that have been collected as VAT from an overseas strong currency area but not remitted might simply be ignored - but generate a nasty court case. Secondly, a sudden claim on TT for such monies could be financially embarrassing for them to the point of making them less than viable. In this event the user base of their product will be disdvantaged whilst the mess is sorted out.

Over to you - the moderators might care to escalate this to a more prominent position.

Cheers

Go930user

 

[canderson]

Because this problem is not new, and it bothers me that it keeps coming up with no apparent resolution, it's already been "escalated" in that it has been brought to the attention of personnel at TomTom's NL offices, and I suspect this thread has already been read by several at TomTom by now. They will no doubt appreciate your consideration of their dilemma before replying to the email you just received.

I will assure you that I will be watching this closely. If TomTom replies to the inquiries that have been made on this issue, we will specifically ask for comments that can be shared with users here and similar venues. I'd say we should give their legal department a little time to chew on this, but I think they understand that the topic is out in the open, and that eventually, a reply will be necessary.

I'll keep you posted, but why not hang on a bit to see what comes of it from their end? In the event that they missed your post, I'll point it out to them and remind them that you're being a pretty good sport about this so far.

 

[Rogriv]

TomTom doesn't seem to be straining at the leash, either to return the millions in VAT or to supply information about what they intend doing. Plainly, the only legal thing, never mind the honourable bit, is to return the money to the customers. If they don't, presuming that it was in fact passed to the government, it's up to the Netherlands government to do the right and proper thing. I'd like to get the new map of Australia, but I'm disinclined to contribute any more VAT.

 

[canderson]

We've noted elsewhere that while it takes 6~8 weeks, they credit the VAT to cards of customers outside the EU when called on this. Why they must be prompted to do so is a mystery. The question of where the money is going is still unanswered as far as I know.

 

[Rogriv]

Well, as VAT is the exclusive preserve of the government of the country, one can only hope that it's ended up in Dutch state coffers. If not, there'll be the devil to pay. There's an absolutely huge sum involved by now.

 

[canderson]

There should be the devil to pay in any case. TomTom should be breaking down EU (VAT qualified) sales vs. other sales in their accounting in order to correctly determine their tax liability back to the NL govt, REGARDLESS of how much they have actually collected!