EU VAT Tax

What is the EU VAT tax?

The European Union recently imposed a tax on many different kinds of digital goods and services. Among other things, it imposes a tax on all EU citizens for eBooks. For more information see: The EU Digital Vat Tax FAQ Page.

Who is a European Union Citizen?

Any citizen of the following countries: Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, The Netherlands, Portugal, Spain, Sweden, and the United Kingdom. As the EU adds more countries in the future, then those citizens would also be liable for this tax.

But the is based in the USA, not the EU. So why do you collect this tax?

The EU's rules say that even eBook sellers based outside the EU have to collect and pay this tax for EU citizens.

How much is the tax rate?

It varies from 15% to 25% depending on which EU country you live in. If you are not in a European Union country, then there is no tax. For specific tax rates see: The EU Digital Vat Tax Rate Table.

How do you know who is an EU citizen?

The country on the credit card billing address is used to make this determination. Back to Top

Do I get charged VAT both when I buy Micropay and again later when I use that Micropay to purchase eBooks?

No, VAT is never charged twice to any funds you deposit. VAT is only charged at credit card transaction time. So, you are charged the VAT when you make your Micropay deposit but not again later when you use that micropay.

This is the correct way to do it because some rebate promotions deposit money into your Micropay account, and no tax is due on purchases made with such rebates because you did not actually pay us that money. VAT is only due on amounts you pay to us; money has to change hands from you to us for VAT to be incurred. Back to Top

If I am an EU citizen and I purchase an eBook that has a 100% Micropay rebate using my credit card, do I get charged VAT?

Yes. Again, VAT is always charged at credit transaction time (or Micropay deposit time if using an intenational money order). You are not charged again when you use the Micropay dollars that result from the rebate, however, so you are only charged on each credit transaction once.

Note that if you buy a physical item that is subject to VAT and has a mail-in rebate you would indeed be charged by the merchant on the full retail price, so this is no different than how rebates and taxes work on physical goods. Back to Top

What if I am an EU citizen and I deposit funds into my Micropay account via international money order?

In this case we will deduct the proper amount based on your country's VAT rate from the money order and deposit the remaining funds into your micropay account. Back to Top

Is VAT charged for Buywise Club membership or Libwise library membership for EU citizens?

Yes. The EU Digital VAT covers a wide range of digital goods as well as services and our understanding is that Buywise Club and Libwise library would fall under those definitions and therefore are subject to the tax. Back to Top