VAT tax on payments coming from a US based network?

Scapestrato

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Hey folks,

anybody has experience about this? From next month I'm starting receiving payments from Fullscreen to my company based in Bulgaria (so VAT subject territory), and at the moment I'm not sure if this kind of payment is VAT exempt or not.

If it's the second case, it means there's a 20% tax on the amount received to be paid to the government, and if Fullscreen doesn't cover that, it means I should pay for that, which means I would lose an additional 20% on my income on top of the 5% Fullscreen already takes and, of course, the Bulgarian company taxation (which thank God is among the lowest in entire Europe).

In Fullscreen contract it says ""If you reside in a territory where VAT applies, our payment to you may include VAT if appropriate and/or your payment may be subject to a VAT invoice", which I don't understand if it means that they will cover the VAT payment if you send them an invoice or if that simply means that VAT is already included in the payment they send out and they are not going to add a nickel to that.

When I asked my FS manager about this, she replied she asked the accounting team and the reply was "Whatever is taken from your earnings regarding fees and bank taxes won't be under our control". Which makes me think they didn't even understand the question as VAT has nothing to do with fees and bank taxes. Nevertheless, the feeling I got from this generic and evasive answer is that they won't pay for VAT (which would be another reason to leave them when my contract runs out).

On Monday I will be speaking to my accountant about this, in the meantime would be great to know if anybody has experience with this issue as to understand what the general consensus is.

Thanks in advance!
 

BigHead

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It is a weird one, people get tax and people dont, i dont get tax with TGN and im in england so i dont quite understand the whole TAX thing either, i know freedom you wont get tax at all. As there exempt from it.
 
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Shane

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To my knowledge in this case they would not.

If they send you payments from a company based in the EU / EC Zone (I don't think they do? Fullscreen LLC is based in California) then there's only two cases in which they would have to pay VAT too.

1) They do send you the payments from a EU incorporated company (As I said, I think all their business is done through a company registered in CA) and you have not given them your company VAT no.
2) They do send you the payments from a EU incorporated company and that company is registered in the same country as your own company is registered in.

Like for example, my company is Irish, so when we get paid by Google (Google Ireland Ltd.) who are based in the same country as us like stated in 2) we get paid the earned revenue + VAT.
 
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Scapestrato

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To my knowledge in this case they would not.

If they send you payments from a company based in the EU / EC Zone (I don't think they do? Fullscreen LLC is based in California) then there's only two cases in which they would have to pay VAT too.

1) They do send you the payments from a EU incorporated company (As I said, I think all their business is done through a company registered in CA) and you have not given them your company VAT no.
2) They do send you the payments from a EU incorporated company and that company is registered in the same country as your own company is registered in.

Like for example, my company is Irish, so when we get paid by Google (Google Ireland Ltd.) who are based in the same country as us like stated in 2) we get paid the earned revenue + VAT.
You are correct, they send payments from California.

While I was searching Google on the subject, I found this thread from this very forum:
[for some odd reason I can't post a link to this very forum, but if you go in google and look for "yttalk do we youtubers need to pay vat" it's the first result coming up]

So it seems the general consensus is that the invoice for US based networks payments should be VAT exempt, am I correct?

And on a different note, @Shane, do you run a private network just for your own channels or are you also recruiting other people channels?
 

Scapestrato

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Hey guys,

just wanted to add that I spoke with my accountant about all this and she confirmed that in my case the VAT is not applicable to earnings coming from US based Youtube networks.

Hope this helps anybody in a similar situation :)

Cheers!