eBay VAT status changes in the EU

eBay are to change their VAT status in Europe with the establishment of a new company located in Luxembourg, called eBay Europe, S.Ã r.l. From March 1st all European eBayers will have their contracts moved from eBay International AG in Bern, Switzerland to eBay Europe, S.Ã r.l.

This change won’t affect most eBayers – the total fees charged will remain the same (Although eBay have just REDUCED fees, again effective March 1st).

The main difference will be to VAT registered business sellers who have applied to pay eBay fees net of VAT. In this case previously sellers were charged fees net of VAT, effectively in the UK with 17.5% VAT a 14.89% discount. This will change to 15% VAT (the rate effective in Luxembourg) effectively a 13.04% discount. The net change for the UK is a loss of 1.85%

Other European countries will be affected somewhat differently – for instance France with 19.6% TVA will have a greater change with a net loss of 3.35%.

It is important to remember that gross eBay fees as per the published tariff will not change, the only sellers affected will be business sellers who have registered their VAT number with eBay for VAT exemption. Although increases in costs are never welcome we would expect most sellers will probably cease to notice the change after a month or so.

Finally if you have been claiming VAT back yourself from the tax authorities from 1 March 2007 this will no longer be possible. The only way to pay eBay selling fees net of VAT will be by registering your VAT number with eBay.

4 Responses on "eBay VAT status changes in the EU"

1. 1
   TameBay » Blog Archive » eBay move costs Treasury £25m says:

   February 6, 2007 at 5:14 pm

   [...] The Telegraph reports eBay’s move to Luxembourg will cost the UK Treasury £25m a year in lost VAT revenue. [...]
2. 2
   Andrew Titcombe says:

   May 8, 2007 at 6:34 am

   The Treasury can afford £25m – especially as it is ‘our’ money!
   BUT
   Never mind the decreased listing fees WHAT about the increased commission charges. NOW that is something that will cost us real money
3. 3
   Luxembourg votes to keep eBay tax low : TameBay says:

   June 7, 2007 at 11:22 am

   [...] What does it mean for eBayers? Well for non-VAT registered sellers there is no change, you still pay the same total fees regardless of the VAT rates. For VAT registered sellers in the UK the difference is would have been a 1.85% net change in costs in their favour. [...]
4. 4
   SIF in Core debacle still troubles eBay : TameBay says:

   July 18, 2007 at 11:46 pm

   [...] The message from eBay Q2 2007 Investment Conference Call is that numbers up great, business is up (at least closing rates for sellers are, listings are down but that’s ok). We’ve got cash in the bank, we’re generating cash, everything is great. Top management is stronger than it’s ever been and they know what direction they’re driving the eBay businesses in for the future. The titbit hidden away that made me smile was Geographic tax savings, I guess that’s “Thank you Luxembourg (and an encore)”. [...]