Should we separate or include VAT to price?

[Igor]

I need to know your opinion on question with VAT (Value Added Tax). Please leave your comment or participate in voting.

We announce prices for PicturesToExe without VAT on our website. But there is a remark: "Prices do not include VAT when applicable" on the order page. Before a customer enters his credit card details he can see final price with VAT. The problem in fact that some countries take VAT (EU) and some don't (USA) for software products over Internet. Should we separate VAT (as we do now) or include VAT into price of the product (increasing this price on our website)?

Example 1. Separated VAT.

Announced price on website = 75$

Final price for the user (when VAT is applicable) = 88$

Final price for the user (when NO VAT) = 75$

Example 2. Price includes VAT.

Announced price on website = 88$

Final price for the user (when VAT is applicable) = 88$

Final price for the user (when NO VAT) = 75$ (I think so, but I didn't check, because I'm not from EU country)

[fh1805]

Igor,

As you are already aware, some countries charge a tax and some don't. And even those that do charge a tax don't apply the same rate. Therefore my thoughts would be to continue showing the VAT separately. It will be interesting to hear the views of those who are already well-established in the "web commerce" arena, e.g. Barry Beckham, TheDom, Ron West etc.

regards,

Peter

[xahu34]

Igor,

In the EU (27 member states) we have tax rates between 15% and 25%. Thus, a price including VAT can only be made on a per-country base, perhaps not very reasonable. I would like to recommend that you offer your product without VAT, while indicating this fact on your website more clearly than it is done at present time (The remark "Prices do not include VAT when applicable" can easily be missed (in my opinion)).

Regards,

Xaver

[Gérard de Lux]

Same opinion as Peter and Xaver; there are too many different VAT rates in the EU, and in other countries it's not called VAT but some other names with again different rates.

And, as Xaver said, the fact that the price doesn't include VAT or other sales tax should be made much clearer on the website.

[Cèlou]

Goodnight Igor

Just like the first 3 players, I agree with them.

Taxes differs from one country to another and I think that to turn everything upside down, will be confusing to many.

So I think it is best to continue to do as you did.

[Conflow]

Igor,

Following up on the replies from Peter,Xaver and Gerald your 'International-Users' may not be aware that a

Trade-Agreement exists between the U.S and the E.U in relation to Credit-Cards and Pay-Pal payments etc;

In that 95% of U.S Software-Sales into Europe are subject to addition Vat-charges on top of the purchase

price of the Software. These Vat-charges are administered by the vast majority of Credit-Card vendors and

by Pay-Pay at the 'point of entry' into each E.U Country at their respective Vat-rate.

I'm afraid there is no 'get-out' of the Vat-charges within the E.U so it seems it would be far better to advertise

your PTE-product(s) as example below:-

Purchase-price of PTE-6xx $75 (Tax/Vat may apply within E.U and other Countries).

Then it comes as no surprise when a PTE-purchase also carries a Tax/Vat charge.

Brian (Conflow).

[RayC]

I vote to go along with Brian (Cornflow)as above.

Rayc

[LumenLux]

I think Igor, you already have it best and can keep it as is.

[8321]

I vote to go along with Brian (Cornflow)as above.

Rayc

I support this suggestion. Will work for the African colonies.

Jeff

[Barry Beckham]

When we were resident in the UK and had to become Vat registered we added VAT on after the price quoted in our shop. As I recall, we couldn't add it into the base price and remove it for those overseas who didn't pay VAT and chose to go that way.

With an international web based business I don't really see how you can do much else.

Having said that, people do like to see the price for the product and not find a surprise increase when they get to checkout, but thats life. They know they are in a country that adds VAT or GST and if we ever have to add GST in Australia is will go onto the product at checkout

So add the tax at checkout, the customer can always stop before finally making a purchase.

[Guest Yachtsman1]

My opinion is to indicate there is a "sales tax" to add to the price depending on where the buyer is, then, when the buyer decides to purchase, show the full price before he/she commits to buy. BTW the last time we visited the US, "vat" or sales tax differed from state to state.

Yachtsman1

[ppenen]

Separate the VAT, the VAT or the taxes are different from country to country. Just mention in your advertisement that the price is without VAT or taxes.

Regards

Pierre

[JEB]

I agree with above but just to clarify one point.

I'm sure Barry didn't intend to suggest that the final price is ONLY indicted at check out but should be referred to before getting to that point. Sites where that happens are most annoying and can cause people to go off the idea. Specially if your a tight fisted Scot like me! It suggests a degree of underhand behaviour which probably isn't intended. So make it clear at the outset.

John

[Igor]

Thank you very much for advices! We'll continue separate VAT from price and will add more clear and visible note regarding VAT.

[cjdnzl]

A late reply owing to time difference between Europe and New Zealand. NZ charges GST (goods and services tax) similar to VAT, but it is always levied as an addition to the nett price of the goods. Goods from NZ sold overseas are not subject to GST, and imported goods up to the value of $400 (I think) are exempt as well. If physical goods are imported over that value, then Customs advise the recipient of the tax amount, and on payment will deliver the goods. Software directly downloaded does not attract tax at all, probably because of potential difficulty in collecting it. This is why people here will buy and download software direct from the overseas source. Although the same item may be available here at retail, with the seller's markup plus GST added to the price the final cost can be twice or more than buying direct with a credit card. I buy all my software this way.

The bottom line in all this is that PTE should be sold ex VAT from Wnsoft, with VAT added where required.

[wesmorgan]

Separate the VAT but declare an inclusive price so you save time calculating. A purchase is taxed and consumers should know already even before deciding to buy.

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