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  1. #1
    Member Proverb's Avatar
    Join Date
    November 4th, 2005
    Affiliates in Europe: How do you handle VAT?
    I'm a U.S. citizen living in Portugal. My wife's accountant says I need to pay a 21% VAT tax on the commissions I earn through affiliate marketing (excluding the first 10,000 Euros).

    I'm new to this VAT taxing. I thought it was a tax imposed on the sale of goods or services at the time the sale was made. Is it correct that our affiliate commissions are subject to VAT?

    Any light that can be shed would be appreciated.


  2. #2
    ABW Ambassador
    Join Date
    January 17th, 2005
    United Kingdom
    VAT is an absolute nightmare, to be honest.

    I'm in the UK and don't know if the laws here are the same/similar to Portugal's. However, in the UK, you cannot be charged VAT on income derived from countries outside the EU unless that product or service is used by people inside the EU.

    So, if all your affiliate income is derived from US companies who do not provide goods or services outside of the US/Canada, then you are not liable for VAT.

  3. #3
    Member Proverb's Avatar
    Join Date
    November 4th, 2005
    I'm meeting with an accountant and tax attorney tomorrow to sort through this VAT situation. I've "heard" that you're correct about goods and services bought and delivered in the U.S. and am hoping that's confirmed tomorrow as 99% of my affiliate income is derived from U.S./Canada transactions.

    Otherwise, it is a nightmare since we can't pass on the VAT like retailers do. Would essentially mean double taxation - VAT and IRS income tax. Ouch.

  4. #4
    Join Date
    January 17th, 2005
    Interesting thread, I'm curious about the answer as well.

    -Allison Vivas

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