Question about doing business with entrepreneurs from third countries.
March 26, 2012 | 25,00 EUR | answered by Michael Herrmann
Hello,
I purchased a download product from a business in a third country (USA) and paid with PayPal. PayPal converted the amount due in dollars to euros at its own exchange rate. I paid this amount to the seller in the USA. Do I now need to convert the total dollar amount to euros using the exchange rate from the Federal Ministry of Finance in order to calculate the sales tax, and then calculate the sales tax again from this amount, or do I need to calculate the sales tax (using the Federal Ministry of Finance exchange rate) from the amount that PayPal calculated for me at its own rate?
I received an invoice from the business in which "VAT $ 0" is indicated, therefore I would owe sales tax in Germany. I filled in lines 49 and 59 in my VAT return. Is that correct?
If the business in the third country had indicated the tax on the invoice, would I still owe the tax domestically?
Dear inquirer,
first of all, thank you for your inquiry, which I am happy to answer based on the information provided and in the context of your involvement in an initial consultation. The response will be based on the facts presented. Missing or incorrect information about the actual circumstances can affect the legal outcome.
As a business owner in Germany, you have received a service from a business in a third country electronically. The service is taxable in the third country according to § 3a para. 1 UStG. There is no tax liability in Germany.
In particular, the place of supply does not shift to Germany according to § 3a para. 3 and para. 4 no. 14 UStG. This special provision only applies to non-business persons or services not acquired by the company.
The other questions are therefore irrelevant. If VAT had been shown, you would have the right to request a corrected invoice.
I hope that these explanations have provided you with a sufficient overview of the situation in the context of your involvement and this initial consultation.
Best regards,
Michael Herrmann
Dipl.-Finanzwirt (FH)
Tax Advisor
