As of January 1, 2015, European Union regulations, in particular the so-called “VAT Directive”, require that suppliers of electronic services such as Pidoco charge value-added tax (VAT) according to the customer’s country of residence (place where the recipient is established) instead of according to where the supplier is based. This applies for all our customers who are not based in Germany, but are a European taxable person (e.g. a non-business customer). If you are currently using Pidoco on a subscription and are not a business, i.e. you do not have a European VAT ID, this may affect you.
So what does this mean for me?
If you are currently using Pidoco on a subscription, are not based in Germany and have not supplied a valid VAT ID to us, your current plan will be subject to a different VAT rate starting on January 1, 2015 (unless your country of residence happens to have the same VAT rate as Germany). Any renewals after that date will carry the VAT of your country instead of the currently charged 19%, the VAT rate currently applicable in Germany. Unless you are using PayPal to pay for your subscription (see below), there’s nothing you need to do. We will automatically adjust your subscription and invoices at the first renewal on or after January 1, 2015. If you need to take any action, we will notify you in advance.
Sounds complicated? Here’s an example! Let’s say, you live in France and are on a Starter plan, which renews every month. Currently we are charging you VAT according to the German rate of 19%. So you are paying: 12.00 Euro + 2.28 Euro (19%) = 14.28 Euro. As of January 1, 2015, we will have to charge you according to the French VAT rate of 20 %, because you are based in France. Hence the invoice amount will change to: 12.00 Euro + 2.40 Euro (20%) = 14.40 Euro.
Of course, the new rates will also apply to any new purchases made on or after January 1, 2015.
Paying via PayPal?
If you are using PayPal as payment method for your subscription you will need to authorize the new subscription value directly on PayPal before the next renewal of your subscription and will be notified separately via email.
Are you a business?
If you are a business and qualify for participation in the reverse charge scheme, you may supply us with your VAT ID number in order to be able to use Pidoco under the reverse charge scheme and avoid any VAT charges from our side. Please send your VAT ID to firstname.lastname@example.org including your registered email address as well as your customer ID, which you can find on your invoices.
If you have any questions, please contact us at email@example.com or +49 30 4881 6385.
Your Pidoco Customer Service