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Author Topic: VAT on microphone repair?  (Read 325 times)

Nob Turner

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VAT on microphone repair?
« on: June 13, 2019, 10:53:29 pm »

I'm trying to get Microtech Gefell to repair a mic that needs service. They have the mic, and have sent me the price for repair, but they want to add a 19% German VAT to the cost, though I am in the US. My understanding is that VAT is applicable only within the EU. Does anyone here know what the regulations are in this regard?

Thanks.

Gary Mankin

klaus

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Re: VAT on microphone repair?
« Reply #1 on: June 13, 2019, 11:32:59 pm »

They made a mistake. Goods and services shipped to an address in the U.S. are exempt from German value added tax.

VAT is "sales tax" charged in Europe for goods that stay in Europe. If you go in person and bring the goods back with you to the U.S., you usually pay the VAT up front, then show an exemption form at the German customs office at the airport, where you will get an official stamp, then re-submit the form to the vendor, who will refund the VAT to you on your credit card. If you ordered goods to be shipped to the USA by mail - you should NOT be charged VAT by the vendor.

This is not to be confused with import duty, but that's normally not an issue when shipping with USPS. However, Fed Ex, DHL and UPS will often act as customs broker and will add the import duty. Definitions and duty rates can be found here: http://www.usitc.gov/tata/hts/bychapter/index.htm
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Klaus Heyne
German Masterworks®
www.GermanMasterworks.com

Nob Turner

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Re: VAT on microphone repair?
« Reply #2 on: June 20, 2019, 02:10:49 pm »

According to Gefell, VAT is due if the mic is sent directly back to me. If it comes through their US distributor, it isn't.

Gefell has a new US distributor, who seems very pleasant and responsive. (They seem to go through distributors frequently, and the old ones I've dealth with have developed a bad attitude towards them. I can sort of understand that.) They have given me an estimate, but don't have the parts built to do the repair at the moment, so we'll see how it plays out. It's already been over 6 months...

klaus

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Re: VAT on microphone repair?
« Reply #3 on: June 20, 2019, 09:22:04 pm »

Never heard of this before, and it makes no sense to me: any recipient of goods or services, corporate or individual, that resides outside the EU should be exempt from VAT.
I'd love for MG to cite the section of the German VAT law that supports this. (Or: could it be that they just want to throw some business to their U.S. distributor?)

And speaking of MG distributors: never knew they had any in the US, since they came up with a scheme of rather high order minimums, which scared off interested parties. What company got the bid?
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Klaus Heyne
German Masterworks®
www.GermanMasterworks.com

Nob Turner

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Re: VAT on microphone repair?
« Reply #4 on: June 20, 2019, 09:34:02 pm »

Streamworkz in Brooklyn.

I can send you the "proof" of the VAT law that Gefell sent to me - it's in German, so of course it was not helpful to me, but you could probably make sense of it.

klaus

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Re: VAT on microphone repair?
« Reply #5 on: June 20, 2019, 11:59:47 pm »

Still a bit incredulous... but, yes, please email it to me. I want to make sure I am up-tp-date on what I publicize and propagate here and elsewhere.
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Klaus Heyne
German Masterworks®
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Kai

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Re: VAT on microphone repair?
« Reply #6 on: June 21, 2019, 04:16:15 pm »

Streamworkz in Brooklyn.

I can send you the "proof" of the VAT law that Gefell sent to me - it's in German, so of course it was not helpful to me, but you could probably make sense of it.
Would you please send this to me too!

I'm running a business in Germany and always handled it like this:
As soon as goods verifiable leave Germany to a company, or leave EU even to a private person, no VAT needs to be billed.

My partner was tax accountant, and this is in 100% accordance to my Federal Tax Authority, which just checked my bookkeeping OK.

There is a possible exception: if a SERVICE is given within Germany things become complicated, as the service by itself cannot be exported.
In my case, as a recording studio, the results of the service (the recording) is exported so no VAT billing is still valid.
I just have to make sure that I bill the result, the recording, and not the recording process, see below.

A pure (repair) service (of a microphone e.g.) cannot be exported, as the performance/service is rendered in Germany -  I hope I translated this terms correctly.


After some investigation I found out:
Forget the above, the situation has changed: exported services are tax charged at the receiver side now.
I remember the tax inspector was unsure by herself and had to double-check this in my case.

As always, as soon as the bureaucrats and lawyers step in, things become complicated.
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klaus

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Re: VAT on microphone repair?
« Reply #7 on: June 21, 2019, 05:42:20 pm »

MG's reply citing a section of the tax code for EU residents is not applicable for U.S. residents.
I have sent an email to the German Tax Authority and will report back once I get a response.
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Klaus Heyne
German Masterworks®
www.GermanMasterworks.com
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