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Author Topic: Tax On Microphone Repair? (Or: Service Support For Foreign-Made Mics)  (Read 794 times)

Nob Turner

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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®
www.GermanMasterworks.com

Kai

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

Post deleteted by author for not giving up to date information.
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klaus

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

I had sent an email to the German Tax Authority and here is their response:

Dienstleistungen an einen Nicht-Unternehmer gelten im Grundsatz als an dem Ort ausgeführt, von dem aus der leistende Unternehmer sein Unternehmen betreibt § 3a Absatz 1 Umsatzsteuergesetz (UStG).

Wenn die Leistung von einer Betriebsstätte ausgeführt wird, kommt es darauf an, wo diese ihren Sitz hat.

Der Grundsatz für die sonstige Leistung an einen Nicht-Unternehmer gilt nicht, wenn eine sogenannte Katalogleistung für bestimmte sonstige Leistungen vorliegt (§§ 3a Abs. 3 bis 8 UStG).

Hierunter fallen z.B. Arbeiten an beweglichen körperlichen Gegenständen an Nichtunternehmer. Der Leistungsort bestimmt sich in dem Fall nach dem Ort, an dem der Unternehmer tatsächlich die Leistung ausführt (§ 3a Abs. 3 Nr. 3 UStG).

Der Ort der sonstigen Leistung für die Reparatur eines Geräts ist nach dem Grundsatz des § 3a Absatz 1 UStG zu beurteilen. Die sonstige Leistung gilt als an dem Ort dort ausgeführt, von dem aus der Unternehmer sein Unternehmen (Deutschland) betreibt. Die Leistung ist demnach in Deutschland steuerbar und steuerpflichtig. Eine Befreiungsvorschrift ist nicht vorhanden.

Das Umsatzsteuergesetz finden Sie unter:

http://www.gesetze-im-internet.de/ustg_1980/index.html

und den Umsatzsteuer-Anwendungserlass unter:

https://www.bundesfinanzministerium.de/Web/DE/Themen/Steuern/Steuerarten/Umsatzsteuer/Umsatzsteuer_Anwendungserlass/umsatzsteuer_anwendungserlass.html
 

Ich hoffe, dass ich Ihnen mit der Auskunft weiter helfen konnte.

Die Auskünfte dienen der Information und sind rechtlich unverbindlich.


Mit freundlichen Grüßen

Im Auftrag
Steuerliches Info-Center
 
Bundeszentralamt für Steuern
An der Küppe 1
53225 Bonn
 
Tel.: +49 (0)228 406 1200
Fax: +49 (0)228 406 3200
allgemein@steuerliches-info-center.de
www.steuerliches-info-center.de


Summary: when purchasing services performed within the EU, there are few if any exceptions to the rule that VAT is applicable in the EU country where the service is performed. (This is in contrast to selling goods. Here, no VAT is levied by the seller when sold to persons living outside the EU.)

It's the location of the service provider and not that of the residency of the recipient of the services that matters when determining whether VAT is applicable. It gets complicated when services AND goods are provided. So you are likely out of luck, and will have to cough up the additional 19%.
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Klaus Heyne
German Masterworks®
www.GermanMasterworks.com

Nob Turner

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Re: VAT on microphone repair?
« Reply #8 on: July 02, 2019, 01:58:58 pm »

Well, I arranged to have it shipped through their current U.S. distributor (Streamworkz in NY, who are so far very responsive and pleasant). That will allow me to bypass the VAT, but I'll have to pay twice for shipping - once to NY and then again to California.

However, they don't currently have any capsules (that's what they say this mic needs) and so far I've heard nothing about when that will change. For various reasons, not all directly related to Gefell, this has been a very slow process... I originally sent it through a now-defunct US distributor last December. I'm just hoping to get it back some day.

klaus

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Re: VAT on microphone repair?
« Reply #9 on: July 02, 2019, 07:35:47 pm »

You are very patient in a situation that should not occur, and with a company that continues to show its products at U.S. trade shows as available here.

I always advise clients to consider service and parts support before making the decision to spend several thousand dollars on a studio condenser mic. In the absence of adequate consumer protection laws that guarantee service and parts availability for x-number of years, we as consumers must vote with our pocketbook.

There is a similar situation (or even worse) with Sony high-end microphones sold in the U.S.: Try to find a domestic repair facility or a replacement part for a Sony C800 in the U.S! (Search a separate thread on this subject.)

Contrast irresponsible customer support policies to those of Neumann's: the company bends over backwards to provide service and parts for microphone models discontinued decades ago. Such practices deserve our support.
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Klaus Heyne
German Masterworks®
www.GermanMasterworks.com
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