Our school was issued with a corporate VAT number on 01.11.2010.
Please follow the links below to read the EU directives that regulate VAT imposition and exemption in regard to the types of services rendered by our school.
COUNCIL IMPLEMENTING REGULATION (EU) No 282/2011 of 15 March 2011 laying down implementing measures for Directive 2006/112/EC on the common system of valueadded tax
COUNCIL IMPLEMENTING REGULATION (EU) No 1042/2013 of 7 October 2013 amending Implementing Regulation (EU) No 282/2011 as regards the place of supply of services
Archived doc http://europa.eu/legislation_summaries/taxation/l31044_en.htm Renewed Directive 6 https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=LEGISSUM%3Al31057
1. B2B transactions are normally VAT-free, i.e. the VAT rate is 0%. You have to ask for a B2B invoice to enjoy VAT exemption. The invoice has to list all tax-related details – the company name, legal address, corporate registry number, etc. What exactly is necessary can be specified when you apply.
If you are from Estonia, and you company is willing to pay for you, please note that if an Estonian company buys EnglishLab.Net services, it will have to pay VAT (the tax will show on the invoice), but there will be a rebate – the tax will be reimbursed (i.e. returned) to the company by the Tax Board of Estonia a month later. That is how B2B buying and selling works according to the law.
2. Common people who are EU residents pay 20% VAT. That’s what happens in shops when they buy food or clothes as well or pay their phone or electricity bills, by the way.
3. Common people who are non-EU residents do not have to pay 20% VAT. they are VAT exempt. That’s what happens in duty-free shops when we travel – the same laws apply. However, when you buy EnglishLab.Net OU educational language services online, you have to provide a valid tax residency certificate to be able to enjoy VAT exemption, and the procedure to follow to obtain such a certificate varies from country to country. You will be advised on what you have to do in your country when you apply.
4. Unfortunately, in some countries tax residency certifucates take a very long time to obtain, or they are not issued in a language that the Tax Board of Estonia accepts. As a result, it may be faster or cheaper to pay VAT than to apply for tax exemption (certificates of residency have to be translated in one of the 4 languages – English, Estonian, Russian, or German – and be attested by a notary, which costs money) to be accepted by our Accounts Department and, subsequently, by the Tax Board.
Electronically supplied services include services such as cultural, artistic, sporting, scientific, educational, entertainment, information and similar services as well as software, video games and computer services generally. The result is that:
- for specified electronically delivered services, when supplied by a non-EU operator to an EU customer, the place of taxation is within the EU and accordingly they are subject to VAT;
- when these services are provided by an EU operator to a non-EU customer, the place of taxation is where the customer is located and they are not subject to EU VAT;
- when an EU operator provides these services to a business in another Member State, the place of supply is the place where the business customer is established;
- where the EU operator provides these services to a private individual in the EU or to a taxable person in the same Member State, the place of supply continues to be where the supplier is located;
You need a tax residency certificate if you are a non-EU tax resident and you would like the tax exemption law to be applied to your invoice. As a result, you will not have to pay 20% VAT on top of the ELN standard fees.
If you need 1 or a few lessons, you may as well prefer to pay VAT and use our PayPal checkout for that.
Please note that the tax will be added at the checkout, and PayPal applies a ca. 5% transaction charge on all payments, so the calculation goes as followsEUR 24 + 5% + 20% = EUR 30.24 / 60 mins