lol I know its BAD but still many hosting companies feel that its Good.
So I just wanted to know that which companies here feel that its Good lol
It just leeches Clients Money
I know this is an old thread but found it interesting and wanted to reply anyway.
Taxes added to the price of the service is a legal obligation that any legitimate company operating in a tax jurisdiction that levies sales tax must do.
In the EU, VAT is levied on the vast majority of goods and services and hosting providers are obliged to add tax at the rate demanded by their respective countries. These days, mostly around 20%.
However, EU VAT is only applicable to sales arising from within the EU. So a buyer from HK for example would be exempt from paying that EU TAX.
As TAX is not applicable to all, it can really complicate matters, particularly when listing prices for goods and services online.
Take WHMCS for example. They list their prices in USD exclusive of VAT. This may seem unfair to hosts within the EU as when they eventually come to pay for it, they are slapped with a 20% tax ontop of the purchase. But WHMCS are not obliged to charge any VAT when they sell to Americans or any other nation for that matter, so this is why they advertise exclusive of tax.
Hostgator has recently started charging their EU based clients VAT. If you are an EU resident, technically, even overseas purchases are subject to VAT but it is upto the overseas company to collect and pay that VAT. Most companies of course won't both but when you reach a certain size (like Hostgator), the succumb to pressure from the EU and are forced to collect the VAT.
The real problems occur when tax is collected fraudulently. Perhaps Hostgator are collecting these additional fees and pocketing the money? I'm not sure, but it is certainly a possibility. One would need to be registered for VAT to collect it and this allows other VAT registered businesses to reclaim on it. I'm sure this is done but I'm sure there are plenty of hosts that rip off their clients under the guise of tax collection.
@XSMAX
Tax are include in our listing price to avoid confusion.
Interesting. Your website doesn't include a great deal of contact or company information but if you are indeed including tax on your prices, does that mean you deduct taxes for other registered (tax exempt) businesses or overseas buyers who are exempt of tax? Or do you collect it and keep the difference?
Us being an HK company where sales taxes are not levied, it is a very simple matter for us. We don't charge it, and we are not obliged to do so! I may be wrong but I think technically we should register and collect VAT for EU based transactions but there is no incentive to do so and no disincentive NOT to do so... So why bother right?
Any way, ideally prices should be listed inclusive of tax and price discounted when outside of the tax jurisdiction. This way, the only surprise is a perceived discount to outsiders.... But that's just my opinion :-)
