eBay VAT status changes in the EU

eBay are to change their VAT status in Europe with the establishment of a new company located in Luxembourg, called eBay Europe, S.à r.l. From March 1st all European eBayers will have their contracts moved from eBay International AG in Bern, Switzerland to eBay Europe, S.à r.l.

This change won't affect most eBayers - the total fees charged will remain the same (Although eBay have just REDUCED fees, again effective March 1st).

The main difference will be to VAT registered business sellers who have applied to pay eBay fees net of VAT. In this case previously sellers were charged fees net of VAT, effectively in the UK with 17.5% VAT a 14.89% discount. This will change to 15% VAT (the rate effective in Luxembourg) effectively a 13.04% discount. The net change for the UK is a loss of 1.85%

Other European countries will be affected somewhat differently - for instance France with 19.6% TVA will have a greater change with a net loss of 3.35%.

It is important to remember that gross eBay fees as per the published tariff will not change, the only sellers affected will be business sellers who have registered their VAT number with eBay for VAT exemption. Although increases in costs are never welcome we would expect most sellers will probably cease to notice the change after a month or so.

Finally if you have been claiming VAT back yourself from the tax authorities from 1 March 2007 this will no longer be possible. The only way to pay eBay selling fees net of VAT will be by registering your VAT number with eBay.