The mistery of Envato PTY and its EU VAT number
Should we, European professionals and companies, declare in our taxes our purchases done at Envato.com as European Purchases of Services?
Let me walk you through my ordeal to clear this mistery.
GD Consult is a consultant company specialized in professionals and companies that develop video games, web sites… basically, creative people that work with technology based in Spain. As such, we find common providers and customers among our own clients.
One of these providers is Envato PTY, an Australian company that “offers a digital marketplace, an educational platform, and a freelance network under its Envato Market, Envato Studio, and Tuts+ brand names respectively.” as stated in a company overview.
Envato's invoices are like this:
Here, we are informed that Envato has a EU VAT number, however there's something weird about it. The code starts with EU when, in order to really be a EU VAT number, it should start with the letters corresponding to an European Union country, i.e. GB for Great Britain, ES for Spain, IE for Ireland…
If we go to the Envato website for more information, it states clearly that they DO HAVE an EU VAT useful for buyers, which means, European companies that buy services in their website. All the related information in their website tends to state this: yes, they have an european identification number.
When getting in contact with them, no once but many times, they will tell you that their EU VAT Number is the one on their website and their invoices, to much chagrain of its professional customers because “we” all know that that number ain't right.
Transcrip of one of their emails:
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Envato is registered for EU VAT in the UK (HRMC).
If you are an EU buyer with a valid VAT registration number, you must use the Reverse Charge Mechanism to account for the EU VAT on those transactions.
The Reverse Charge Mechanism procedure is administered by your local tax authorities and further information should be obtained from them or your accountant on how you must account for VAT in your country.
For more information please see:https://help.market.envato.com/hc/en-us/articles/204237814-EU-VAT-Information-for-Buyers
Feel free to let me know if there’s anything I can do for you.
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What they are informing here is the process that we actually want to do, but cannot because of their wrong EU VAT Number. The theoretical information provided is right, the mistake is in the persons aplied to, without a valid EU VAT Number from Envato PTY, I cannot do what they are informing me to do (!!)
On an even later email, we are encouraged again to check their website or just leave them alone:
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Thank you for your message. I'm really sorry that our replies are insufficient. We have quite a few customers from EU and the number we provided you (EU826409867) suffices for all of them (as far as I know). Perhaps you can try reaching out to your accountant and ask for their advice.
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And also from a Compliance Manager at Envato, they propose to contact the United Kingdom HM Revenue and Customs for more information:
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The only VAT number we have is EU826409867. This will need to be used declare purchases in any EU country. However, if you need to verify it, you will need to contact HMRC in the UK.
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So, leaving us feeling like a weirdo, the one that doesn't know enough, and surely we make mistakes too, but we are looking for an answer to solve this issue. It doesn't work and it is impossible to be working for any other customer of theirs. Anyway, we contact the HMRC in the United Kingdom in search for an answer.
We write to the HMRC and, when receiving an answer, we finally find light at the end of this tunnel: not only they clearly answer to the question, surprised too because of the confusion caused, but swiftly in little over 48 hours.
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The company has a MOSS non-Union registration – which is a special VAT scheme allowing them to declare sales of digital supplies to consumers (B2C only) in the UK and the EU.
They are not registered for VAT in the UK and therefore do not have a VAT Registration number.
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Here is the key to the mistery, Envato PTY DOES NOT have an EU VAT Number.
Envato.com has a MOSS non-Union number that allows them to declare their sales to final customers.
End of mistery, Envato PTY is not an EU operator, we do not have to declare purchases in their store as European purchases but as an import of services.