Knowledgebase: Billing Info
Tax and VAT Policy
Posted by KB Editor on 05 June 2017 03:21 PM

In compliance with the tax policies, A Small Orange collects Sales Tax (Texas), European Union Value Added Tax (VAT), and Goods and Services Tax (GST) based on your city, state, or country. If you are outside Texas, or European Union (EU), then we are not required to collect tax (e.g., sales tax, use tax, or VAT), but this is subject to change. For more information on whether this applies to you, please see the tax rate chart below.

This article discusses the following topics.


Value Added Tax (VAT) Policy

A Small Orange, as a business entity, is required to account for VAT on electronically supplied services provided to EU non-business customers.

To fulfill our EU VAT obligations, we have opted to register for VAT under the one-stop scheme, a special scheme for non-EU suppliers of electronic services. This is in accordance with Article 357 to 369 of the above EC Directive rather than individually registering for VAT in each EU member state.

Under the one-stop scheme, we are required to charge VAT to non-business customers at a rate that applies in the customer's member state. The VAT collected will be paid over to HM Revenue & Customs in the UK, where we have chosen to register for the one-stop scheme from an administrative perspective.


Tax Rates

Tax TypeJurisdictionTax Rate
European Union (EU)
VAT Austria AT 20%
VAT Belgium BE 21%
VAT Bulgaria BG 20%
VAT Cyprus CY 19%
VAT Czech Republic CZ 21%
VAT Germany DE 19%
VAT Denmark DK 25%
VAT Estonia EE 20%
VAT Spain ES 21%
VAT Finland FI 24%
VAT France FR 20%
VAT United Kingdom GB 20%
VAT Greece GR 24%
VAT Hungary HU 27%
VAT Ireland IE 23%
VAT Italy IT 22%
VAT Lithuania LT 21%
VAT Luxembourg LU 17%
VAT Latvia LV 21%
VAT Malta MT 18%
VAT Netherlands NL 21%
VAT Poland PL 23%
VAT Portugal PT 23%
VAT Romania RO 20%
VAT Sweden SE 25%
VAT Slovenia SI 22%
VAT Slovakia SK 20%
All Others
GST Australia1 AU 10%
GST India IN 18%
VAT Japan2 JP 8%
GST New Zealand1 NZ 15%
VAT Norway1 NO 25%
VAT Russia2 RU 15.25%
VAT Switzerland1 CH 8%
VAT Taiwan2 TW 5%

Notes:
1 This tax started being included on invoices on 03/29/2018.
2 This tax started being included on invoices on 09/06/2018.

*In Texas, web hosting is considered a "data processing service," and 20% of the charge is exempt from tax. The actual amount of tax that is collected is calculated with the appropriate exemptions, where applicable.


Why Is Tax Included or Not Included With My Purchase?

If you are outside of Texas or India, then we are not required to collect tax (e.g., sales tax or Service Tax) on your account. Please see the tax rate chart above if your country is apart of EU.

Texas: Any customers with a billing address in Texas will be required to pay a state sales tax on top of the initial invoice. This does affect current customers and will be applied to recurring charges.

Data Processing Tax Rate in Texas

The Texas state sales tax is currently 6.25%. In addition to the state sales tax, A Small Orange is also required to charge a 2% local sales tax rate. The 8.25% sales tax rate is imposed on web hosting services, which is considered a "data processing service." Data processing services have been deemed to be taxable services under Texas law; however, 20% of the value of data processing services is exempt. Therefore, only 80% of the web hosting purchase price is subject to the Texas state and local sales tax. Please refer to this article to know how to enter your VAT registration ID in your client area.

India: India now imposes an 18% Service Tax on electronically supplied services sold by foreign entities to customers located in India effective December 1, 2016. As part of our ongoing compliance with India Tax Laws, we will be applying the India Service Tax on all of our products sold to Indian customers. If you are exempt from the India Service Tax, please contact us via Live Chat or submit a ticket to provide your India Goods and Service Identification Number so that we may exempt your purchase on your next invoice. The India Goods and Service Identification Number should be submitted through your client area.


Do You Accept Tax Exemption Numbers?

Texas: To be exempt from Texas Sales & Use Tax, we need the proper documentation proving tax exemption status.

For business tax exemption, we will require the appropriate form to be completed and emailed or faxed back to us for verification.

For non-profit organizations, we require a copy of your 501(c)3 certificate via email or fax.

Please contact our Billing department via phone or Live Chat to provide the documents or fax them at (678) 298-6780.

India: To be exempt from the India Service Tax, you need to input your India Goods and Service Identification Number under My Details in your client area.


Do You Collect Sales Tax From Texas Residents and Not From Out-of-State Residents?

According to United States Supreme Court decisions interpreting the U.S. Constitution, A Small Orange is only required to collect taxes for states in which it physically operates. If you are outside of the states or countries listed above, then we are not required to collect tax (Sales tax, Use tax, or VAT) on your account.

What About Other Countries?

For jurisdictions that A Small Orange does not collect Sales & Use Tax, Service Tax, or VAT for, it is the responsibility of the purchaser to pay any Sales & Use Tax, Service Tax, or VAT due, if any. Some jurisdictions require the purchaser to pay a Use Tax, Service Tax, or VAT directly to the state when purchasing from any out-of-state vendors in certain circumstances (i.e., in some jurisdictions, the tax is still due, but A Small Orange is not required to collect it). Please consult your accountant or government tax office accordingly.


External Sources

If you wish to know more about the tax policies, please visit your local taxing authority, government tax office, or your accountant for specific information and/or advice. Here are some links to the Texas Comptroller of Public Accounts and India's Central Board of Excise and Customs website, which will give you a greater understanding of the law.

Texas

India

Please note that support via Live Chat or support ticket is unable to and cannot make any tax/VAT/GST recommendations. For these inquiries, please consult with the recommended parties above (local taxing authority or accountant).

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