Publish Date: Thursday, January 31, 2008
To the attention of our resellers! As we announced recently in our VAT registration news, after mid-February LiquidNet Ltd. is becoming VAT registered! The official VAT registration, and respectively the date from which the new VAT tax will be charged, has been scheduled for 1 March 2008. However, it will be our duty to confirm the date well in advance.
We would like to present to your attention now more detailed information about the new VAT scheme that will come into force from the beginning of March. Hereby we shall explicate all clauses in our future billing and invoicing policy. And most importantly, we shall differentiate the cases that will be affected by the new VAT changes, and those (that is the bigger part) that will remain the same.
Let's get acquainted now step by step with all details in our upcoming correspondingly modified billing policy. And most importantly, let's outline the cases that will, from 1 March 2008, reflect the VAT changes:
VAT CLASSIFICATION GROUPS
To bring here clarity upon the VAT classification groups, all resellers are to be referred to as Businesses, whilst end-clients (all clients buying at retail price) can be either businesses or Individuals. Thus:
1. UK VAT at 17.5% is applicable to: Businesses (no VAT/VAT registered) and Individuals from the United Kingdom; and Individuals from the European Union.
2. Clients where VAT is applicable but WILL NOT affect the service pricing (i.e. equals to NIL): Businesses from the European Union.
3. Clients outside the scope of VAT: non-EU clients (Businesses and Individuals).
PRICING
END-CLIENTS / RESELLERSPANEL BUSINESS RELATIONS
As we stated recently in our news column, upon receiving of the verified account owner details information of all existing end-clients (Businesses or Individuals buying at retail price), the service pricing in the Web Hosting Control Panel-s of those of them that have been defined (on residential basis) as VAT applicable, will be re-set (after the official confirmation of LiquidNet's VAT registration) to reflect the new VAT changes. Thus, UK VAT at 17.5 % will be applicable to all service prices in their future money-related actions, and they will be served by new VAT Order Forms, adequate to the new VAT financial relations. The same will automatically become valid (after the official confirmation of LiquidNet's VAT registration) for all new end-clients who, at Sign Up, present account owner information that categorizes them (on residential basis) as UK VAT at 17.5 % applicable (in accordance with item 1 of the above clarified VAT Classification).
Full Details:>>
RESELLER COMMISSIONS
RESELLERS / RESELLERSPANEL BUSINESS RELATIONS
The reseller commissions will remain unaffected by the new VAT changes. Also no difference will make the country your clients come from, and whether or not your clients are VAT applicable. That is, the amount of your reseller commission will still be calculated as the difference value between the wholesale price and the retail price (without the VAT added):
NET RETAIL - WHOLESALE = COMMISSION
(* where net retail is the retail price without VAT)
For example, if a client of yours buys a web hosting service for $100.00 USD retail price ($117.50 total value, if the client is VAT applicable; $60.00 wholesale price), your commission due will be $40.00 USD.
We would like to outline here one specific occasion. If you are an UK reseller/VAT registered (irrespective of whether your clients are VAT applicable or not), UK VAT at 17.5 % will be applicable to your reseller commission from the side of LiquidNet Ltd. Thus, if your reseller commission due is $40.00 USD, LiquidNet Ltd. will pay to you $40.00 USD + $7.00 USD (UK VAT at 17.5%) = $47.00 USD Total Commission Amount.
Full Details:>>
INVOICING
Upon each purchase the end-client will receive a type-a invoice. The new type-a invoices will reflect the VAT changes when the client is VAT applicable. The resellers will be sent a copy of each type-a invoice issued to their clients. Together with the copy of the type-a invoice, an Info Note type-c will be sent to the hosting reseller, displaying the wholesale value of the services his/or her client has purchased. Each month, together with the commission payment, the reseller will receive
a self-billing tax invoice, providing him/her with information on the calculation of his/her commission amount, as was explicated in the section above.
Hopefully, the integration will be fluent and easy for all parties. In the process of searching for a simple and practical resolution on our future VAT policy, we tried to stay as close to the old scheme as possible, while introducing only a few system updates for those of you who will fall into the category 'VAT applicable' after the official registration of LiquidNet.
IMPORTANT: As we have already prepared for launching all of the up-explicated system updates in terms of billing (pricing, order forms) and invoicing, our Technical Department has decided to activate some of them ONLINE earlier in advance, so as to have plenty of time to collect your feedback, the VAT classification client information and to monitor the performance of our unique reseller web hosting system. For that purpose, FROM TODAY, in all Order Forms of our existing and new (Sign Up) clients the VAT price field will be featuring with $0.00 value, simply informatively as no VAT will be charged until 1 March 2008.
Please, follow our news section for up-to-date information and should you have any questions, do not hesitate to contact us.
