Skype revises the way it charges VAT in EU regionWritten by Hammad Saleem on July 01, 2014 - 06:19AM @hammadsalim
There's a surprising news for Skype users residing in the European Union or Switzerland. It seems Skype has revised the way it charges VAT in the region. If you didn't know, Skype charges 15 percent VAT in the EU region, while its 8 percent for those in Switzerland. Previously, the VAT was charged when users topped up their account, for instance, if you purchase a €10 credit in EU region, you'd be charged €11.5.
However, starting from July 28th, Skype will change the way it charges VAT on purchases. Now, customers purchasing Skype credit will be charged the same amount they are topping up their account with. For example, if you're top up €10, you'll have to pay €10, not €11.5.
Instead, the VAT will be charged when you'll use it for making calls to landlines or mobile using Skype. "For Pay As You Go calls, VAT is charged when you make the call. Call rates will be exactly what you pay for your calls, inclusive of taxes. This makes it easy for you to clearly see how much your calls made from Skype cost," Skype said in FAQs on their support site. The PAYG rates will be the same as advertised, depending on your country of residence, and will include all the taxes. You can check out the PAYG rates on Skype website here, just select your country of residence and it will show you the call rates.
Customers who will use Skype Credit to purchase a subscription will also be charged the applicable VAT rate -- 15 percent for EU, 8 percent for Switzerland -- at the time of purchase. You can read more about it on Skype's support site.