So you are exempt from paying VAT (below the annual limit) - but at the same time got a European VAT ID to be able to do B2B in the EU properly.

Yep, works similarly in some other EU countries too.

Yep, and the irony none of accountants which i asked about it had a clue about it, including company which i used for dealing with papers and accountant which i use currently.
I think it's due fact how when dealing with EU companies it's not VAT deduction, but VAT auto-deduction, so if someone would charge me VAT on invoice i wouldn’t be able to deduct, unless it wasn’t been included in invoice at all, ie. auto-deducted.

Well... I think auto-deduction is not the correct term. EU B2B services are a reverse charge. It's not 0% because it's VAT-free or already deducted. It's 0% because the buyer side is responsible for adding the VAT. (Of course right after adding they can also deduct, IF eligible.)

With your setup (not VAT registered, but have a EU VAT ID), you are basically a private person in the dealings:
1. local companies have to charge you VAT
2. you can't charge VAT,
3. you can't deduct the VAT from the invoices from local companies
Basically you are like a private person, a VAT "endpoint", who pays VAT for real when buying something.

Now with EU B2B it gets strange.
- B2B EU income: you don't charge VAT for B2B services when getting income, that's clear
0% VAT on the invoice, the other side is responsible for paying it. It's not 0% because you are VAT free locally, but because it's a reverse charge because of EU laws.

- B2B EU expenses - if you get a 0% VAT invoice from an EU company, you may need to self-asses the local VAT for it and pay it
Your side is responsible for paying it. Normal VAT registered companies add then deduct this VAT, effectively paying 0% VAT. (The VAT will still be paid down the line of course, when they sell something to an "end-user".)
If you're not VAT registered, you can't deduct, and you may be responsible for adding the local VAT to the 0% invoice, reporting it via a special form, and paying it.

This is a stupid quirk of course, that originates from you getting 0% VAT invoices from EU businesses (because you've got an EUVATID), which you don't get from local businesses.

About this special case, I wouldn't be surprised if not all countries enforce self-reporting and paying it.



I personally find these "special tax status"/"VAT exempt" things to be too much trouble when doing international business. My experience is the same, most accountants don't know the rules for these special cases (special tax status + international transaction).
If you're only doing international B2B, and not selling anything to locals (or private persons abroad), you don't get any extra money by being VAT-exempt. But if you get big advantages on other kinds of taxes because of it, it can still be well worth it of course. :)

No, the bank has nothing to do with charging VAT, it is your duty to register for it and pay that at the local tax office

You can be a VAT payer but don't have to be unless your yearly turn-over is above 50,000 € (locally it is exactly 49,790€). If you are not a VAT payer:

1. as an EU businessman you are obliged to pay VAT if and you order goods from another EU country into the country where your business is located IF the value of the goods is above 14,000 € (may differ between the countries). Bank has nothing to do with charging VAT.

2. same as #1 applies if you ,as an EU businessman, order services from a company located in anohter EU country (e.g. hosting) though in this case there is no minimum value, so you always need to register for VAT before ordering services for your business. You also need to register (not pay) if you deliver B2B services into another EU country where the customer/client (another business) pays the VAT. Generally, the VAT is paid in the country where the service is utilized in case of B2B.

The VAT registration and paying as defined above does not make you a regular VAT payer (if you are not one), it is just for the purpose of B2B international trade/services in EU.

If you order hosting services from a company located in another EU country as a regular customer (non-business person), it is the hosting company that pays VAT and you dont need to register for it. :2 cents:

..that's why I use my hosting account as a regular customer and don't put that in my business expenses.

For anti-laundering I could see it being possible.

If a bank client gets busted for laundering money, it can cripple the bank. They have a very vested interest in investigating anything even remotely suspicious.

They kick out others, too. The bank has the freedom to decide who they do business with. If they don't like yah, they can cancel the account.

A week before I saw my personal manager I had e-mailed her a query regarding depositing Ukrainian cash into the branch, lol. It honestly didn't occur to me that this might be regarded as suspicous, but then I'm pretty naieve. Last year I made a few trips to Kiev because I was chasing a woman there, and I kept withdrawing their ridiculous currency from the ATM not knowing how much I had in my wallet. Anyway, when I came back after my last trip (no plans to visit there again anytime soon) I realized I had about 1,500 euros worth of Ukrainian Hryvnia. So I naievely asked my personal bank manager if I could deposit the notes into my account in the branch. I guess she probably flagged me for that.

I've been paying my VAT. I was under the limit until Czech VR paid me last year, so then I had to move on to the full VAT system here.

Lol, I better tidy my place then.

I doubt if it can as serious as that. My only payments have been from one very legit company and one big payment from Naughty Revenue a year or so ago paying me back some of the money they owed.

If it's the visits to the Ukraine and asking my manger if I can despoit a few left over holiday cash from there, then why the hell is the EU letting the Ukraine have freedom of movement if it's such a dodgy country (and it is, lol)?

Quite possible in my opinion. Banks are generally more cautious about cash deposits than bank transfers. If you add Ukraine with the current situation there, they've got a reason to flag you for a KYC procedure I guess.

Doesn't mean that they still won't kick you out if you flat out say you're advertising online porn though. :/

I would reply by email that that products I advertise varies a lot and tell them - here are the top 5 products I am currently promoting - then I would pick 5 mainstream offers from here:
https://www.offervault.com
( health, win iPhones, etc)
I would paste the cute little logo for each.
They will be happy and leave you alone.

Just read a funny post on FB, so i guess you are right:

In Canada I had something with RBC two years ago. I had too much money in Paxum so I wired some out to my RBC acct. About a week later they kicked me out with no explanations.

One advice to all, if your are self employed and need to wire in/out internationally, never have both your biz and you personally at the same bank! Try to keep wiring as low as possible. Also it is a good idea to have 2 banks for your biz in case you get kicked out. When you get kicked, they only leave you 30 days to get tfo...

Nice plug ...

Make some fake sites, Safe For Work.

One Domain, a couple of sub Domains. Pretty cheap insurance.