The value-added tax is an assessment of the incremental increase in the value of a product or service. It is designed to tax the value added by a business on top of the services and goods purchased from the market.

The EU has standard rules on VAT but which have been applied differently in each country in the EU. VAT must normally be paid on all goods and services, up to and including the sale to the final consumer. This can also include each stage of a production process from buying components, assembly, and shipping to the final sale.

Payment including VAT

At UpCloud, VAT is paid when adding balance to your account according to the rules of your country. The taxation percentage will depend on your country of residence. VAT does not apply to users from outside the EU.

EU businesses and VAT

The value-added tax is chargeable on most sales and purchases within the European Union for EU-based companies. The tax is collected fractionally through the production of goods and services via a system of partial payments by each party adding value to the final product.

VAT-registered businesses deduct the amount of tax they have paid to other businesses on purchases for their business activities from the VAT they collect. This taxation process can be simplified by excluding VAT from sales to other businesses.

If you sell products or services in the EU and are registered for VAT, you can have VAT excluded from your payments. Businesses who register a VAT identification number on their UpCloud account will receive zero-rate VAT. They are then responsible for paying VAT in their own country through reverse charges.

Adding your VAT identification number

If your business has registered for VAT, you are eligible for VAT free purchases. You can add your valid VAT identification number to your UpCloud account billing details to exclude VAT in the payments.

Begin by going to the User Accounts section in the control panel. Then open your account details by clicking the Change button.

User accounts

In the billing contact details, you can find the field for the VAT number. Select your country code from the list, then enter your VAT identification number in the next text field.

Adding a VAT number

When done, click the Save button at the bottom of the page to confirm the changes.

You can then verify that the VAT number was successfully added by going to the Billing page at your control panel.

Payment excluding VAT

The amount to be deposited will show the price excluding VAT.