It depends on the point of view essentially.
You're not really paying the VAT - we are.
The reason is because the taxation rules in Sweden, from where the business operates
has very unclear rules about just how computer server-generated services like this
should be taxed, and under what circumstances and from what countries. There are
numerous tax agreements which varies from country to country. This is also a rather
rapidly moving target. We therefore took a strategic decision and simply decided
to pay VAT to our tax authorities on all sales, so far we've heard of no-one being
questioned by our tax authorities for paying too much tax ;-) We judge this to be
more economical for us than to pay legal counseling to find out what rules apply
for the day for a given situation, and then coding this into our payment processing
We price the system from what we think it should cost the end user, then deduct
the VAT from that according to Swedish regulations. We're the only real loosers
here - the Swedish government gains a little bit, and some customers (those who
can deduct VAT, i.e. businesses) also gain a little bit.
For you as a private person it certainly appears as if you're paying VAT in some
situations where it's probably technically possible not to. The problem is that
we're the ones who must make that judgement, and then take responsibility for it
with our tax authorities. If it was the opposite, that you as the customer took
the responsibility we'd be happy to oblige, but that's not the case unfortunately.
Please look up your local regulations as to your rights to deduct VAT on purchases,
if you're a business chances are you can do this.
To sum up, we simply can't afford to really know in which cases we are not obliged
to pay VAT to the
Swedish Tax Agency. We hope for your understanding, and that the total amount
of VAT paid is so small that you can look at the actual cost to you and feel that
the service is worth it anyway. If you're intersted in purchasing a large number
of accounts and the cost actually is significant,
contact us and we'll try to solve the issue.