I am renting a server from a German based company, I live in South Africa and have been paying them through Paypal. On the invoices they have been charging me 19% VAT for the last 3 months- I only realised this a few hours ago (I don't check invoices ), Is this legal? AFAIK - Companies are not allowed to charge overseas clients VAT, as I understood it.
Before I go in there guns blazing to get my money back and threatning legal action I just need some advice and to get my facts straight from the experts before I look like an idiot.
It's my understanding that hiring a server would fall under telecommunication services and is treated as being supplied in the customers country i.e. South Africa. Given that South Africa is outside of the EU I think the German company should zero rate the supply as it is outside the scope of VAT.
If you are an incorporated business in your country you may be able to make a claim under the 13th directive. It's probably best to contact an accountant to confirm this though.
), Is this legal? AFAIK - Companies are not allowed to charge overseas clients VAT, as I understood it. 
