Paid supplier in full for invoiced amount, supplier came back and asked for more.

[MardaLi]

What is the name of your state? CA

Not sure if this counts as international law or is still applicable to US Law but I recently purchased a large amount of goods from a supplier in the EU and it was to be delivered to a warehouse in another country in the EU. This was made very clear via email at the start of our transaction. I was invoiced for XYZ amount before the shipment and told I had to pay before they would deliver the goods. I paid XYZ amount in full and on the invoice it explicitly stated the total with and without VAT (Value Added Tax). The amount was the same and I figured it was because they were selling to a company outside the EU and so VAT wasn't being charged. This amount also equaled the exact amount I was quoted initially in a preliminary quote so I thought everything was good. After payment was sent and the goods were delivered I was invoiced again for an additional 20+% of the original amount and the supplier said I had to pay the VAT on the goods.

I'm definitely in a bad place financially as I had budgeted based off their original invoice and I would have taken my business elsewhere had I know there was a 20% premium on top of the original price. This was never mentioned at any point in time and I was really blindsided by the extra charge. I simply cannot afford the cost right now.

Do I have any legal recourse in refusing to pay as they had invoiced me for XYZ amount and we both had agreed to that amount (and it was paid in full) before the goods were shipped?

 

[adjusterjack]

Here's your problem:

I figured

Which means you didn't know and didn't bother to find out.

If you owe VAT, you owe VAT regardless of your assumption or getting erroneous information. It was up to you to "know" not "figure."

 

[LdiJ]

Here's your problem:



Which means you didn't know and didn't bother to find out.

If you owe VAT, you owe VAT regardless of your assumption or getting erroneous information. It was up to you to "know" not "figure."

That would be accurate if they actually owed VAT. From what I know of VAT, its not at all clear that they actually owe it. In addition, VAT is not billed after the fact...its part of the original invoicing.

Now, that is not a guarantee that VAT should not have been charged since the products were delivered to another warehouse in the EU. However, what it does mean is that WE are not competent to comment on the issue. I did ONLY because you did. The OP needs advice from a tax expert in the EU...and should not pay the invoice for the VAT without such advice.

 

[PayrollHRGuy]

When the original quote was given did the seller know that it was being delivered within the EU?

 

[MardaLi]

When the original quote was given did the seller know that it was being delivered within the EU?

Absolutely. On multiple occasions (through written email and via phone conversation) they confirmed they knew it was being sent within the EU.

Here's your problem:

Which means you didn't know and didn't bother to find out.

If you owe VAT, you owe VAT regardless of your assumption or getting erroneous information. It was up to you to "know" not "figure."

From a legal perspective, would what happened between the supplier and myself not fall under "misrepresentation"? I was presented with a price where they said the total had the VAT included already and I based my decision of entering a contract with them off of this price and now they want to change the price after the goods have been paid for and delivered already. Does diligence not also fall to the other side in this case? As a business, if a customer asks "how much for X?" and I tell them it will cost you this much and they decide to purchase from me because the price is agreeable and later on I decide to tap them on the shoulder after they've paid up and say "actually there's also this extra charge, you should have known better", should the customer be responsible for that? Does that sound right to you?

 

[Zigner]

VAT is analogous to sales tax. You're in California - you know that the price that is marked does not include sales tax.

 

[MardaLi]

VAT is analogous to sales tax. You're in California - you know that the price that is marked does not include sales tax.

Except when it literally said "VAT included" in the total already on the invoice. Which is the total I agreed to and I paid for. And now they are saying they didn't account for VAT and I owe them an additional 20+%. This was an error on their part, but an error (that both of us didn't know was an error at the time) that caused me to enter a contract with them that can't be undone. I provided every scrap of information they asked for before they presented the total price and I agreed to it.

Right now my ask on this forum is more if I have a legal leg to stand on regarding being misrepresented the price and terms of sale should they press for the additional payment as the goods have been delivered and payment sent and we can no longer cancel the deal.

 

[Zigner]

The VAT didn't say it was "included", it just wasn't listed. Furthermore, you stated that your assumption is that, since it was being sold to somewhere outside the EU, the VAT wasn't due. However, since the product was delivered within the EU, the tax is due. The same thing would happen here in California.

You owe the money, that much is clear. Whether you can ultimately be forced to pay it is a different matter.

 

[MardaLi]

Appreciate the continued dialogue. I'm not sure how else to interpret an invoice where they list the total as

"Total including VAT: XXXX Amount — Please pay this amount before Y Date" (this is verbatim)

As anything but an all-in price, VAT or no VAT. As stated in this thread, they were made aware from the very get go and they even asked for confirmation on the delivery address before they issued the invoice. So yes if I owe VAT on the purchase, I owe VAT on the purchase, but the purchase price was misrepresented to include VAT already (even if it was zero-rated) which is what I had agreed to. Should the onus not fall on them to absorb the cost due to a lack of diligence? Before I paid them, I even asked my contact there to look over the invoice before I make the transfer to ensure the amount is correct and they said "yes go ahead and pay it". Had they correctly invoiced me or presented the "true" price I would have gone elsewhere or lowered my order as it was way over budget for me. I wasn't presented with this information and could only make a decision based on what was given at the time. But now I don't have the option of not doing business with them or going for a smaller order as they bring up the "new" price after all has been said and done.

It is analogous to going to the grocery store and buying food, getting rung through and asked to pay XXX amount, paying it in full, only to have the staff knock on your door the next day after you've eaten the food and say "actually you owe an extra YYY amount on top of that XXX amount". I'm trying to say I wouldn't have bought that food in the first place or bought less food had I known the price would have been that high at the checkout. I'm genuinely trying to understand the reasoning behind folks on this forum telling me I owe the new amount regardless and the store shouldn't be responsible for absorbing that loss despite the transaction having been carried out on agreed-to terms already, terms presented by the store initially.

 

[Zigner]

Best of luck to you.

 

[LdiJ]

ARG!!!!!

NO one here is an expert on VAT and none of us have any business giving the OP advice other than to consult someone who IS an expert on VAT.

 

[Zigner]

ARG!!!!!

NO one here is an expert on VAT and none of us have any business giving the OP advice other than to consult someone who IS an expert on VAT.

Oops - I guess we should never given any advice if we're not an "expert", right?

Just out of curiosity, how do you know that "NO one here" the requisite knowledge?

 

[LdiJ]

Oops - I guess we should never given any advice if we're not an "expert", right?

Just out of curiosity, how do you know that "NO one here" the requisite knowledge?

I am sure that some of the people here have a little bit of knowledge about VAT. I know that a couple of people here have lived in countries with VAT. I know that I have some knowledge. However I am quite certain that no one here has actually had to deal with vat on a professional tax level. Vat is not as simple as sales tax. In fact, it can be quite complicated.

 

[Mass_Shyster]

I wonder if the seller has any recourse, and in what court the seller would have to sue in order to attempt to collect.

 

[LdiJ]

I wonder if the seller has any recourse, and in what court the seller would have to sue in order to attempt to collect.

Again, that would be a question for someone who is an expert on VAT. If the product was in the US, I would guess that the seller would be SOL. However, the product is still in the EU, so I have no idea.