Questions about billing/cost, monthly caps, and VAT

Posted August 5, 2015 8.9k views
Getting StartedBilling

I’m considering switching to DO as my VPN provider, but I’m having trouble working out the cost of a VPN for comparison purposes. For one thing, I’m confused by the concept of a “monthly cap”:

On this page, it says “All droplets are billed hourly, up until a monthly cap. We have estimated that each month has about 672 hours (28 days)

But on this page it says “All droplets are billed hourly, up until a monthly cap. We have estimated that each month has about 720 hours (30 days)

Which of these is correct? And in either case, what exactly does it mean when compared to a calendar month? Would I be invoiced every 28 days, every 30 days, or every calendar month? If the latter, does that mean I get a certain amount of free days depending on the length of the month? (I’m considering a scenario with one VPN running 24/7/365, using PayPal to prepay.)

My other question concerns VAT. As a UK resident, I’d expect to pay VAT at 20% for services, and for it to be charged at the point-of-sale. However, the Ts&cs say that “Subscribers are entirely responsible for the payment of all taxes.” How do EU customers normally deal with this? To my knowledge, there is no mechanism by which I can pay VAT to HMRC (the taxman) myself, I can only remit them VAT I’ve charged other people for my services (and even that, only if my business is large enough to be VAT registered, which it isn’t.)

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4 answers

For 4 years we have been paying what is listed in your Pricing page: U$5.00/month for each droplet.

For the past couple of months we noticed that you started charging VAT and when we inquired, we were told it’s because the credit card is from a bank in Germany.

This is not how taxes work. The taxes I’m subject to, depend on where my primary residence is (at least in the EU). I could have a CC from wherever and still live mostly somewhere else, where I also pay my taxes.

Sorry to say, but it sounds more like Digital Ocean is using the VAT as an excuse for a surcharge instead of officially hiking up the prices, to avoid looking bad against the competition.

After all, we get monthly invoices from Google and Amazon, and neither one adds whatever-tax to the advertised prices. And yes, we are using the same CC for all of them.

  • +1
    I am not suppose to pay VAT either.

  • This happened to me as well, they suddenly started charging UK VAT when I used my credit card with NL address from a UK bank without any notice in advance. My Dutch VAT ID was just removed without notice.
    Accounting hell as I now have to sort out how can get the UK VAT returned as I have no connections with UK.

Hey! Sorry for the confusion but I think I can clear it up:

1.) All droplets are billed at their hourly rate until they reach the monthly price shown here.
2.) All billing is based on the calendar month. Invoices are issued and cards are charged on the 1st of each month.
3.) This is an oversight and our ToS is in the process of being updated. We began charging VAT for non-business EU customers this month. Based on the country indicated on your account the VAT will be automatically calculated and applied to your invoice. The sentence in our ToS you mentioned will be replaced very soon.

  • ryanpq, can you clarify 3.) a bit more? Where exactly does one choose/change a country indicated on a DO account?

    Is it?
    Or profile?

    What if there is no credit card added or no country in profile?

    Thank you!

  • The country assigned to your account is based on the country of the issuing bank for your credit card or if you pay by PayPal by the country you are logging in from. If you believe this may be in error you can contact our support team by opening a ticket and they can review and update this for you.

    • But you will lose all the VAT that was already charged. The billing address always shows my own country but still the card issuers country was used, this is ridiculous (they just make up a country for you based on an unreliable source).

I am fucking price policy digitalocean ?