VAT increase 2021

[Sager+Mack]

Hello, does any body else have a "credit for VAT Increase" on his invoice? The calculation is wrong and nobody from adobe understands the problem that 19% of 29,09 isn´t 5,70... Our bookeeping will not accept the bill...

[WendellaBee]

The price of an Adobe Stock 10 image subscription is 29,99 not 29,09. 19% of 29,99 is 5,6981, rounded up it's 5,70. What am I missing in your request?

[Sager+Mack]

Thanks for your answer! Your Calculation is right. But it is fact, that our invoice contains a reduced price of 29,09! Sinsce January 2021. And I do not understand why! The position in the invoice is called "credit for VAT increase". So the complete calculation is wrong on our invoice and nobody is able to change. I told the person in live chat, that we pay a wrong price. But he and his collegue didn´t understand.

[WendellaBee]

Let me see what I can figure out.

[WendellaBee]

I've sent a message to our business team to investigate the issue. Please note that I likely will not receive a response until early next week.

[Leander5C87]

Exact same problem here. The calculations on the invoice don't make sense. This has so far been the case on all invoices issued in 2021. I guess it has something to do with the temporary tax reduction in Germany last year.

[Abambo]

You are right. The invoice does not make sense. Did you contact the support address as indicated?

Adobe customer care can be contacted here: https://helpx.adobe.com/contact.html - click the small callout at the lower right of the screen and type "agent".

(see also here: https://community.adobe.com/t5/creative-cloud-services/how-to-contact-adobe-support/td-p/11875703)

If yes, and the contact was not conclusive, report back.

[WendellaBee]

@Sager+Mack, @Leander5C87 is more or less correct. The continuing tax reduction is being applied to subscriptions started during the reduction period and the reduction/discount will continue for the length of the one year contract.

[Sager+Mack]

@WendellaBeedoes this mean we will receive a wrong invoice for the length of the contract? Tax calculation is still wrong.

[Leander5C87]

I got an answer by Adobe support, trying to explain the case.

The subscription was purchased (or renewed) in 2020, when the discounted tax rate of 16% was still applicable. Adobe didn't want to increase the gross amount of the monthly invoices in 2021 with the new tax rate of 19%, so they tried to compensate for it by reducing the net sum of the invoice. But there is still a calculation mistake in it.

- In 2020, the gross sum of the invoice was 28,99€, 16% Tax off of that sum is 4,00€ which leaves a net sum of 24,99€.

- In 2021 the gross sum remains 28,99€ but the tax increased to 19%, which, taken from 28,99€ is 4,63€, and leaves a net sum of 24,36€.

- That means, the "temporary credit for vat increase" must be -0,63€ and not -0,75€.

Can you please escalate this to someone in your "accounting team" who is capable of doing simple mathematics? Thank you.

[WendellaBee]

I'm forwarding your post to the appropriate team.

[WendellaBee]

The explanation above is a bit incomplete.

This was mandated in the EU where Adobe quoted tax-inclusive prices at the beginning of an Annual Billed Monthly (ABM) commitment term and where Adobe is obligated to maintain the price throughout the term.  So for ABM subscriptions whose commitment terms started during the 6 month period when the German reduced rate at 16% was applied, the tax-inclusive price at this tax rate applies through the full year.  However, as Adobe is still obligated to pay the German government the restored 19% rate as of Jan 1^st while maintaining the tax-inclusive price to the customer at the 16% rate, the tax rebate is applied that ultimately comes out of Adobe revenue.

Example:

• ABM subscription in Germany with a commitment term starting on Oct 1, 2020 at 30 EUR and assessed at the 16% rate.  The tax-inclusive price quoted would be 34.80 EUR.
• The Nov 1, 2020 and the Dec 1, 2020 billings still at the 16% rate would be billed at 34.80 EUR with the 16% VAT remitted to the German tax authority.
• The Jan 1, 2021 billing with the DE VAT rate now at 19%  would also still be at 34.80 EUR but where a 3% rebate applied to the customer and 19% VAT remitted to the German tax authority.

These tax rebate adjustments were done in conjunction with mandates from the EU.

[Sager+Mack]

Long text, long explanations - nothing is cleared. Sorry I am not satisfied with that! Still, we have a WRONG invoice every month in our company. I gues I will quit the abo because this is a mess. And it´s very sad, that a company who is willing to pay more, just to have a correct invoice is not been heard. Verry disapointing. I will not discuss every month until end of the year with our bookkeeping.

[WendellaBee]

It would be helpful to me if you could give a detailed explanation of the issue, as I don't think I have a full understanding and need to convey this to the team. Is it that the discount is applied before the total/tax or am I missing something?

[Leander5C87]

Short version:

In the incorrect invoices, the discount is applied AFTER tax is added, which lowers the net sum, which would lower the tax (but it doesn’t in the invoice), wich would lead to a lower total (but it doesn’t in the invoice).
This is in my eyes a general mathematical mistake, or is at least not possible according to German tax laws. In Germany, VAT has to be calculated on the basis of the NET SUM.
The correct way would be to apply the discount on the net sum, THEN add the tax.

Long version:

- The net sum of a Creative Cloud subscription is 24,99€
- In 2020, when the subscription was started or renewed, VAT in Germany was 16%
- 16% of 24,99€ is 4,00€
- 24,99€ + 4,00€ leads to a total of 28,99€

- In 2021, VAT in Germany increased to 19%
- The net sum is still 24,99€
- 19% of 24,99€ is 4,75€
- 24,99€ + 4,75€ would be 29,74€
- Adobe tried to compensate for this by applying a discount of -0,75€ on the net sum, which leads to a seemingly correct total of 28,99€, but is a mathematical contradiction, because it lowers the net sum to 24,24€ and leaves the tax at 4,75€, but 19% of 24,24€ ≠ 4,75€ or 24,24€ * 1,19 ≠ 28,99€

The correct way would be:
- Net sum: 24,99€
- Discount: -0,63€
- New net sum: 24,36€
- 19% VAT of 24,36€: 4,63€
- 24,36€ (DISCOUNTED NET) + 4,63€ (VAT) = 28,99€ (TOTAL)

Does this explain it to you?

[WendellaBee]

@Leander5C87 @Sager+Mack thank you for the additional information I have forwarded it to the appropriate team.

[Sager+Mack]

No, there wasn´t a Temporary credit for VAT increase before. This is since January 2021 (End of Tax 16%).

So now we have following issue:

Pos. 1 Adobe Stock 10 Stockmedia a month => price: 29,99 €

Ust: 19%

Pos. 2 Temporary credit for VAT increase => - 0,90 €

Net Sum=> 29,09

Then follows the field for the tax calculation wich is simply wrong:

Net Sum: 29,09 / UST (19%): 5,70 €

Invoice number is IEN2021010958636    - Maybe there is somebody in Adobes office who is able to calculate with percents and maybe somebody is able to find our invoice in their system. And then maybe somebody is able to change that mistake.... Every small company has to do that every day in their bookkeeping. So I guess that a company like Adobe should also be able to do that and calculate right. This is embarassing. Sorry!

[Maximilian24241926351j]

Euch ist schon klar, dass ihr in Deutschland keine Vorsteuer ziehen dürft (unabhänig von der wirren Erläuterung).

Wenn du Unternehmer seid, müsst Ihr eure USt ID bei Adobe hinterlegen, dann bekommt Ihr eine Rechnung ohne USt. (gebe es das Problem dann eh nicht mehr). Wenn Ihr das nicht tut und Adobe euch USt in Rechnung stellt, ist das falsch ausgewiesen USt (§14c UStG) und das hat zur Vorlage Versagen des Vorsteuerabzugs...

[Maximilian24241926351j]

Achso und ich vermutte die behandeln die Erstattung wie Schadensersatz und deshalb ohne USt...