Netcup 0% VAT Exemption Guide: Tax-Free Server Hosting for Non-EU Customers & EU Reverse Charge

Netcup GmbH is headquartered in Karlsruhe, Germany. As required by European consumer protection regulations, all retail prices displayed on their public website include 19% German Value Added Tax (Mehrwertsteuer / MwSt. / VAT) by default.

However, under European and German cross-border tax statutes, digital electronic services exported to consumers and businesses outside the European Union are 100% exempt from German VAT.

By ensuring your billing profile is accurately configured, your servers, Root Servers, and domain services will be invoiced at the net base price (Netto), saving you roughly 16% on every invoice indefinitely.

1. Legal Foundations for 0% VAT Exemption

Under European Union VAT Directive 2006/112/EC and Section 3a of the German Value Added Tax Act (Umsatzsteuergesetz - UStG):

1. Place of Supply Rule for B2C Digital Services:
   • When an EU-based provider supplies electronic hosting services to a consumer permanently residing outside the EU, the “place of supply” is legally situated outside the EU.
   • Consequently, German sales tax does not apply, and German merchants must issue invoices at 0% VAT (Steuerfreie Ausfuhrlieferung).
2. Intra-Community B2B Reverse Charge (EU Businesses):
   • Companies registered in another EU member state (e.g., France, Netherlands, Ireland) possessing a validated VAT identification number (USt-IdNr. / VIES) are billed under the Reverse Charge mechanism without German VAT.

2. Method 1: Automatic 0% VAT at Checkout (New Customers)

Netcup’s shopping cart features an automated real-time tax calculation engine. Currently, the tax exemption is matched automatically based on the country selected in your address information during account registration. For example, selecting China, the United States, or the United Kingdom directly triggers a 0% tax rate.

Follow these steps when creating a new account:

1. Add your desired server (e.g., Cloud VPS, Root Server) to the shopping cart.
2. By default, the Cart summary (Bestellübersicht) will display gross prices including 19% VAT because your location is initially unknown.
3. Proceed to checkout and choose “I am a new customer” (Ich bin Neukunde).
4. Crucial Step: In the customer billing information form, ensure you select your true non-EU residency under the Land (Country) dropdown field (e.g., United States, United Kingdom, CHINA - CN, Hong Kong).
5. Real-Time Net Price Update:
   • As soon as a recognized non-EU country is selected, the VAT line item changes from zzgl. 19% MwSt. to zzgl. 0% MwSt.: € 0.00.
   • The total payable amount automatically drops to the Netto price!
6. Complete payment. Your account is permanently designated as tax-exempt in the billing database.

3. Method 2: Rectifying Invoices & Requesting VAT Refunds

If you registered previously without selecting a non-EU country, or if your invoices were erroneously generated with 19% VAT, Netcup’s accounting team provides full retroactive adjustments:

Step 1: Gather Documentation

• Your 6-digit Customer Number (Kundennummer).
• Copies of invoice numbers containing VAT (found under CCP -> Invoices, formatted as R-2026-xxxxx).
• A scanned copy or photo of your official identification (Passport, National ID, or official utility bill) establishing your non-EU residency.

Step 2: Email Accounting (Template)

Send an email to mail@netcup.de:

Subject: Request for 0% VAT Status & Refund of Erroneous VAT - Customer ID: [Your Customer ID]

Dear Netcup Accounting & Support Team,

I am writing to request a tax status correction for my account. My Customer ID is: [Your Customer ID].

I am a permanent resident of [Your Country, e.g. United States / United Kingdom], which is located outside the European Union. Under EU cross-border tax regulations for electronically supplied digital services, hosting services rendered to non-EU residents are exempt from German VAT (0% VAT).

My registered billing address:
Address: [Your Address]
City: [City], Postal Code: [Zip]
Country: [Your Country]

I have attached a copy of my National ID/Passport to this email as proof of my permanent non-EU residence.

Also, I noticed that invoice(s) [e.g. R-2026-12345] included 19% German VAT. Could you please kindly:
1. Update my account profile to permanent 0% VAT tax-exempt status for all future billing;
2. Issue a credit note (Gutschrift) for the 19% VAT incorrectly charged on the aforementioned invoice(s) and refund the amount to my payment method.

Thank you for your prompt assistance.

Best regards,
[Your Name]

4. Processing Time and Refund Mechanism

• Turnaround: The accounting team manually verifies requests during German business hours. Processing typically takes 1-2 business days.
• Credit Note: Once approved, a negative invoice (Gutschrift / Credit Note) will appear in your CCP control panel, reversing the incorrectly collected VAT amount.
• Payout: The excess funds are automatically refunded to your original payment method (e.g., PayPal, taking ~3 business days) or deposited as account credit for future renewals, depending on your request.

5. How to Verify 0% VAT on Future CCP Invoices

After your account is adjusted:

1. Log into the Customer Control Panel (CCP).
2. Navigate to Invoices (Rechnungen).
3. Download the PDF for any newly generated invoice.
4. Check the tax summary table at the bottom of the document. You must see:
   • Steuersatz: 0,00%
   • Steuerbetrag: 0,00 EUR
5. A legal disclaimer will typically read: “Steuerfreie Ausfuhrlieferung / Tax-free export delivery.”