2015 EU VAT rules ("MOSS")

[Wildfunk]

Sounds to me as if you don't have that much business then ...

Why? I just said that i doubt that the small devs are selling hundreds of digital goods monthly and inside all existing EU-countries

It doesn't matter how much you sell because it doesn't make more work in case of the vat report. If you only have a few sales you can do it manually... if you have hundreds of sales you let do it automatically (database).

All the small creators of samples/soundbanks are acting like it's "impossible" to meet the new requirements. It would be only a real problem if the MOSS would not exist.

Oh and btw - greetings to my hometown (Nuremberg (Maxfeld)).

[Compyfox]

This is the thing... "small" developers or sample providers might not have the skills or the time to handle all that themselves. Especially if their content went (as it's called in "modern speech") viral. Others might only do this for sh*ts and giggles, and they simply dropped their releases (I've read ton's of comments like that on Twitter). And then there is the fraction that is confused of what to do.

We have to see how this all pans out.
But as of this moment, it looks like that you can't handle all that on your own. Unless you're a wizard in that area (taxes).




Oh and btw... I'm not from "Maxfeld", I grew up in the south-west of Nuremberg. I sometimes really miss that place.

[Wildfunk]

This is the thing... "small" developers or sample providers might not have the skills or the time to handle all that themselves...

Sorry but i just hear excuses all the time Of course you need to learn how to file the vat report correctly. But this takes only somes minutes, not hours or even days.

Even for Germany there's a well-explained FAQ available: http://www.bzst.de/DE/Steuern_Internati ... _node.html

Also nobody prevent you from setting up an excel-sheet doing all the calculations based on the sales/tax rates.

[PALU]

It's not only the case of filing the VAT reports - for example in my country if you earned below a reasonable threshold you weren't needed to be a VAT company. And now - no matter how much you earn - you have to register as a VAT company. And VAT regulations are not that easy here.

I wanted to start making and selling preset packs in 2015 - I could not have chosen worse time to do this .

[do_androids_dream]

This is the thing... "small" developers or sample providers might not have the skills or the time to handle all that themselves...

Sorry but i just hear excuses all the time Of course you need to learn how to file the vat report correctly. But this takes only somes minutes, not hours or even days.

Even for Germany there's a well-explained FAQ available: http://www.bzst.de/DE/Steuern_Internati ... _node.html

Also nobody prevent you from setting up an excel-sheet doing all the calculations based on the sales/tax rates.

The thing is though Wildfunk, this is something that very small businesses just don't need. Governments are going to spend more on the admin of all this than the pittance they are going to get in taxes from tiny online businesses. Bigger businesses have accountants to do this work. The smaller businesses will not be able to afford to pay someone else to handle this for them - which means it's one more time consuming headache for the sole trader/small business. So at the end of the day it just becomes one more thing working against small businesses. It won't affect the bigger businesses in this way at all.

[Wildfunk]

And now - no matter how much you earn - you have to register as a VAT company.

Are you sure?

I wanted to start making and selling preset packs in 2015 - I could not have chosen worse time to do this .

You could try this: http://www.digitalgoodsstore.com/

[Wildfunk]

The thing is though Wildfunk, this is something that very small businesses just don't need.

I agree but we have to live with it.

It won't affect the bigger businesses in this way at all.

As far as i know this new rule was created because of the big businesses! Amazon sold digital goods all over Europe but payed only (low) taxes in Luxembourg for example.

[do_androids_dream]

The thing is though Wildfunk, this is something that very small businesses just don't need.

I agree but we have to live with it.

It won't affect the bigger businesses in this way at all.

As far as i know this new rule was created because of the big businesses! Amazon sold digital goods all over Europe but payed only (low) taxes in Luxembourg for example.

That's why I said 'in this way' - I meant that it won't impact upon the time/stress level of the bigger business owners - they just hand the work to the accountant. I'm well aware of the financial reasons for the change in law.

[PALU]

And now - no matter how much you earn - you have to register as a VAT company.

Are you sure?

Yes - I'm sure. To be able to sell to EU I would have to register as a VAT payer. Normally there is a 35000 EUR yearly limit below which you don't have to be a VAT payer in Poland.

[coincidental]

As far as i know this new rule was created because of the big businesses! Amazon sold digital goods all over Europe but payed only (low) taxes in Luxembourg for example.

You may also be interested to know that this legislation is now forcing many independent e-book publishers to close, leaving authors with very little alternative but to sell through .... Amazon! (at poor royalty rates and with very disadvantageous terms and conditions). But, you seem to be asking - why would this be? Are these publishers panicking? Hysterical? Ignorant?

Sorry but i just hear excuses all the time Of course you need to learn how to file the vat report correctly. But this takes only somes minutes, not hours or even days.

I think you misunderstand the nature of the problem. Filing the return is the easy bit. And, yes, with very few sales it would be easier than with lots of sales (not much easier though). However, making your site and your business compliant with the technical requirements - in terms of evidence gathering and corroboration, in terms of displaying the correct local price and providing the correct local invoicing, and in terms of ensuring your data protection practices are up to scratch - will take rather longer than filling in the quarterly form. Rather longer, in fact, than filling in dozens, hundreds, possibly thousands of quarterly forms. Perfectly achievable if you have a multinational corporation and a world-class technical team. A nuisance, but probably achievable with a small group of web-savvy tech-heads and some legal advice. Problematic if you have a kitchen table, a laptop and a basic knowledge of HTML.

Using an intermediary like digitalgoodsstore or fastspring is indeed one solution - though you will have to pay another percentage (on top of Paypal fees). And the VAT will, of course, make your product more expensive for European customers than comparable products sold by non-compliant (for now) sites elsewhere worldwide. Please also spare a thought for those who are being affected who are not technically minded at all (even though they may be very skilled in their field), or who are running a small digital business while otherwise unemployable due to illness or obligations as a carer.

Moreover, as szalonykp points out, many economies have been structured to reduce the regulatory burden on small/micro/nano businesses. There are excellent micro- and macroeconomic reasons for this, and removing those protections is not something to be welcomed by anyone.

Many of the links people have posted in this thread (such as http://www.euvataction.org) have more information for you, but don't forget to familiarise yourself with the potential penalties for non-compliance - they're different for each of the 28 Member States. Which will one will you sell into first?

Oh, and, I almost forgot!

I agree but we have to live with it.

We have to cope with it, but we don't have to like it, and we absolutely can do something about it. Protest! Write to people! Make a noise about it! (Who better to do that than musicians? )

[seismic1]

This just in from Bandcamp:-

http://blog.bandcamp.com/2014/12/30/eu- ... -bandcamp/

I sent them a message because I already got a few sales from EU today and no VAT or other tax/cut was taken from the payments. I think they didn't change anything in the way transactions are handled. That's misleading and potentially risky.

I sent them a message too. The reply implies that the implementation of the solution is still being worked on, but in the meantime the responsibility for collection/distribution of VAT lies with them. This still seems to jive with the quarterly schedule of producing VAT reports/payments.

I have also asked them how the payments will be collected. i.e.; will they be a deduction from the seller's stated price, or as I expect, an addition to the seller's stated price, although this may possibly require repayments from the seller for any interim period prior to full deployment.

[kp]

[quote="coincidental"][quote="Wildfunk"]As far as i know this new rule was created because of the big businesses! Amazon sold digital goods all over Europe but payed only (low) taxes in Luxembourg for example.[/quote]
You may also be interested to know that this legislation is now forcing many independent e-book publishers to close, leaving authors with very little alternative but to sell through .... Amazon! (at poor royalty rates and with very disadvantageous terms and conditions). But, you seem to be asking - why would this be? Are these publishers panicking? Hysterical? Ignorant?
[/quote]

And it's a bit of genius negotiation by Amazon and Google: they pay a bit more tax in the EU and they put smaller competitors out of business by virtue of the new regulations being difficult and/or confusing enough to adhere to. They must be laughing all the way to the bank.

And the EU think they've done well...sigh.

[audiothing]

This just in from Bandcamp:-

http://blog.bandcamp.com/2014/12/30/eu- ... -bandcamp/

I sent them a message because I already got a few sales from EU today and no VAT or other tax/cut was taken from the payments. I think they didn't change anything in the way transactions are handled. That's misleading and potentially risky.

I sent them a message too. The reply implies that the implementation of the solution is still being worked on, but in the meantime the responsibility for collection/distribution of VAT lies with them. This still seems to jive with the quarterly schedule of producing VAT reports/payments.

I have also asked them how the payments will be collected. i.e.; will they be a deduction from the seller's stated price, or as I expect, an addition to the seller's stated price, although this may possibly require repayments from the seller for any interim period prior to full deployment.

I received the same reply, but honestly it doesn't make sense. I still receive a payment via Paypal from a EU country. They can say whatever they want about "responsibility" but I will still be obliged to pay VAT and register to MOSS.
I had to stop selling (on bandcamp) for now until they gave more details about that.

[Angus_FX]

The thing is though Wildfunk, this is something that very small businesses just don't need. Governments are going to spend more on the admin of all this than the pittance they are going to get in taxes from tiny online businesses. Bigger businesses have accountants to do this work. The smaller businesses will not be able to afford to pay someone else to handle this for them - which means it's one more time consuming headache for the sole trader/small business. So at the end of the day it just becomes one more thing working against small businesses. It won't affect the bigger businesses in this way at all.

Exactly. Most countries have one of two systems in place for locally based sellers:

- in nations where everyone is expected to play by the rules, a minimum turnover threshold below which you don't need to register for VAT (in the UK, £80,000; in Germany, EUR 17500; in Eire, EUR 35000).

- in nations with large informal economies, a general shared understanding that the tax office won't pursue businesses below a certain value, as they've bigger fish to fry.

The same should be applied to the distance selling of e-services - as, indeed, it is for distance selling of physical goods from outside the EU. Sell less than the turnover threshold in a given territory? No problem, you don't have to register or account for it.

[daz.diamond]

a good analogy :

http://hannahkate.net/hannahs-bananas-a ... s-analogy/