KVR Audio

aMUSEd · Post by **aMUSEd** » Tue Dec 16, 2014 4:38 pm

I think until I'm clear what this means I might just make all my banks free/donation based. It's not like they sell loads anyway but I don't want to have to deal with this.

liquidsonics · Post by **liquidsonics** » Tue Dec 16, 2014 5:56 pm

aMUSEd wrote:I think until I'm clear what this means I might just make all my banks free/donation based. It's not like they sell loads anyway but I don't want to have to deal with this.

What difference does it make if income is a variable donation or a fixed fee amount? It's still income that should be declared for VAT and income tax purposes. Unless you're a registered charity and maybe it's different then but I don't know the rules there.

kp · Post by kp » Thu Dec 18, 2014 1:28 pm

To add insult to injury, the PCI regulations are changing:

http://www.theregister.co.uk/2014/12/17 ... ot_breach/

Essentially, this means that even if you use PayPal, you would need to ensure your ecommerce site needs to be (self-assessed) for PCI compliance.

Angus_FX · Post by **Angus_FX** » Thu Dec 18, 2014 2:29 pm

Are you certain of that, kp? PayPal themselves advise that unless you use one of their advanced services where you may see an actual credit card number (Virtual Terminal or Website Payments Pro), you're outside of the scope.

The whole point of using a 3rd party merchant service like PayPal is to have them take on the liabilities of PCI compliance. Which is as it should be, handling credit card numbers is no joke - best left to the experts.

liquidsonics · Post by **liquidsonics** » Thu Dec 18, 2014 3:15 pm

Angus_FX wrote:Are you certain of that, kp? PayPal themselves advise that unless you use one of their advanced services where you may see an actual credit card number (Virtual Terminal or Website Payments Pro), you're outside of the scope.

The whole point of using a 3rd party merchant service like PayPal is to have them take on the liabilities of PCI compliance. Which is as it should be, handling credit card numbers is no joke - best left to the experts.

Yep the reg article itself says it's only a matter for people who see card data.

do_androids_dream · Post by **do_androids_dream** » Thu Dec 18, 2014 4:02 pm

I'm hurriedly trying to bring myself up to date on this. I run a mixing and mastering service of which most of the business is acquired online ie. someone emails me links to their files, I download them, mix/master them and send them email links back to download the finished result. There's nothing automated about my service.

Having said that I do work through Airgigs too which is a 3rd party aggregate service that is automated to some extent. The user (of my services) pays them, then once the job is done Airgigs pays me (keeping a cut for themselves). Does anyone know if, by using them, I can circumvent the ruling (ie. they will be paying the VAT on the service and I'm effectively working for them I guess)?

Would really appreciate anyone's help who is able to advise or point me to information where I can try to find out myself.

Thanks

kp · Post by kp » Thu Dec 18, 2014 5:23 pm

[quote="Angus_FX"]Are you certain of that, kp? PayPal themselves advise that unless you use one of their advanced services where you may see an actual credit card number (Virtual Terminal or Website Payments Pro), you're outside of the scope.

The whole point of using a 3rd party merchant service like PayPal is to have them take on the liabilities of PCI compliance. Which is as it should be, handling credit card numbers is no joke - best left to the experts.[/quote]

I thought so: "Other new requirements in PCI 3.0 (PDF) mean that any e-commerce merchants who redirect payments to a third party, even if they don’t touch any cardholder data, will be in scope for compliance with PCI 3.0"

I'd assumed that includes PayPal and not just a merchant like WorldPay (in redirect mode as opposed to integrated, which was always affected by PCI).

I'm all in favour of PCI/security on-line, but this really punishes the smaller business again; Amazon can probably just about pay for it out of the coffee money. I know it can be self-certified, but having been through that exercise recently, it's most definitely non-trivial to complete: a lot of people won't know about the new requirement, and of those who do, a lot will run screaming half way through the first page of questions...

liquidsonics · Post by **liquidsonics** » Thu Dec 18, 2014 6:01 pm

do_androids_dream wrote:I'm hurriedly trying to bring myself up to date on this. I run a mixing and mastering service of which most of the business is acquired online ie. someone emails me links to their files, I download them, mix/master them and send them email links back to download the finished result. There's nothing automated about my service.

Having said that I do work through Airgigs too which is a 3rd party aggregate service that is automated to some extent. The user (of my services) pays them, then once the job is done Airgigs pays me (keeping a cut for themselves). Does anyone know if, by using them, I can circumvent the ruling (ie. they will be paying the VAT on the service and I'm effectively working for them I guess)?

Would really appreciate anyone's help who is able to advise or point me to information where I can try to find out myself.

Thanks

Your first example sounds like it's excempt because it's not automated. The second sounds like a business to business transaction so assuming air gigs pays you rather than a client that sounds exempt too. However, please check that with somebody qualified to tell you for sure as I am certainly not.

kp · Post by kp » Thu Dec 18, 2014 6:39 pm

Also we've had advice from HMRC which doesn't seem to match their guidelines.

In the guidelines document that I think has been quoted here, things like lawyers offering advice online are exempt; we've asked about (publishing) editorial advice, and been told that is not exempt. It's entirely possible HMRC were wrong, were right, weren't asked the right questions or some combination of the above! It might also vary depending on who you talk to at HMRC. And we can't seem to get it in writing, which is worrying as we would then have no audit trail.

All very painful.

VariKusBrainZ · Post by **VariKusBrainZ** » Thu Dec 18, 2014 6:49 pm

So does this mean no more loopholes for dodging tax on software by buying from USA dealers or entering a USA payment address?

This could effect software sales across the board, not just from me I mean

Angus_FX · Post by **Angus_FX** » Thu Dec 18, 2014 7:22 pm

That depends on whether the territorial VAT authorities are willing and able to take action against those USA dealers. In theory, the law applies worldwide (from the point of view of those tax authorities), but in the absence of a treaty I'm not sure whether the US authorities would agree: my guess is if the German VAT office requested to audit a US vendor, for now they wouldn't get past the border.

macmuse · Post by **macmuse** » Sat Dec 20, 2014 3:24 pm

I read through some of this and want to get this straight: if a US individual has a US-only website selling music downloads or digital art or other digital item, do they have to collect VAT? And if so, who would they pay it to? (I'm not referring to software companies that are headquartered in the USA with offices in other countries.)

And, if a person in the USA is selling a license transfer in the KVR marketplace, do they have to collect VAT too (or else just limit sales to US people to avoid it)?

When you mention "automated", are you referring to a store using a shopping cart / automatic download fulfillment (such as e-junkie which is automated) versus someone like Quinto at SKNote who mails you the file after the sale -- is that what you are talking about, or is this reference to "automated" an entirely different subject?

Thanks!

liquidsonics · Post by **liquidsonics** » Sat Dec 20, 2014 3:34 pm

macmuse wrote:I read through some of this and want to get this straight: if a US individual has a US-only website selling music downloads or digital art or other digital item, do they have to collect VAT? And if so, who would they pay it to? (I'm not referring to software companies that are headquartered in the USA with offices in other countries.)

And, if a person in the USA is selling a license transfer in the KVR marketplace, do they have to collect VAT too (or else just limit sales to US people to avoid it)?

When you mention "automated", are you referring to a store using a shopping cart / automatic download fulfillment (such as e-junkie which is automated) versus someone like Quinto at SKNote who mails you the file after the sale -- is that what you are talking about, or is this reference to "automated" an entirely different subject?

Thanks!

I think US sellers have to collect VAT and send it to the EU VAT authorities. Sounds like an unenforceable farce and I doubt many will bother.

A person selling a used license would be doing that manually, so it's not covered in this.

Check out the HMRC guidance for what counts as automatic. It's not comprehensive but I think gives a good idea.
https://www.gov.uk/government/publicati ... l-guidance

masterhiggins · Post by **masterhiggins** » Sat Dec 20, 2014 7:58 pm

What I'm wondering is why any us-based business would bend over so quickly and easily without some kind of treaty in force? As it stands I wouldn't comply. They have no jurisdiction here.

-Sam

valerian_777 · Post by **valerian_777** » Sat Dec 20, 2014 8:05 pm

It's only relevant if seller and buyer are EU based. Some people have a hard time to understand that. VAT we have already (should i add of course?.. ..sounds like a nitpick) doesn't change: The changes are about MOSS.

KVR Audio

2015 EU VAT rules ("MOSS")

Do you know about the new VAT rules for 2015?