2015 EU VAT rules ("MOSS")

DSP, Plug-in and Host development discussion.

Do you know about the new VAT rules for 2015?

I live in the EU and know about the new VAT rules (MOSS)
30
15%
I live in the EU and don't know about the new VAT rules (MOSS)
120
60%
I live outside the EU and know about the new VAT rules (MOSS)
6
3%
I live outside the EU and don't know about the new VAT rules (MOSS)
44
22%
 
Total votes: 200

KVRian
505 posts since 30 Jan, 2009 from UK

Post Sat Oct 25, 2014 4:08 am

Katzenjammer wrote:
CableChannel wrote:Didn't read the whole thread, tried to google this topic to get concise information. Just wondering why are 90% of the information I find from the UK? Is this a rule that especially affects shops in UK?
It affects just about every company in the whole world who sells to consumers within EU.

You can read more about it here http://ec.europa.eu/taxation_customs/ta ... dex_en.htm
I liked this example:
A private person living in Sweden uses a Japanese online library. The Japanese supplier must charge Swedish VAT.

One-time VAT registration ("mini one-stop shop" – MOSS)
Non-EU firms supplying electronic services to consumers in the EU, can make use of a simplified procedure which allows them only to register for VAT in 1 EU country, regardless of how many other EU countries they are supplying. That country collects and distributes the VAT on behalf of all the other countries – charged at the applicable national rate depending where the customer belongs.
I'm interested to see how they're going to enforce that. Good luck EU, the world must look pretty lucrative from high up there in cloud cuckoo land.

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KVRAF
1604 posts since 13 Apr, 2011 from EU

Post Sat Oct 25, 2014 8:55 am

They won't be able to enforce it, it's just ridiculous.

It's a bookkeeping nightmare especially for smaller companies. Also imagine press-releases, you will not be able to include a real gross price but instead you have to go with the net+VAT and that's something the non business people hate, and probably illegal in some countries.

I tried to register for the MOSS (from the Irish revenue) and I couldn't because my business is actually a one-man business and the registration form wanted two different contacts. They didn't even think about small businesses and VAT registered people (not companies) selling software online.

The only logical move for businesses like me is to go with a distributor that handles VAT for you, hence earning less and have less overall control.

Thanks Europe.
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KVRAF

Topic Starter

4731 posts since 18 Jul, 2002 from London, UK

Post Tue Nov 25, 2014 2:35 am

Better late than never (well, only a little better), the MSM is finally picking this story up.

http://www.huffingtonpost.co.uk/soozi-b ... 77222.html

I'd appreciate it if you can take a look at the petition here, please sign even if you're not in the EU, it's a worldwide problem.

https://www.change.org/p/vince-cable-mp ... l-products

Full disclosure: I stand to gain nothing whatsoever from this, FXpansion's annual turnover is greater than the VAT threshold anyway. Indie developers need to be aware of these new rules though & we should be fighting to have them applied in a sane, proportionate manner.
This account is dormant, I am no longer employed by FXpansion / ROLI.

Find me on LinkedIn or elsewhere if you need to get in touch.

KVRAF
2866 posts since 28 Jan, 2004 from Da Nang, Vietnam

Post Tue Nov 25, 2014 2:50 am

As a US based developer I'm highly inclined to just blow this off. There's not much they can do in the EU to people outside their jurisdiction, right?

As an outsider I have to say that while the EU sounds nice in principle it sure seems like a clusterfuck in practice.

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KVRAF
21686 posts since 7 Jan, 2009 from Croatia

Post Tue Nov 25, 2014 2:54 am

I simply cannot see this working at all. There's no way this is enforcable in any sane way.
kuniklo wrote:As an outsider I have to say that while the EU sounds nice in principle it sure seems like a clusterfuck in practice.
No bigger and no less clusterfuck that is the USA, I would say.

KVRAF

Topic Starter

4731 posts since 18 Jul, 2002 from London, UK

Post Tue Nov 25, 2014 3:09 am

@kuniklo good question, best call your accountant and find out. My guess is that for the time being you're safe, but I give it 5 years before the EU and US sign a sales tax treaty & companies end up having to account for state and EU territory taxes regardless of location.
This account is dormant, I am no longer employed by FXpansion / ROLI.

Find me on LinkedIn or elsewhere if you need to get in touch.

KVRAF
2866 posts since 28 Jan, 2004 from Da Nang, Vietnam

Post Tue Nov 25, 2014 3:19 am

EvilDragon wrote: No bigger and no less clusterfuck that is the USA, I would say.
US is increasingly a big clusterfuck as well, it's true. But at least there's generally only one set of stupid rules you have to worry about.

KVRAF
2866 posts since 28 Jan, 2004 from Da Nang, Vietnam

Post Tue Nov 25, 2014 3:23 am

Angus_FX wrote:@kuniklo good question, best call your accountant and find out. My guess is that for the time being you're safe, but I give it 5 years before the EU and US sign a sales tax treaty & companies end up having to account for state and EU territory taxes regardless of location.
Probably true. I guess what this means is that for small fry like me some kind of middleman like ShareIt is a necessity. Which is a pity because I think their sales process is horrible for customers. Plugging directly into something like Stripe instead would be vastly more user friendly.

I'm not any kind of libertarian and I think government has an important role to play in keeping society sane and healthy but this is a perfect example of how damaging the unintended consequences of a well-intended law can be.

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KVRist
487 posts since 5 Sep, 2011 from Sussex, UK

Post Wed Nov 26, 2014 2:10 pm

Thanks for keeping on bumping this, Angus. I saw your post back in the summer and there wasn't much information round then. There isn't much more now, but what there is would be pretty alarming for many people - if they knew even about it!

Clearly this isn't very well thought through legislation, but I think that's probably as much as anything because the people framing it have very little clue about everyday life and are more interested in tax harmonisation. As ever, the people who are likely to be worst hit are precisely those people whose interests are most poorly represented in government - the poor, the self-employed, people working more than one job to make ends meet...

I could rant for ages about the details, but this blog post is quite helpful in clarifying things as they stand currently:
http://rachelandrew.co.uk/archives/2014 ... t-changes/
One of the reasons so much of the material about this rule change relates to the UK is that the VAT registration threshold is so much higher here - and the VAT system is very much geared towards working with businesses, not individuals. With a different hat on, I have a VAT-registered business myself, and it's certainly much easier to deal with than it used to be, but anyone without this experience - perhaps just selling an ebook from their kitchen table for a couple of hundred euros a year - will find the prospect intimidating and the extra time and effort involved impractical.

What I really want to know is:
* How am I to fulfill the regulatory requirement to verify (without making a purchase needlessly burdensome) a purchaser's place of domicile? I think the requirements are really rather onerous for a sole trader or micro business. This - and the rather variable/open-ended penalties involved - is the biggest problem of all.
* Which intermediaries will be compliant? Specifically, what about Bandcamp? It doesn't look very promising. I'm thinking purely about music download sales here, though there might be some interesting workarounds...

If the aim was to punish excessive "tax-efficiency" (ahem) in some large online businesses, then the result will be the opposite - pushing small independent businesses into the arms of resellers, payment platforms and large marketplaces that will tie them in and raise the cost of doing business. Either that, or people will stop trading altogether. :dog:

I may VAT register. I may (reluctantly) find an intermediary (if a suitable one exists). I may shut up shop. None of these options appeal very much. In the meantime I have a short amount of time to make a decision and not enough proper information to go on. :?
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KVRist
487 posts since 5 Sep, 2011 from Sussex, UK

Post Thu Nov 27, 2014 9:42 am

Apologies for the double post, but a recent bit of tweeting with the UK HMRC (who administer VAT in the UK) strongly suggests that manually sending out links or files will mean you aren't caught by the regulations (unless you're VAT registered anyway) and don't have to do the MOSS thing.

I'll be happier when I've seen some more official guidance, but if true I suppose this is progress of a sort. It looks like an attempt to exclude micro businesses, though it does seem slightly Luddite. And how it would be enforced is anyone's guess. It doesn't make life any easier for marketplaces reselling soundsets or samples (some of which are quite small operations), which I imagine will have to comply fully.

And, of course, the regulatory bodies in other countries than the UK may take a different view (though this could be helpful leverage to persuade them not to), so YMMV.

More news if I get it!
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KVRian
1030 posts since 15 Nov, 2005 from Italy

Post Thu Nov 27, 2014 1:32 pm

Thanks for the tweet, coincidental. It's a trick and... well, that's ridicolous we'd manually send emails in the 2014. I hope they'll figure out very soon the consequences of this new regulation on small companies and hopefully amend this BS. In the meanwhile, I'll stick with a middle-man for my business.

KVRist
38 posts since 19 Oct, 2011

Post Sun Nov 30, 2014 6:30 am

Compyfox wrote:Great, so I can close my doors in terms of international service(s) permanently.
Next thing you'll request permanent installed "flush reducers" in toilets and shower heads again (Berlin alone
...
i have a new shower head and hate it. all it can be set to is too low and too high pressure

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KVRist
487 posts since 5 Sep, 2011 from Sussex, UK

Post Sun Dec 07, 2014 6:59 am

A quick update...

This news applies specifically to the UK, but read on, wherever you are. Following a lot of agitation, some freelancers and interested parties have met with UK government and taxation representatives to explain how potentially damaging all of this is to small/micro/nano businesses.

Here's a good summary of the meeting.

These rules are going to be an increasing headache for everyone selling into and out of the EU, and as the report suggests, may soon be expanded to physical goods as well. This will affect you as a consumer as well as as a business, with rising prices and lowering profit margins all round. Eventually, as the bigger marketplaces increase their stranglehold, anyone buying pretty much anything will feel the effects, so the time to agitate is now!

Watch out for #VATMOSS on Twitter, and sign petitions and write to your MEP (if in the EU). If you're a non-UK EU seller, I'd be particularly interested in hearing what you've been told about how this might affect you. In France, for instance, I've heard that some "auto-entreprises" have been told that the existing VAT thresholds will still apply, so they don't need to worry. This is certainly not what the EU regs say, but is this something anyone else has been told?
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KVRian
505 posts since 30 Jan, 2009 from UK

Post Thu Dec 11, 2014 7:17 am

Some new info from HMRC of interest to small sellers.

1) For UK sellers. Those under the ~£80k VAT threshold still have to be registered for VAT and registered for MOSS, but can zero VAT rate their UK sales just like they would their 'EU export' sales to regions outside the EU.

https://www.gov.uk/government/publicati ... l-guidance

Not really a big win in terms of administration headaches, but at least it's a concession that will save UK residents some money.

2) For all sellers (I think). It looks like people who fulfil their sales manually won't be affected by the MOSS rules at all. So long as their systems don't automatically populate emails and run automatic license generators, they can escape the whole thing because their sales won't count as 'electronically supplied' even if they're sent via email. Check out section 2. I had to read a couple of times, and I'm still not convinced I've got it right, but my accountant said he agreed with my interpretation there. Looks like a real helping hand being offered to people who sell a tiny amount and have not bothered to set up an automatic system. I was really concerned people just starting out with a product who are doing it all by hand would be totally put off the whole idea of selling their output due to the need to register for VAT - but now, perhaps this means those people can just stay as a human in the loop until their own success means it's too much of a burden to fulfil manually, at which point their business can probably take the admin hit. Have I got this one right or did I miss something?

So, automated systems can just insert a randomly bounded delay based on tenable waking hours in the host country for all license delivery emails and sellers can claim they're doing it all by hand. I'm pretty sure that's a loop-hole waiting to be exploited by sellers who are keener to save their prices going up than to guarantee immediate fulfilment for their user base (and don't mind breaking the law).

I'm wondering if offering people a VAT discount based on whether a vendor sticks a human in the loop to process the sale for their purchase is legit. I can see some people opting for a slower license delivery option to save some money. Perhaps this is the dawn of 'super-saver' delivery on software delivered online! I can imagine back to the time I finished uni, had no money, and didn't mind planning ahead buying software that way; taking a 2 working-day hit waiting for a license in order to save the VAT would have seemed pretty appealing as that's no worse of a delay than buying boxed retail software online and waiting for the postman.

KVRian
513 posts since 3 Sep, 2009 from Poland

Post Fri Dec 12, 2014 12:58 am

Sorry such a basic question, I'm fresh and hate taxes :)

Are reselling services like shareit a remedy for dealing with vat-moss? E.g. do they work like Apple, it's B2B and they handle VAT?
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