New EU VAT Rules for eServices

Educate

Did a search there and couldn't find any recent discussion on the new changes to the EU VAT rules coming into force on 1st January 2015. I wasn't sure if this should be in one of the Arts forums or here though and didn't want to double post so put it here.

The long and the short of it is:

> If you supply any eService (website, digital download, music, film, distance teaching, etc. that requires the internet as an integral part of the provision of the service) to a consumer in any EU country other than Ireland you now have to pay VAT in that EU country

> There are no minimum thresholds for registering for VAT if you want to sell to an EU consumer outside Ireland (thresholds still exist in Ireland if you want to sell only to Ireland and rest of world)

> Even if your business is 99% Irish and you sell one eService (say an icon set or something) through your website to an EU constumer you have to register for VAT on ALL of your business activities, not just EU ones.

> Even if your business is 99% tangible goods (printed graphics) and you're below the VAT registration thresholds, and you sell one digital good (e.g. icon set) to an EU customer you have to register for VAT on ALL your activities - meaning you have to charge VAT on the 99% of tangible goods as well. I had read a post where someone suggested creating two businesses, one for tangibles and one for digital but someone else commented that this if frowned upon by government Revenue bodies (not sure where the Irish Revenue stand on this).

> You have to sign-up for VAT in each EU country or with the Revenue through their VAT MOSS system (Google: Revenue VAT MOSS)

> You have to keep records of each purchase location so you can account for the relevant VAT returns through the MOSS system

> You have to store these records from each purchaser for 10 years and this information is indentifiable therefore, following the letter of the law, you now have to register as a data controller with the Irish Data Protection Commissioner

> If you sell through a third-party (not your own website) such as Google Play, Apple App Store, then they have to look after the VAT and not you. So this applies only if you sell eServices by yourself.

I can't post links as I'm still classed as a new user so can't direct you to some related links. To get some related links try the below.

Google: TechCrunch VAT MOSS rules could create VATMESS startups
Google: EU VAT Action .org
Google: Change org UK Petition Vince Cable VAT uphold exemption threshold digital products

KonFusion

Ah yes, I've been reading about this. Mostly how to get around it.

The no thresholds thing is a bit nutty.

Mrs OBumble

Thank you - I heard about this for the first time today, and was scratching my head about the silence.

Personally this just means that I'm going to sell some things in the new year via channels only, and not set up a direct sale capability. Glad I've heard about it now, rather than later.

Could be quite a windfall for Amazon, etc.

mneylon

It's going to be interesting to see how businesses handle this.
We've been aware about it for some time and have been working with our software vendors to resolve the technical issues surrounding it... I've no idea if this is going to make things better or worse for us, but it's definitely going to add a substantial overhead

Educate

My biggest gripe is the removal of the thresholds.

One of the main reasons for this new law seems to be to prevent multinationals setting up in low VAT EU countries and only having to apply this low rate to any goods sold. The removal of the thresholds means even if you make €500 a year online as a small supplement to an already small income means you've got to account for VAT and potentially pay an accountant to do the returns (I know realistically they're straightforward and anyone selling online would probably be savvy enough to be able to do this) - but the law seems to be missing the whole point of thresholds so even if you make €1 you have to register now.

Seems the UK HMRC have already made moves to remove the VAT on UK eServices for UK sellers - so UK eService provides at least don't have to apply VAT to their own UK customers now (but still have to for other EU countries) as long as it's below their threshold (£81k I think). No other movement in any other country that I know of.

There's a twitter 'storm' planned for tomorrow - I still can't post any links so have pasted some detail below - it's all accessible at the Change.org petitions:

Targets

To be effective it is essential that the right people receive our tweets, rather than just Tweeting at random. So please direct each and every tweet you send to one of the following Twitter handles:

@pierremoscovici
@GOettingerEU
@Ansip_EU
@davidgauke
@hmtreasury

Hashtags

To gain press coverage we need to get the relevant hashtags trending. Last time we used the hashtag #VATMOSS, which has gained traction, but it’s very UK specific This time we want to make the relevance as EU-wide as possible so our primary hashtag is #EUVAT, but please feel free to use #VATMOSS as well if you have room for two.

#EUVAT
#VATMOSS


Edit: Also read that while this is an initial digital goods/eServices law they're looking to bring it in for tangible goods in 2016 - can't find exact link at the moment. So this might not have an immediate effect on tangible sellers but may do so in the near future!