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New EU VAT regulations
Post by rtr2 on Dec 30th, 2014, 5:01pm

As you may know, on 1st January 2015 new EU regulations come into effect which require Value Added Tax on digital downloads to be charged at the rate applicable in the country of purchase rather than, as at present, the country of supply (i.e. the UK).

For the time being, at least, it will not be possible for me to meet the requirements of this legislation in respect of non-UK sales, so customers in the EU but outside the UK will no longer be able to purchase BB4W by means of the 'Buy Now' button on my website.

If you are in that situation, either place your order before 1st January 2015 or use one of the alternative methods of purchase. For example you can still pay by PayPal if you contact me first: I will then send an 'electronic invoice' and deliver BB4W on a CD-ROM.

Richard.
Re: New EU VAT regulations
Post by KenDown on Jan 7th, 2015, 11:41am

I read something to the effect that HMRC was going to simplify matters for the benefit of SMBs. It might be an idea to keep an eye on their website.

Alternatively, set up a subsidiary company which is not VAT registered!
Re: New EU VAT regulations
Post by rtr2 on Jan 7th, 2015, 2:30pm

on Jan 7th, 2015, 11:41am, KenDown wrote:
I read something to the effect that HMRC was going to simplify matters for the benefit of SMBs.

Many people hope they will, but at the moment it seems unlikely. Because these are EU rules any changes HMRC might propose would have to be approved by every other country.

Quote:
Alternatively, set up a subsidiary company which is not VAT registered!

That doesn't help, because if you wish to sell 'digital goods' (i.e. automated downloads) into the EU the threshold for VAT registration has been reduced to... wait for it... zero! That's right, now you must register for VAT however small your turnover is. What's more you cannot use the simplified Annual Accounting scheme available to small traders; you have to submit a VAT return quarterly. This is why the new rules are so crazy.

Incidentally, as you probably realise, I could de-register for VAT any time I like, because my annual turnover is miles below the threshold for registration. So if that helped (it doesn't) I could do that without any need for the creation of a "subsidiary company".

Richard.
Re: New EU VAT regulations
Post by ady on Jan 8th, 2015, 2:02pm

on Dec 30th, 2014, 5:01pm, g4bau wrote:
As you may know, on 1st January 2015 new EU regulations come into effect which require Value Added Tax on digital downloads to be charged at the rate applicable in the country of purchase rather than, as at present, the country of supply (i.e. the UK).


Then once the buy-it-in a-zero-vat-country and re-sell-it-in-a high-vat-country industry gets too big.... they'll swap back again....

tsk tsk tsk

edit

Bad news for the little guy too...

Under the new laws all businesses -- no matter their size or revenue -- supplying digital services direct to consumers in an EU member state (not including goods and non-digital products) will automatically forfeit their VAT exemption threshold (previously set at £81,000 in the United Kingdom) and be liable to charge VAT on each sale.

http://www.billboard.com/articles/business/6422332/europe-eu-vat-regulation-indies


More bad news...

What is going to change per 1 January 2015?
Based on this new VAT rule, your EU company must pay VAT in the EU country of establishment of your customers. In the above example, your Dutch company will have to pay different VAT rates applicable in each of the EU countries where your private customers are located. This means for example that your Dutch company will need to pay 21% Dutch VAT for the fees collected from your Dutch private customers, 25% Swedish VAT from your Swedish private customers and 19% German VAT from your German customers, etc. In principle this new rules mean that if you have private customers in each of the 28 EU countries, you will need to register for VAT in each of the 28 EU countries, file VAT returns in each of these 28 countries and charge local VAT with different rates in each of the 28 countries, etc

http://www.foreigninvestments.eu/en/fdi/expert-topics/change-in-european-union-vat-rules-per-1-january-2015-for-telecommunications-broadcasting-and-electronic-services
Re: New EU VAT regulations
Post by rtr2 on Feb 22nd, 2015, 10:14am

In the last few days I have received a couple of automated PayPal (download) orders from continental Europe, which I have had no choice but to decline.

Can I once again remind everybody that because of the new VAT regulations I am unable to provide downloads to European countries outside the UK. Please do not attempt to place such orders as it could put me on the wrong side of the law.

I can still deliver BB4W to Europe by post. Please contact me for payment options.

Richard.
Re: New EU VAT regulations
Post by ady on Jun 11th, 2015, 09:28am

If you supply your digital downloads through a third party site then you are exempt from this vat mess the government has created

The third party is responsible for all the vat admin

Might mean you have to charge a bit more for overseas customers but easier than snail mail

Also:
Sending digital content as an email attachment is not regarded as a digital sale for vat purposes
Re: New EU VAT regulations
Post by rtr2 on Jun 11th, 2015, 09:59am

on Jun 11th, 2015, 09:28am, ady wrote:
If you supply your digital downloads through a third party site then you are exempt from this vat mess the government has created

That is not correct. There is no compulsion on third-party software distributors to handle the admin, and many (probably most) don't. That is certainly true of the one I use, PayLoadz.

There may be some third-party distributors who are able to handle the VAT admin for a fee, but there's no way that would be economic for me (the number of copies I sell into Europe is tiny, as my recent league table shows).

Quote:
Might mean you have to charge a bit more for overseas customers but easier than snail mail

Although the rules are imprecise, my understanding is that only automated digital downloads are affected by the current regulations. I can still deliver the product as a file (e.g. attached to an email) so long as the order is processed entirely manually.

Richard.
Re: New EU VAT regulations
Post by Richey on Jun 12th, 2015, 06:16am

http://www.sinclairzxworld.com/viewtopic.php?f=10&t=1653

There has been an interesting debate on these rules here



Re: New EU VAT regulations
Post by dfeugey on Jun 12th, 2015, 08:15am

on Jun 11th, 2015, 09:59am, g4bau wrote:
That is not correct. There is no compulsion on third-party software distributors to handle the admin, and many (probably most) don't.

Distributor is not the right term. Software editor is. Who is the software editor? With PayPal, it's you, since PayPal is basically a bank. With Kagi or Share-It, it's them. They distribute the software and manage all the 'invoicing'.

Basically, if you don't manage the 'selling part' of the business, then the distributor is the editor, and you only the author. That's really simple tongue.