New EU VAT Legislation from Jan 1st 2015

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Henry Olonga
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New EU VAT Legislation from Jan 1st 2015

Post by Henry Olonga » Wed Dec 31, 2014 2:51 pm

Haven't seen this posted here ( if it has forgive me ) but this affects us all guys and is VERY IMPORTANT from tomorrow. :x . Acustica Audio and all third party developers who are based in the EU or sell to the EU are affected if I am reading it right. In their attempts to stop the big corporations from basing themselves in lower tax regions they have captured the little guys in a beaurocratic nightmare. And the big boys can handle it anyway.

So for those who are unaware what it is all about - just some snipppets from the web

http://www.crunch.co.uk/small-business- ... -payments/

http://rachelandrew.co.uk/archives/2014 ... t-changes/

http://www.theguardian.com/small-busine ... businesses

http://www.icaew.com/en/technical/tax/t ... ng-in-2015

Discuss. I have said in my own thread that I may have to sell on physical media until I speak to my accountant. :?
Last edited by Henry Olonga on Wed Dec 31, 2014 2:59 pm, edited 3 times in total.

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Re: New EU VAT Legislation from Jan 1st 2015

Post by giancarlo » Wed Dec 31, 2014 2:56 pm

yes....

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Re: New EU VAT Legislation from Jan 1st 2015

Post by Henry Olonga » Wed Dec 31, 2014 3:00 pm

If you purchase from outside the EU then you are unaffected by the way. ;)
I use wordpress and there is a healthy discussion there too

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Re: New EU VAT Legislation from Jan 1st 2015

Post by AlexB » Wed Dec 31, 2014 8:00 pm

By my side: in Italy is not active yet...
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Re: New EU VAT Legislation from Jan 1st 2015

Post by richie43 » Wed Dec 31, 2014 8:53 pm

I have been reading little snippets of this already, but thanks for posting some more cohesive info all in one forum. This is really upsetting. So often when i encounter some disturbing news, I can read the finer details and start to see how it's not as bad as I first thought...Not so this time; the more I read the worse it seems. I sure hope a better solution arises..... :(
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Re: New EU VAT Legislation from Jan 1st 2015

Post by Henry Olonga » Thu Jan 01, 2015 12:46 am

This is the most comprehensive write up I have seen

http://blog.sitesell.com/2014/12/defini ... rules.html

Seems like sending the links manually may make one exempt.

https://twitter.com/CoincidentalMus/sta ... 1199610881

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Re: New EU VAT Legislation from Jan 1st 2015

Post by richie43 » Thu Jan 01, 2015 3:25 am

Henry Olonga wrote:http://blog.sitesell.com/2014/12/defini ... rules.html

Seems like sending the links manually may make one exempt.

https://twitter.com/CoincidentalMus/sta ... 1199610881
Wow...that would at least a great loop-hole for some. I would be careful about spreading that around on public forums for fear of the "powers that be" realizing the loop-hole exists and change legislation again....yikes.
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Re: New EU VAT Legislation from Jan 1st 2015

Post by kindafishy » Thu Jan 01, 2015 6:14 am

I am admittedly a bit ignorant on this so forgive me if I am asking a stupid question, but could a North American company set up a shop and "source" all of it's products from Acustica and third party developers to sell into the EU, thereby avoiding this location dependent taxation?

You know, the NA company/store sells the products, so you developers are not selling directly, but rather you are just the suppliers of the product. B2B I guess?

People in the EU can purchase things from a Canadian website for example correct? How do taxes work in that case?

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Re: New EU VAT Legislation from Jan 1st 2015

Post by richie43 » Thu Jan 01, 2015 8:29 am

kindafishy wrote:I am admittedly a bit ignorant on this so forgive me if I am asking a stupid question, but could a North American company set up a shop and "source" all of it's products from Acustica and third party developers to sell into the EU, thereby avoiding this location dependent taxation?

You know, the NA company/store sells the products, so you developers are not selling directly, but rather you are just the suppliers of the product. B2B I guess?

People in the EU can purchase things from a Canadian website for example correct? How do taxes work in that case?
The way I am reading this stuff is that it is not source dependent at all, that's the problem. The sellers are paying taxes (with the new legislation) based on where the buyers are. They already were paying source-based taxes, that's why the businesses were setting up "home base" in countries with lower taxes. The concept makes sense, they are going after the huge businesses that are paying too low of taxes compared to the earnings. But from what I have read so far, they didn't think the laws through too well and didn't foresee (or didn't care, but I am assuming the best case scenario) how devastating it could be for the much smaller businesses that are making their small profits on the way they saved in taxes under the old laws. Am I missing something?
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Re: New EU VAT Legislation from Jan 1st 2015

Post by david1103 » Thu Jan 01, 2015 4:59 pm

This is a *very* disturbing change for UK small online business. What are people actually doing about this?! No way am I registering for VAT when I am nowhere near the threshold. If you make one tiny slip up in the bureaucratic nightmare of tax returns you are fined out of existence.

I read that the easiest thing was to just not sell digital products to EU countries from the UK. I also read this could be seen as discrimination and be illegal.

The easiest solution is to get a 3rd party to sell your digital products and deal with the VAT. Of course, you are being forced to give away 1. YOUR money for a service you don't even want (as they charge fees) 2. Control of your mailing list and the image of your business. This is massive.

My Nebula course is sold on Udemy, a USA company, so they deal with all the VAT. I have set it up so people need to go through my web site to get a voucher to go to their site.

I want to sell things directly from my website but this whole change in the law has stopped me in my tracks for now :cry:

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Re: New EU VAT Legislation from Jan 1st 2015

Post by kindafishy » Thu Jan 01, 2015 6:34 pm

richie43 wrote:
kindafishy wrote:I am admittedly a bit ignorant on this so forgive me if I am asking a stupid question, but could a North American company set up a shop and "source" all of it's products from Acustica and third party developers to sell into the EU, thereby avoiding this location dependent taxation?

You know, the NA company/store sells the products, so you developers are not selling directly, but rather you are just the suppliers of the product. B2B I guess?

People in the EU can purchase things from a Canadian website for example correct? How do taxes work in that case?
The way I am reading this stuff is that it is not source dependent at all, that's the problem. The sellers are paying taxes (with the new legislation) based on where the buyers are. They already were paying source-based taxes, that's why the businesses were setting up "home base" in countries with lower taxes. The concept makes sense, they are going after the huge businesses that are paying too low of taxes compared to the earnings. But from what I have read so far, they didn't think the laws through too well and didn't foresee (or didn't care, but I am assuming the best case scenario) how devastating it could be for the much smaller businesses that are making their small profits on the way they saved in taxes under the old laws. Am I missing something?
Hmmm, so if a Canadian website sells a digital product to a consumer in a EU country, the Canadian website must collect the taxes based on the location of the buyer?

This must come down to an agreement between the Canadian government and the EU, yes?

If there is no agreement, then the Canadian company is not required to collect or distribute taxes out of jurisdiction.

Perhaps this sort of agreement exists between Canada and the EU. David says that he sells his course through Udemy and they deal with VAT, so I assume there is an agreement with the US and the EU.

Are there not countries where these agreements don't exist, where a business can be registered to sell products without these restrictions?

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Re: New EU VAT Legislation from Jan 1st 2015

Post by richie43 » Thu Jan 01, 2015 7:13 pm

No, this law does not affect businesses outside of the realm of the EU, I didn't mean it that way. But for the businesses being affected by this, it means that the taxes are not simple and not based on their own location, but instead based on who the buyer is. And as David said, it also means that they have to give up their buyers info (for accountability), which could eliminate PayPal as an option for the money transaction (since PayPal's whole advantage is the buyers basic anonymity...). Maybe I am missing something, I am still trying to get through all of the info that is starting to become more available....
....which is another issue with this...Since this IS pretty major, why is the info so hard to find? Was this voted on anywhere?
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Re: New EU VAT Legislation from Jan 1st 2015

Post by enriquesilveti » Fri Jan 02, 2015 11:03 am

anonymity
This not exit in Internet, everything is tracked, all UE bank/money movement are tracked. Internet crime is a crime, there is no difference.


Spain started yesterday with this new regulation, and seems none know about it! As a freelance worker not affect me to much due in Spain I sell/buy with local VAT (21%) and in UE I sell/buy without VAT if the buyer/seller has UE VAT ID (you get it for free), also I have an UE VAT ID. The real issue is If I want to sell to a final customer without a valid UE VAT ID, but after implement a good database for link customers, country and VAT value, and write down into a pdf to send to public finances department, everything will me smooth.


PS1: If you buy or sell outside UE no VAT is applyed.


PS2: Will be a economic union between Canada/USA/Mexico and UE soon, so in my onion UE should setup VAT all countries at 20%.


Conclusion: Payplay should provide Acustica Audio and other digital stores a XML/XLS/PDF resume of each sale with country information and VAT value applied.
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Re: New EU VAT Legislation from Jan 1st 2015

Post by Tim Petherick » Fri Jan 02, 2015 6:30 pm

There are a couple companies offering automated calculation plugins

http://www.taxamo.com , this service is pay per sale.

And I'm currently using http://www.lyquidity.com/wpstore/2013/10/vat-for-edd/ and this one is a one upfront payment for plugin.

I only installed a few days ago on the 29th, so I'm in a trail phase to see how it works on my website...

Of course they could change this law at any point, so I suggest we all keep posting here on any new news. Anymore info in general is greatly appreciated.

I saw the 'manual delivery option' and decided it would be to complicated to keep things running that way. My prices were going to go up but now I will leave them to compensate for the added tax for eu customers.

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Re: New EU VAT Legislation from Jan 1st 2015

Post by kels » Fri Jan 02, 2015 9:50 pm

Post by enriquesilveti » Fri Jan 02, 2015 11:03 am

... and in UE I sell/buy without VAT if the buyer/seller has UE VAT ID (you get it for free), also I have an UE VAT ID.
I didn't want to publicly complain but ... because you mention that : I'm in the EU and I have a valid VAT number (since 1996 ...). I bought Nebula full price (VAT included) and I'm still waiting for the refund as the VAT has been applied when checking out ... Had some pm with Antonello who said he should consult his accountant ... long time ago now.

I'm not complaining that much. It's ok for me if you can't do something.

That said, if this new regulation forces you to do something for pro customers, I think it's nice too.

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