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New EU VAT Legislation from Jan 1st 2015

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Re: New EU VAT Legislation from Jan 1st 2015

Postby 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

Postby 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

Postby 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

Postby 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

Postby 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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Re: New EU VAT Legislation from Jan 1st 2015

Postby david1103 » Sat Jan 03, 2015 4:48 am

I can't say how this will work out for non UK businesses, but for the UK it looks very bad.

If i could only sell digital products via a TOR hidden service in bitcoin i would. Lets hope the tools become available to make this as easy as setting up a wordpress site.

I am certainly not going to be spying on my customers and handing their home addresses and IP's to anyone!

Seems the UK GOV have agreed that you can register for VAT MOSS and NOT have to charge VAT in UK, but this is not solving the problem:

http://www.telegraph.co.uk/finance/busi ... -rule.html

It seriously looks like UK micro business selling online will have to ban EU customers from buying their products or become VAT MOSS registered and demand 'evidence' of who customers are and where they live, absolutely insane!!

This will mean they have to comply with data protection and all sorts of other laws I imagine. The amount of work this will take will just shut down business and stop people selling products. It will just not be worth it, so sad and pointless... arrgghhh i am so angry!!!!

The big 3rd party sellers must be rubbing their hands in glee... people will have to use itunes and amazon to sell their stuff and hand over the huge amount of commission.

I make this sad prediction, but we will see some Nebula developers quit over this, and also some moving to 3rd party distribution just to survive.

There is a small chance the UK GOV will climb down and reintroduce the VAT exemption, there are a LOT of very angry people demanding it.

This seems to explain how the whole mess works in a very easy to understand way for the UK:

http://rachelandrew.co.uk/archives/2014 ... ly-change/
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Re: New EU VAT Legislation from Jan 1st 2015

Postby david1103 » Sat Jan 03, 2015 4:57 am

UPDATE!

How about this as a partial solution?

http://www.jaggysnake.co.uk/2014/12/avo ... al-impact/

The best solution I’ve came up with so far is to continue selling to everyone, but using two different payment gateways.

With my website updated, it now shows 1 out of 2 possible buy buttons for each product, depending on where the visitor is located. If the visitor doesn’t make me liable to MOSS, they get shown the buy button that I’ve always used. But if the visitor is in the EU, they get shown a buy button from a third party that has a low transaction rate, and deals with the burden of invoicing and data storage.
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Re: New EU VAT Legislation from Jan 1st 2015

Postby richie43 » Sat Jan 03, 2015 7:10 am

david1103 wrote:UPDATE!

How about this as a partial solution?

http://www.jaggysnake.co.uk/2014/12/avo ... al-impact/

The best solution I’ve came up with so far is to continue selling to everyone, but using two different payment gateways.

With my website updated, it now shows 1 out of 2 possible buy buttons for each product, depending on where the visitor is located. If the visitor doesn’t make me liable to MOSS, they get shown the buy button that I’ve always used. But if the visitor is in the EU, they get shown a buy button from a third party that has a low transaction rate, and deals with the burden of invoicing and data storage.


Wow, that is very cool stuff! Spread this around!!
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Re: New EU VAT Legislation from Jan 1st 2015

Postby Tim Petherick » Sat Jan 03, 2015 12:18 pm

david1103 wrote:UPDATE!

How about this as a partial solution?

http://www.jaggysnake.co.uk/2014/12/avo ... al-impact/

The best solution I’ve came up with so far is to continue selling to everyone, but using two different payment gateways.

With my website updated, it now shows 1 out of 2 possible buy buttons for each product, depending on where the visitor is located. If the visitor doesn’t make me liable to MOSS, they get shown the buy button that I’ve always used. But if the visitor is in the EU, they get shown a buy button from a third party that has a low transaction rate, and deals with the burden of invoicing and data storage.


Hhmmm,

Interesting. Will look into this for sure...looks like a good way of doing it.
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Re: New EU VAT Legislation from Jan 1st 2015

Postby david1103 » Sat Jan 03, 2015 4:36 pm

Take action!! (copied/pasted from http://onemanbandaccounting.co.uk/eu-vat-changes-2015/ . Some of the links are broken in this copied version, please refer to the original)

What You Can Do. Stop panicking!

I mean that. I can see you.

Panicking is the enemy of action and action is what is going to save our ass.
Action:

1. Keep Up The Pressure To HMRC & The EU
[Update 8:/12/14 The UK is now able to unilaterally suspend implementation of this legislation if they choose to.

Keep up the pressure to HMRC, your MP/MSP, your MEP, the press and on social media tagging the official accounts. Why are the national press not covering this more?

HMRC need our help for them to help us. Make it clear that nano businesses need exceptions at EU level to comply with all the relevant laws (data protection laws, non-discrimination laws, EU wide liability isn’t a good business risk at this level). It is not appropriate for nano businesses to keep identity theft level data for 10 years by law. It is also not currently possible to collect the data until definitions are clearly decided at EU level so the developers (techy people) can code (make) fully compliant solutions.

Focus on revenue (they like that word). The tiny amount of revenue lost by nano businesses having an EU-wide threshold and the benefit to country economies when people can create businesses that provide means to earn an income that keep people off state aid (benefits), enable people to stop claiming state aid (benefits), provide the means to provide care for children and parents so the state doesn’t need to contribute or pay, enables people who have mental health and physical difficulties to become a taxpayer (and stay off state aid). This hits them where it hurts in the coffers.

The UK is a global leader in nano digital businesses because of our high VAT threshold and other countries lose out on that revenue.

Ask HMRC and your politicians why the UK is not unilaterally suspending implementation to allow implementation issues to be resolved (it’s not just about VAT, it’s about data protection too).

We are voters, you are a voter, we are the people helping the government save on its huge education, child care, benefits, elder care and health care bills. I personally as part of my family saved the government around £100k by caring for my father in law. Give them numbers.

2. Make A Fuss To The People With The Power To Make Change
[Update: 8/12/14 PRIORITY: We need EU case studies of how it is affecting businesses in the EU and how businesses in the EU struggle to contribute to revenue because of the higher VAT threshold in your country. If you are in the EU, make yourself heard, they think you don’t exist!

The EU presidency changes to Latvia on 1 January. Do you know businesses in Latvia, are in Latvia and affected by this (as a buyer too), or have contact there? The Latvia presidency is Jana Salmiņa (jana.salmina@mfa.gov.lv)
Write to Pierre Moscovici, EU Commissioner for Economic and Financial Affairs, Taxation and Customs, (pierre.moscovici@ec.europa.eu); Maria Elena Scoppio, EU cabinet member (maria-elena.scoppio@ec.europa.eu); Simon O’Connor, EU Communications Adviser (simon.o’connor@ec.europa.eu); Frans Timmermans, EU First Vice-President, (frans.timmermans@ec.europa.eu); Andrus Ansip, EU Vice-President for the Digital Single Market (andrus.ansip@ec.europa.eu); Jyrki Katainen, EU Vice President for Jobs, Growth, Investment and Competitiveness (jyrki.katainen@ec.europa.eu); Günther Oettinger, EU Commissioner for Digital Economy & Society (gunther.oettinger@ec.europa.eu); Michael Hager, EU Chef de Cabinet (michael.hager@ec.europa.eu)]

Write to the Secretary of State for Business, Innovation & Skills, Vince Cable (details here39)
Write to your MP or MSP and MEP (find out who it is here40 and here41) (send a message here42)
[Update: 8/12/14 Vince Cable has responded to the petition below with ‘the standard line’ showing he has no grasp of the issues. Keep up the pressure.]
Sign43 this petition to uphold the VAT threshold started by Issy Zinaburg

3. Make A Fuss To The Press & HMRC To Show This Has Severe Impact

Contact the newspapers and the BBC. Who do you know who has in-house contacts?
Call, tweet, email and write to HMRC
Get onto the lobbying organisations for businesses, childcare, older people care, expanding the UK economy. This is not just a business thing, it’s a UK economy thing
Contact your local media
[Update: 8/12/4 WHY are the national press not covering this properly? Tell them how mad you are about this! (and yes, you can schedule it in your social media apps )

4. Share, Share, Share!

Share this post
Share articles and blog posts you see on this, get it trending. Get it in Facebook news
Use #vatmoss #vatmess. Use hashtags that are global and Europe wide. This isn’t really a VATMOSS issue. Get it trending and stay trending, UK, Europe, global
Tell everyone you know. If people don’t have any automated digital content then they will have bought it. Plugins, music downloads, wordpress themes, it’s all included, even forum subscriptions and recordings of live webinars
Keep sharing through December
Schedule content about this in your Hootsuite, Tweetdeck, Social Sprout, Buffer
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