Author Topic: EU VAT Changes from January 2015! ALERT (Read 49171 times)

KnowYourOnions · « **on:** December 18, 2014, 06:29 »

For all B2C products in the telecommunications, broadcasting and e-services space - instead of paying the VAT in the country where your company is registered, it will now need to be paid where the consumer resides (If they are from the EU).

http://www.arcticstartup.com/2014/12/16/eu-vat-changes-can-kill-your-startup

Fyletto · « **Reply #1 on:** December 18, 2014, 07:07 »

Sounds crazy. Honestly, I do not know what to say or how to react. We do not have access to the information whoom to were our pictures sold. And if we were to pay individual VAT to each country... It would completly destroy the business...

Microstockphoto · « **Reply #2 on:** December 18, 2014, 07:13 »

With PayPal you can get the buyer country through the API call, and based on that you can apply the correct VAT

Jo Ann Snover · « **Reply #3 on:** December 18, 2014, 10:48 »

http://www.theguardian.com/small-business-network/2014/nov/25/new-eu-vat-regulations-threaten-micro-businesses

http://chrislema.com/vat/

Those links came from another poster in the Envato forum thread about the changes they're making. It isn't as simple as just charging the VAT based on the country from which the buyer is shopping, you would also have to make the VAT payments (and file forms) to each of those countries. That's just insane and certainly (as a US seller) something that makes selling though your own site to anywhere in the EU a real headache.

I'm already thinking of leaving Photo Dune rather than dealing with the hassle of their new world order where your "income" is some large amount of money you never see from which you subtract author fees and buyer fees to arrive at the actual amount of money you received from Envato - it's not enough money to make the tax paperwork worth it if it goes ahead as they're suggesting.

Based on the above, I wonder if other agencies will be starting something similar.

It makes it clear why EU bureaucrats have a bad reputation....did anyone think through just how complicated this makes things?

corepics · « **Reply #4 on:** December 18, 2014, 10:50 »

A minor detail:

AFAIK, This new law applies to when you're buying something as an EU consumer from a business, also located in the EU. VAT regulations on B2B purchases are unchanged.

Microstockphoto · « **Reply #5 on:** December 18, 2014, 11:13 »

How do I know if someone who is purchasing an image through an automated delivery system, if they are a private person or a legal entity?

Jo Ann, if that is true, about having to pay VAT to individual countries, then I am going to close shop.

bunhill · « **Reply #6 on:** December 18, 2014, 11:48 »

Quote from: corepics on December 18, 2014, 10:50

AFAIK, This new law applies to when you're buying something as an EU consumer from a business, also located in the EU. VAT regulations on B2B purchases are unchanged.

Yes US (eg) sites already needed to add VAT at the various different rates. Because EU business customers of (eg) US sites typically need to demonstrate that VAT had been paid when doing their accounts - which is why US stock sites add VAT charges to EU customers.

cobalt · « **Reply #7 on:** December 18, 2014, 12:33 »

this is my main problem that keeps me from selling direct. I really don´t have the time and energy to follow the complicated eu vat system and changes. I´ll happily pay an agency to handle these things for me.

MichaelJayFoto · « **Reply #8 on:** December 19, 2014, 03:54 »

Quote from: Jo Ann Snover on December 18, 2014, 10:48

Those links came from another poster in the Envato forum thread about the changes they're making. It isn't as simple as just charging the VAT based on the country from which the buyer is shopping, you would also have to make the VAT payments (and file forms) to each of those countries. That's just insane and certainly (as a US seller) something that makes selling though your own site to anywhere in the EU a real headache.
...
It makes it clear why EU bureaucrats have a bad reputation....did anyone think through just how complicated this makes things?

I wonder how you charged VAT in the past if you are a US seller. Because factually you already had to do that - you know that, right? Those laws are in place since 2003, and they do not really change for non-EU businesses.

But here is a hint: The new rules (just like the old rules) only apply if you deliver electronic goods to consumers in EU countries. I assume that a large majority of image licensees are factually businesses and not consumers. If you are delivering your product to a business, the receiver is still responsible for the VAT administration.

Therefore, the main thing you need to do is to make sure that you are delivering only to businesses. You can do that by asking for their EU VAT registration number. Any VAT registered business in the EU does have one, so if they can provide it you have enough proof that you are delivering to a business and need not to worry.

ETA: Just in case you are planning to sell to consumers as well - for non-EU businesses there is a simplified process that allows you to apply for a special scheme in a country of your choice and make a simplified VAT accounting quarterly with that country only. It only gets complicated when you start selling for more than €10.000 into one other EU country annually. At that stage you should be able to afford a local tax accountant.

bunhill · « **Reply #9 on:** December 19, 2014, 04:45 »

Quote from: MichaelJayFoto on December 19, 2014, 03:54

The new rules (just like the old rules) only apply if you deliver electronic goods to consumers in EU countries.

Surely that depends on whether the client business is registered for VAT ? In some countries thresholds and exceptions apply/applied. So small turnover businesses may not be registered but then need to be charged. No ?

thesentinel · « **Reply #10 on:** December 19, 2014, 05:08 »

Quote from: bunhill on December 19, 2014, 04:45

Quote from: MichaelJayFoto on December 19, 2014, 03:54
The new rules (just like the old rules) only apply if you deliver electronic goods to consumers in EU countries.

Surely that depends on whether the client business is registered for VAT ? In some countries thresholds and exceptions apply/applied. So small turnover businesses may not be registered but then need to be charged. No ?

Read the comments after the Commissioners statement - and weep

https://ec.europa.eu/commission/2014-2019/ansip/blog/euvat_en

KnowYourOnions · « **Reply #11 on:** December 19, 2014, 05:19 »

Quote from: thesentinel on December 19, 2014, 05:08

Quote from: bunhill on December 19, 2014, 04:45
Quote from: MichaelJayFoto on December 19, 2014, 03:54
The new rules (just like the old rules) only apply if you deliver electronic goods to consumers in EU countries.

Surely that depends on whether the client business is registered for VAT ? In some countries thresholds and exceptions apply/applied. So small turnover businesses may not be registered but then need to be charged. No ?

Read the comments after the Commissioners statement - and weep

https://ec.europa.eu/commission/2014-2019/ansip/blog/euvat_en

Such a great link and comments too - thanks for sharing thesentinel!

We should hope that agencies we submitted our work to do comply with these new EU rules, OR maybe we should ask them directly prior to joining their long curatorial lines.

MichaelJayFoto · « **Reply #12 on:** December 19, 2014, 05:36 »

Quote from: bunhill on December 19, 2014, 04:45

Quote from: MichaelJayFoto on December 19, 2014, 03:54
The new rules (just like the old rules) only apply if you deliver electronic goods to consumers in EU countries.

Surely that depends on whether the client business is registered for VAT ? In some countries thresholds and exceptions apply/applied. So small turnover businesses may not be registered but then need to be charged. No ?

Well. Not sure if that holds true for every EU country but where I live it's if you're not registered for taxes, you're not running a business. For "small turnover" there are special rules that allow them to operate without the VAT administration but in that case you are treated like a consumer in the VAT aspect, true.

So technically it is possible for someone to claim that they are running a "business" but if they have to EU VAT ID to confirm their status, I have to charge them VAT as consumers.

thesentinel · « **Reply #13 on:** December 19, 2014, 05:52 »

Quote from: SSArtist on December 19, 2014, 05:19

Quote from: thesentinel on December 19, 2014, 05:08
Quote from: bunhill on December 19, 2014, 04:45
Quote from: MichaelJayFoto on December 19, 2014, 03:54
The new rules (just like the old rules) only apply if you deliver electronic goods to consumers in EU countries.

Surely that depends on whether the client business is registered for VAT ? In some countries thresholds and exceptions apply/applied. So small turnover businesses may not be registered but then need to be charged. No ?

Read the comments after the Commissioners statement - and weep

https://ec.europa.eu/commission/2014-2019/ansip/blog/euvat_en

Such a great link and comments too - thanks for sharing thesentinel!

We should hope that agencies we submitted our work do comply with these new EU rules, OR maybe we should ask them directly prior to joining their long curatorial lines.

I'm following this due to the music downloads I'm involved with my band, as far as stock is concerned our main agencies should be dealing with this should have no consequences for us but any EU based member selling directly or by using symbiostock etc, needs to be aware of this - though it is quickly changing situation and seems to be interpreted in different ways by different countries. I would imagine some sort of moratorium being announced after the late in the day publicity this is now getting - fingers crossed.

bunhill · « **Reply #14 on:** December 19, 2014, 05:56 »

Quote from: MichaelJayFoto on December 19, 2014, 05:36

So technically it is possible for someone to claim that they are running a "business" but if they have to EU VAT ID to confirm their status, I have to charge them VAT as consumers.

I suspect that the arrogant EU technocrats simply cannot believe that many perfectly viable small businesses are one person operations with a turnover small enough to make them exempt from the requirement to register for VAT - and they have previously done their own accounting etc.

For example, this article at The Guardian (by Carol Tricks - partner at tech City law firm Temple Bright) explains how the poorly drafted and badly implemented EU legislation will negatively affect many small companies in the UK.

The effect of this legislation will be to restrict economic growth. IMO the EU needs to be reinvented as a tax competitive free trade area - instead of designing legislation which favour corporations and makes trade more complicated for everyone else.

ETA: and we're broadly pro EU here btw. So goodness knows how this mess is going to be interpreted by those who are anti EU. It's an own goal for the EU.

KnowYourOnions · « **Reply #15 on:** December 19, 2014, 06:03 »

Q&A - ALL here!

https://taxes.recurly.com/vat/faq

jarih · « **Reply #16 on:** December 19, 2014, 08:45 »

Last nail for my Symbiostock.. I will close my site.

H2O · « **Reply #17 on:** December 19, 2014, 09:08 »

The reason that the EU has this VAT tax is that it is a tax on the individual (companies claim the tax back) they have it as they are unable or unwilling to tax large corporations.

bunhill · « **Reply #18 on:** December 19, 2014, 10:38 »

Quote from: jarih on December 19, 2014, 08:45

Last nail for my Symbiostock.. I will close my site.

I did keep warning in 2013 that the VAT issue needed addressing (and continually got voted down for trying to point it out)

eg http://www.microstockgroup.com/symbiostock-general/symbiostock-script-vat-tax-question/25/

KnowYourOnions · « **Reply #19 on:** December 19, 2014, 11:00 »

"Mini One-Stop Shop...MOSS" might be solution.

http://ec.europa.eu/taxation_customs/taxation/vat/how_vat_works/telecom/index_en.htm

Microstockphoto · « **Reply #20 on:** December 19, 2014, 12:11 »

What if you are not VAT eligible? Some countries offer a VAT free threshold for businesses. You are exempt from collecting VAT below a certain amount of revenue per annum.

KnowYourOnions · « **Reply #21 on:** December 19, 2014, 12:24 »

Quote from: Microstockphoto on December 19, 2014, 12:11

What if you are not VAT eligible? Some countries offer a VAT free threshold for businesses. You are exempt from collecting VAT below a certain amount of revenue per annum.

Yes, for non-EU entity in the UK, if your VAT taxable turnover is more than £81,000 (the ‘threshold’) in a 12 month period you got to pay taxes and have 30 days to do so, once you go over this amount.
https://www.gov.uk/vat-registration/when-to-register

Microstockphoto · « **Reply #22 on:** December 19, 2014, 12:31 »

I meant for EU businesses. What if you are EU business, and are exempt from VAT? Does this EU law apply then?

thesentinel · « **Reply #23 on:** December 19, 2014, 14:09 »

Quote from: SSArtist on December 19, 2014, 12:24

Quote from: Microstockphoto on December 19, 2014, 12:11
What if you are not VAT eligible? Some countries offer a VAT free threshold for businesses. You are exempt from collecting VAT below a certain amount of revenue per annum.

Yes, for non-EU entity in the UK, if your VAT taxable turnover is more than £81,000 (the ‘threshold’) in a 12 month period you got to pay taxes and have 30 days to do so, once you go over this amount.
https://www.gov.uk/vat-registration/when-to-register

The VAT on digital sales to EU countries will kick in from January 1st and has to be applied REGARDLESS of the vat threshold in your country. You have to register with your countries VAT MOSS ("Mini One Stop Shop ')scheme, you have to charge the recipent VAT at the rate that applies in their country. You have to have two agreeing and verifiable pieces of evidence of the country in which the purchaser resides. You have to keep this record for each sale for 10 years and do your VAT MOSS return quarterly ( in the UK at least)

Here is a link to a UK Facebook page on the matter

https://www.facebook.com/groups/DigitalVAT2015/

It is a clusterf**k of massive proportions

Jo Ann Snover · « **Reply #24 on:** December 19, 2014, 14:38 »

Quote from: thesentinel on December 19, 2014, 05:08

Read the comments after the Commissioners statement - and weep

https://ec.europa.eu/commission/2014-2019/ansip/blog/euvat_en

That would be funny if it weren't so scary...

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Author Topic: EU VAT Changes from January 2015! ALERT (Read 49171 times)

KnowYourOnions

Fyletto

Microstockphoto

Jo Ann Snover

corepics

Microstockphoto

bunhill

cobalt

MichaelJayFoto

bunhill

thesentinel

KnowYourOnions

MichaelJayFoto

thesentinel

bunhill

KnowYourOnions

jarih

H2O

bunhill

KnowYourOnions

Microstockphoto

KnowYourOnions

Microstockphoto

thesentinel

Jo Ann Snover

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