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Author Topic: EU VAT and European Photographers.  (Read 4320 times)

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« on: March 09, 2016, 21:59 »
0

I saw Photodune collects VAT in european countries on behalf of us.

I guess THIS is the "before taxes" (higher) value I see in my earnings tab.

But if the photogpher is European (s)he has to pay TWICE ? I mean: with US companies we fill that W8BEN forms to apply for tax treaties. That often means we pay our taxes in our country and NOT in USA.

Now, if I understand well, Envato states they collect VAT and they write off those values from our earnings. (FIRST TAX PAYING)

Then I have to pay taxes in my (European) Country. (SECOND TAX PAYING)

Am I right?

Yes: THIS SUCKS
No: Could you explain to me how does it work?


SpaceStockFootage

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« Reply #1 on: March 10, 2016, 03:01 »
0
The VAT is separate from the whole US tax thing. Envato charge VAT based on the buyers country and then they pay that to the relevant EU tax department. As the VAT doesn't go to you, it's never detailed anywhere on your stats or your statement. The only place it will be documented is on the invoice that the buyer gets. If your photo is showing $5 on the item page, then VAT is added to the $5, rather than being subtracted from the $5. So the buyer will be charged $6 (give or take), Envato subtract the $1 to pay for the VAT, and you're left with the original $5 from which your earnings are calculated based on your commission rate.

 

 
« Last Edit: March 10, 2016, 03:04 by SpaceStockFootage »

« Reply #2 on: March 10, 2016, 05:48 »
+3
Truth is, Envato's cobbled-together "market" scheme does not currently work for European contributors who are liable to charge VAT. There was plenty of discussion on that here when they first implemented it. Like every other responsible EU contributor, I got out of there as fast as possible.

SpaceStockFootage

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« Reply #3 on: March 10, 2016, 06:09 »
+1
Truth is, Envato's cobbled-together "market" scheme does not currently work for European contributors who are liable to charge VAT. There was plenty of discussion on that here when they first implemented it. Like every other responsible EU contributor, I got out of there as fast as possible.

Yeah, that's not something I've really had to look into. Charging VAT is optional in the UK, unless you have a taxable income of over 82K. Fortunately, and unfortunately... I don't earn that much yet.   

« Reply #4 on: March 10, 2016, 06:12 »
+4
Truth is, Envato's cobbled-together "market" scheme does not currently work for European contributors who are liable to charge VAT. There was plenty of discussion on that here when they first implemented it. Like every other responsible EU contributor, I got out of there as fast as possible.

Yeah, that's not something I've really had to look into. Charging VAT is optional in the UK, unless you have a taxable income of over 82K. Fortunately, and unfortunately... I don't earn that much yet.
Sorry, that's wrong, this applies to any sales you make.  There is no VAT threshold.  Was quite a shock when I read it.
https://www.gov.uk/government/publications/vat-supplying-digital-services-to-private-consumers/vat-businesses-supplying-digital-services-to-private-consumers

« Reply #5 on: March 10, 2016, 06:16 »
+2
Truth is, Envato's cobbled-together "market" scheme does not currently work for European contributors who are liable to charge VAT. There was plenty of discussion on that here when they first implemented it. Like every other responsible EU contributor, I got out of there as fast as possible.
I agree, I was out of there as soon as I realised the implications.
I think it also applies to contributors outside of Europe.  This is from here https://www.gov.uk/government/publications/vat-supplying-digital-services-to-private-consumers/vat-businesses-supplying-digital-services-to-private-consumers
Quote
Businesses outside the EU (for example, the USA) that supply digital services to consumers in one or more EU member state are also affected by the changes.

SpaceStockFootage

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« Reply #6 on: March 10, 2016, 06:19 »
+1
Interesting. I'd better look into that. Thanks!

SpaceStockFootage

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« Reply #7 on: March 10, 2016, 06:29 »
+1
This flow chart tells me that I don't have to charge VAT, as all of my stuff is sold through third party websites and/or marketplaces.

https://whitehall-admin.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/415931/VAT_MOSS_Flow_chart_FSB_edit_V1_0.pdf

And the segment that expands on the flow chart says that the marketplace is the one that has to charge and pay VAT. That's what Envato are doing currently, so unless I'm missing something... everything is 'all good in the hood'?

Quote
"If the platform operator identifies you as the seller but sets the general terms and conditions, or authorises payment, or handles delivery/download of the digital service, the platform is considered to be supplying the consumer. They are therefore responsible for accounting for the VAT payment that is charged to the consumer."

« Reply #8 on: March 10, 2016, 06:30 »
+4
That's the problem, Envato were telling us that we were selling direct.

« Reply #9 on: March 10, 2016, 06:32 »
+2
Truth is, Envato's cobbled-together "market" scheme does not currently work for European contributors who are liable to charge VAT. There was plenty of discussion on that here when they first implemented it. Like every other responsible EU contributor, I got out of there as fast as possible.

Yeah, that's not something I've really had to look into. Charging VAT is optional in the UK, unless you have a taxable income of over 82K. Fortunately, and unfortunately... I don't earn that much yet.

If you are licensing intellectual property the sale is where the customer is. You wont have to register for VAT unless your UK sales are more than 82K, or if you license anything through your own site (thanks to that new EU legislation)

That is the problem with Envato, they are trying to claim they are not an agent and you are actually selling direct which would make you liable for VAT whatever your income. Of course you aren't actually selling direct, they are an agent. That is super clear in the government guidelines where the defining characteristics are things like "do you set your own prices?", "Do you control the license?" and so on (paraphrasing as I can't be bothered to look up the page now). But frankly I don't want to be the one to test this in court.

« Reply #10 on: March 10, 2016, 06:34 »
+3

Quote
"If the platform operator identifies you as the seller but sets the general terms and conditions, or authorises payment, or handles delivery/download of the digital service, the platform is considered to be supplying the consumer. They are therefore responsible for accounting for the VAT payment that is charged to the consumer."

Thanks for that, I was typing the same time as you. That is what I mean. Clearly Envato are in the wrong and they are the supplier as far as the UK government are concerned, but they are insisting they aren't (I guess to either dodge some taxes or some of their legal responsibilities).

SpaceStockFootage

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« Reply #11 on: March 10, 2016, 06:41 »
+1
Yeah, if I had to decide between HMRC and Envato when it comes to making decisions on VAT, I think I'd go for HMRC every time! As you say, it's pretty clear in the guidelines that even if you're classed as the seller, if they handle the supply and the site and the licensing... then they're the ones that have to handle the VAT. Envato must have acknowledged and agreed with that as well, as that's what they're doing.

Yeah, the whole 'you're the seller' thing is probably unrelated to the VAT. 

« Reply #12 on: March 10, 2016, 16:51 »
0
It would be nice if Envato wanted to help us everybody to understand this more clearly.

« Reply #13 on: March 10, 2016, 17:13 »
+1
Interesting. I'd better look into that. Thanks!


we'd all better start looking into that: and fight the EU for these tyrannical attempts on our freedoms! It's true that these incompetents "forgot" to apply that usual threshold for the "destroying e-commerce" ruling (it actually appears to be accidental). Effective Jan 2016, this has now been extended to ALL intra-community sales -- hence a "destroying small business altogether" directive, thank you very much.

For details on these new VAT rules, see http://www.euvataction.org/

The EEC (now EU) has been sold to us on promises of "free trade", facilitating Europe-wide movements of goods etc, and making cross-border transactions easier -- quite the reverse is the reality. From Jan 2016 (2015 for "e-commerce"), only sales within Ean U member country are free from these overly onerous extra reporting requirements photographers and other small businesses simply cannot handle. Some Free Trade this is...

Not only is subjecting small businesses to VAT without the usual threshold unfair, but making them slaves to 28 FOREIGN tax departments is forced labour -- and close to torture. (Both are gross violations of Human Rights.)

This is, once again, one of these Eurocrat wet-dreams thought up behind closed doors and not fit for real-life business -- very much like last years shocker with abolishing "freedom of panorama" (which they had to take back, once they realised what a bunch of ignorant w*nkers they are up in Brussels)! What a great job the are doing there (for EUR 12,500 monthly and up each, all funded by our tax -- including VAT -- money).

As for "getting out of there": this doesn't only apply to getting out of *Envato* but getting out of that EUSSR thing on top, also as fast as possible.
« Last Edit: March 10, 2016, 17:45 by stuttershock »

« Reply #14 on: March 11, 2016, 09:18 »
0
Interesting. I'd better look into that. Thanks!


we'd all better start looking into that: and fight the EU for these tyrannical attempts on our freedoms! It's true that these incompetents "forgot" to apply that usual threshold for the "destroying e-commerce" ruling (it actually appears to be accidental). Effective Jan 2016, this has now been extended to ALL intra-community sales -- hence a "destroying small business altogether" directive, thank you very much.

For details on these new VAT rules, see http://www.euvataction.org/

The EEC (now EU) has been sold to us on promises of "free trade", facilitating Europe-wide movements of goods etc, and making cross-border transactions easier -- quite the reverse is the reality. From Jan 2016 (2015 for "e-commerce"), only sales within Ean U member country are free from these overly onerous extra reporting requirements photographers and other small businesses simply cannot handle. Some Free Trade this is...

Not only is subjecting small businesses to VAT without the usual threshold unfair, but making them slaves to 28 FOREIGN tax departments is forced labour -- and close to torture. (Both are gross violations of Human Rights.)

This is, once again, one of these Eurocrat wet-dreams thought up behind closed doors and not fit for real-life business -- very much like last years shocker with abolishing "freedom of panorama" (which they had to take back, once they realised what a bunch of ignorant w*nkers they are up in Brussels)! What a great job the are doing there (for EUR 12,500 monthly and up each, all funded by our tax -- including VAT -- money).

As for "getting out of there": this doesn't only apply to getting out of *Envato* but getting out of that EUSSR thing on top, also as fast as possible.


Roiiiiiiiiight. That's all terribly pertinent.

« Reply #15 on: March 11, 2016, 09:24 »
+3
It is actually, I had to shut down my site the day after the ridiculous new EU legislation came in. It destroyed the chance for any small business in the EU to make direct selling of IP work along side selling through big companies.

It has caused all the problems with Envato for EU contributors too.

SpaceStockFootage

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« Reply #16 on: March 11, 2016, 11:08 »
+1
It is actually, I had to shut down my site the day after the ridiculous new EU legislation came in. It destroyed the chance for any small business in the EU to make direct selling of IP work along side selling through big companies.

It has caused all the problems with Envato for EU contributors too.

At the risk of sounding stupid, I'm not quite understanding what "all the problems with Envato for EU contributors" are. I understand the issue with people selling their own stock through their own websites, but if this is correct (from the HMRC guidance on the whole issue)...

"If the platform operator identifies you as the seller but sets the general terms and conditions, or authorises payment, or handles delivery/download of the digital service, the platform is considered to be supplying the consumer. They are therefore responsible for accounting for the VAT payment that is charged to the consumer."

...then Envato should be charging VAT, and authors shouldn't. And that's exactly what they are doing now, so surely that's correct? I'm probably missing something, sorry!

Tror

« Reply #17 on: March 11, 2016, 11:32 »
+2
It is actually, I had to shut down my site the day after the ridiculous new EU legislation came in. It destroyed the chance for any small business in the EU to make direct selling of IP work along side selling through big companies.

It has caused all the problems with Envato for EU contributors too.

At the risk of sounding stupid, I'm not quite understanding what "all the problems with Envato for EU contributors" are. I understand the issue with people selling their own stock through their own websites, but if this is correct (from the HMRC guidance on the whole issue)...

"If the platform operator identifies you as the seller but sets the general terms and conditions, or authorises payment, or handles delivery/download of the digital service, the platform is considered to be supplying the consumer. They are therefore responsible for accounting for the VAT payment that is charged to the consumer."

...then Envato should be charging VAT, and authors shouldn't. And that's exactly what they are doing now, so surely that's correct? I'm probably missing something, sorry!

I would check back with HMRC directly if you are from the UK. All european countries have a different Situation regarding this. In some it can get terribly complicated, in others its not such a big deal.



« Reply #18 on: March 11, 2016, 12:06 »
0
I'll have to dig out the info but if I remember rightly they are claiming you are the supplier, not them. In which case you are have to be VAT registered and charge VAT under the new rules. They claim to just be a marketplace like ebay, even though they clearly fulfil all the criteria under the law to be the supplier (again it was a while ago that I cared so can't remember the exact details)

SpaceStockFootage

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« Reply #19 on: March 11, 2016, 12:16 »
0
I'll have to dig out the info but if I remember rightly they are claiming you are the supplier, not them. In which case you are have to be VAT registered and charge VAT under the new rules. They claim to just be a marketplace like ebay, even though they clearly fulfil all the criteria under the law to be the supplier (again it was a while ago that I cared so can't remember the exact details)

Yes, I agree that they are claiming that I am the supplier (or it might just be the seller), but I'm pretty sure their reasons for doing so are unrelated to VAT. I mean, they are charging and remitting VAT, which I'm guessing they wouldn't be doing if they didn't have to.


 

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