Handling of VAT in the EU

Andy Barker

Member
Licensed User
Not sure how many of you know about this, care about this, or whether it relates to you.

I came across information about changes to collection of tax within the EU, which will complicate things hugely for a lot of developers. In a nutshell the changes are that the calculation and payment of of VAT will be relative to the customer and not the supplier as from January 1st 2015. So if you sell digital goods, you have to charge your customers VAT at the rate set in their country and then pay that VAT to their tax authority! This is only relevant to B2C rather than B2B sales.

More details can be found here and here.

Selling through Google Play is easier, as Google handle all this for you. However, if you sell e-books or any other kind of digital delivery in the EU, it will most likely affect you.

My wife found this 2 hours after I started creating a web service that I planned on charging for. Thinking again about it now, as I would have to handle this if I took payments directly.

Edited to add start date of January 1st 2015
 
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stevel05

Expert
Licensed User
But presumably you still have to earn above the threshold to have to worry about it at all? Granted earnings from programming may put some in that bracket.
 

Andy Barker

Member
Licensed User
The UK seems to be unusual in that it has a high threshold for registering for VAT (if I read it right, around €17,500 in Germany, €32,000 in France, and £81,000 in the UK). So if you are a self employed person selling electronically delivered items to individuals, then you will quite likely have to register for VAT in your country and then use MOSS (or change your business model).

Going to be a huge problem for a lot of sole traders in the UK. More details in the two links that clarify things. Also plenty of other articles that give more specific examples. All starts January 1st 2015.
 

stevel05

Expert
Licensed User
I didn't realize there was that much disparity across the EU in VAT (it's never and not likely to come knocking at my door, being in the UK) our EU bretheren are in for more of a shock then. I just wonder what happened to the single market we were promised (OK now I'm showing my age).
 

Andy Barker

Member
Licensed User
One thing that has come from this for me venture is the idea of simplifying payments by doing everything via Google. Might mean I get less for each transaction, but the simplicity means a lot less headaches for me. Also could mean more customers, as some will find it more convenient and safe going via Google rather than directly.
 

sorex

Expert
Licensed User
gezez, and thinking that digitalizing things would make things easier. It's even getting worse.
 
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