Even If You Are Not
Residing In The EU
You May Owe Them Taxes
VAT MOSS is a change in the EU’s rule on taxes that say that taxes have to be paid relative to where the recipient lives – rather than the seller. That potentially puts all other countries “on the line” for paying taxes to the EU when we sell to EU residents and is an extension of the 2003 VAT rules.
It also removes any “minimum sales” and applies to all businesses no matter how small.
There’s a useful piece on Forbes about all of this.
The VAT MOSS law being applied globally is a direct contradiction of the USA’s MarketPlace Fairness Act yet seems as though it may get in under the wire because of our binding Free Trade Agreement with the EU.
1. I’m no lawyer. Always consult yours. (Most tax prepares are as-of-yet unaware of this issue.)
2. Some disagree on whether or not this impacts us as USA citizens. Most BIG businesses are behaving as though it does and that’s a pretty good guide. Google, Amazon, and more have already made substantial changes to their businesses to accommodate this.
3. NO ONE AGREES if this law is even legal in the USA. Lets remember that we dumped tea in the harbor last time the EU tried to tax us. However, we DO have a free trade agreement with the EU that gives them more than a normal amount of power.
This is similar to a country-to-country version of the “nexus” laws that some states in the USA have implemented for online sellers.
4. The law applies to all digital downloadable or shippable style goods but does not directly apply to courses involving live coaching and live hands-on-anything.
5. Affiliate payouts are also important to keep an eye on – as some pay you directly during the initial sales process and can leave you liable for a portion of VAT as well.
5. Most shopping cart apps/scripts/sites are in the process of adding VAT MOSS support. Clickbank already has solid support. JvZoo and WooCommerce are adding it. WP eCart is working on support as well.
This post has a good table of what product types are affect or not affected.
There is also a FB group dedicated to the topic Digital VAT 2015, which you can find here.
Until we have a better handle on how to implement this, many sellers are temporarily halting sales, while others are exploring blocking EU traffic from their sales pages.
If you’re looking for information on a particular sales platform you use – please search within the Facebook group linked above.
I am including some additional resource links below.
Are the VAT changes going to impact your business? How are you preparing for them? Leave a comment below and let the community here know!
~ Kim ~
Related Posts By Other Publishers On VAT MOSS:
- https://twitter.com/search?q=vatmoss&src=typd (Twitter Search)
- https://www.reddit.com/r/Entrepreneur/comments/2nommk/vatmoss_is_a_uk_legislation_coming_into_force_jan/ (Reddit)
- https://fastmember.com/eu-vat-update-how-to-bulletproof-your-business/ (FastMember)
- http://www.zaxaablog.com/new-feature-vat-for-eu-countries/ (Zaxaa)
- http://www.woothemes.com/2014/12/handling-eu-vat-woocommerce/ (WooCommerce)
- https://twitter.com/HMRCcustomers/status/538009984546922497 (Manual Email Exemption)
- EU tax law 2015 Disentangled for Internet Marketers
- https://www.linkedin.com/pulse/more-panic-common-copyright-jill-wigmore-welsh-msc-hcpc-mcsp-cmsuk (Common Copyright)