[IMPORTANT] EU VAT TAX CHANGES

[Sam]

EU Vat Tax law changes were brought in at the start of 2015.

"As of January 2015 if you are selling digital good or services within the EU (regardless of your origin) you must charge VAT at the local rate of the buyer i.e. if you customer is in Italy you charge VAT at the rate for Italy, this applies to businesses and individuals alike." (source)

I am just working our how we, at holderhost, will comply with this draconian law.

It doesn't matter where you are based, if you are selling to an EU customer, you have to charge them VAT at their local rate. You need to collect a certain amount of information on the customer to ensure that they are based in the country they say they are. You then need to file quarterly reports. Luckily, I suppose, they have introduced a One-Stop Shop so you don't have to register for VAT in every EU country (A MOSS system).

I'm not sure whether it affects forum subscriptions or private ad sales - digital services would seemingly encompass everything.

What I am thinking for holderhost:
http://www.revenue.ie/en/tax/vat/moss/index.html
http://www.taxamo.com/

What can the EU do if you are outside of it's jurisdiction?


Put pressure on companies that deal with you such as PayPal to force you to change your ways. 😉

Any thoughts?

 

[Cosmic]

I doubt they are concerned about small websites. This is probably aimed at large ones which have millions of dollars in annual sales.

 

[Sam]

I doubt they are concerned about small websites. This is probably aimed at large ones which have millions of dollars in annual sales.

True but you'll have a filter down affect. If x has to comply then so should y. I'd imagine some people will start reporting those who aren't complying. Otherwise it isn't an even playing field which is what the law is designed to create.

And most countries/ jurisdictions are pretty serious on tax.... Do you really want to risk it?

 

[MasterA]

I saw your topic in the community matters thread and I would like to respond to this.

While, you are correct that if one sell advertise on their forum to EU customers, they need to charge them VAT, there is a simply solution to this problem. Use Buysellads or adsense. Since if one uses buysellads, customers are buying from buysellads and paying them and then buysellads pays that person so buysellads is your customers and it's up to buysellads whether or not they charge this VAT. Hence legally, you are covered and also buysellads is a US company so this doesn't apply. Same logic for adsense.

I guess this law means you can't sell advertisement to members anymore without charging them VAT.

Regarding a forum sponsorship, one can simply not sell it but instead give it to members for free who donates to their forum a certain amount of money. This way they also don't need to pay VAT. If this doesn't work then I guess they will just have to remove it.

Regarding your situation, it's a bit more complex and I need to get back to you on this.

 

[Cosmic]

I doubt they are concerned about small websites. This is probably aimed at large ones which have millions of dollars in annual sales.

True but you'll have a filter down affect. If x has to comply then so should y. I'd imagine some people will start reporting those who aren't complying. Otherwise it isn't an even playing field which is what the law is designed to create.

And most countries/ jurisdictions are pretty serious on tax.... Do you really want to risk it?

If you get reported, what happens then? Nothing, probably. I just don't see what they can do, legally. I also doubt that this will be paid by anyone but a few large companies. It's a lot of paperwork for no reason if you live outside of the EU.

 

[Sam]

Regarding a forum sponsorship, one can simply not sell it but instead give it to members for free who donates to their forum a certain amount of money. This way one also don't need to pay VAT. If this doesn't work then I guess we will just have to remove it.

Regarding your situation, it's a bit more complex and I need to get back to you on this.

That's quite a nice workaround for forum sponsorship actually. You'd just have to ask for donations above a certain amount and those who do receive the rank. 😛 Yeah for webhosting you're pretty much forced to comply unless you simply collect very little client information.

And yes you can't sell ads direct to EU members, without charging VAT, if you have any kind of automated system...

If you get reported, what happens then? Nothing, probably. I just don't see what they can do, legally. I also doubt that this will be paid by anyone but a few large companies. It's a lot of paperwork for no reason if you live outside of the EU.

Well.... As I say in the OP they can put pressure on any company that deals with you... OR they could sign agreements with the US (or in my case NZ) which allow them to force you to collect the tax. That's really it. The EU has been preparing for this law change for years and I'm sure they've thought how it could be enforced.

 

[Jordan]

Regarding a forum sponsorship, one can simply not sell it but instead give it to members for free who donates to their forum a certain amount of money. This way one also don't need to pay VAT.

That my friend is called tax evasion.

 

[CyberFreak]

Regarding a forum sponsorship, one can simply not sell it but instead give it to members for free who donates to their forum a certain amount of money. This way one also don't need to pay VAT.

That my friend is called tax evasion.

Indeed... It is like a supermarket allowing you to walk out with a trolley full of goods after you make a "donation". Just because you change the wording of it a bit, you are still selling something in return for a certain amount of money.

If you get reported, what happens then? Nothing, probably. I just don't see what they can do, legally. I also doubt that this will be paid by anyone but a few large companies. It's a lot of paperwork for no reason if you live outside of the EU.

I can remember all this kind of talk about the EU cookie regulation introduced years ago. End result too many people didn't take notice and nothing seems to have happened since. I imagine that this probably won't come to much in it's current form.

 

[Ashley]

Regarding a forum sponsorship, we can simply not sell it but instead give it to members for free who donates to our forum a certain amount of money. This way we also don't need to pay VAT.

That my friend is called tax evasion.

Indeed... It is like a supermarket allowing you to walk out with a trolley full of goods after you make a "donation". Just because you change the wording of it a bit, you are still selling something in return for a certain amount of money.

If you get reported, what happens then? Nothing, probably. I just don't see what they can do, legally. I also doubt that this will be paid by anyone but a few large companies. It's a lot of paperwork for no reason if you live outside of the EU.

I can remember all this kind of talk about the EU cookie regulation introduced years ago. End result too many people didn't take notice and nothing seems to have happened since. I imagine that this probably won't come to much in it's current form.

What was the EU cookie regulation? That sounds like something that happened before my time on the Internet.