The Horrible Implications of the EU VAT “Place of Supply” Change
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The Horrible Implications of the EU VAT “Place of Supply” Change
1–10 of 21 posts
Re: The Horrible Implications of the EU VAT “Place of Supply” Change
#2This looks like a nightmare for small European businesses selling digital products. Thankfully I should be shielded from the worst of it it because:
-my business is already registered for VAT
-my payment processor (Avangate) take care of all the VAT issues
Re: The Horrible Implications of the EU VAT “Place of Supply” Change
#3This looks like a nightmare for small European businesses selling digital products. Thankfully I should be shielded from the worst of it it because: -my business is already registered for VAT -my payment processor (Avangate) take care of all the VAT issues
Have Avangate issued anything to customers about the changes? It would be interesting to know how they are dealing with it on behalf of customers.
Currently does the system allow you to sell to VAT registered businesses in other EU countries ex-VAT and deal with the EC Sales list?
Re: The Horrible Implications of the EU VAT “Place of Supply” Change
#4Is this being done to remove competitive advantage some enjoy by being from lower tax countries or is this more of aligning sales of digital product with physical?
Re: The Horrible Implications of the EU VAT “Place of Supply” Change
#5Is this being done to remove competitive advantage some enjoy by being from lower tax countries or is this more of aligning sales of digital product with physical?
My understanding is it is to remove the loophole of companies being based in a country where VAT is lower then selling to consumers - where they need to charge VAT - and the total cost is lower.
Re: The Horrible Implications of the EU VAT “Place of Supply” Change
#6Am I correct in thinking that everything carries on as before if you're a UK based Ltd, VAT registered and the only sales you make to EC based clients are to entities with a VAT number? Basically, the place of supply remains the UK and you report EC sales in your quarterly EC sales list as before?
Re: The Horrible Implications of the EU VAT “Place of Supply” Change
#7Am I correct in thinking that everything carries on as before if you're a UK based Ltd, VAT registered and the only sales you make to EC based clients are to entities with a VAT number? Basically, the place of supply remains the UK and you report EC sales in your quarterly EC sales list as before?
I believe that is correct (but I am not an accountant). But you need to consider what might happen if someone without a VAT number wants to buy from you. Are you just going to refuse? Or perhaps direct them to a reseller?
Re: The Horrible Implications of the EU VAT “Place of Supply” Change
#8This looks like a nightmare for small European businesses selling digital products. Thankfully I should be shielded from the worst of it it because: -my business is already registered for VAT -my payment processor (Avangate) take care of all the VAT issues
Have Avangate issued anything to customers about the changes? It would be interesting to know how they are dealing with it on behalf of customers. Currently does the system allow you to sell to VAT registered businesses in other EU countries ex-VAT and deal with the EC Sales list?
Avangate told me in an email that they will be compliant.
They handle all the collection of VAT and (presumably) do the EC sales list (that's not my problem). I still have to do my own EC sales list for the payments I get from them (but thats only 1 per month) and any sales I make direct (not many).
Re: The Horrible Implications of the EU VAT “Place of Supply” Change
#9Am I correct in thinking that everything carries on as before if you're a UK based Ltd, VAT registered and the only sales you make to EC based clients are to entities with a VAT number? Basically, the place of supply remains the UK and you report EC sales in your quarterly EC sales list as before?
I'm not sure - if you are selling "software as a service" or any other hands-off digital product to (VAT-registered or not) companies in another EU country, then I think you must bill them at their local VAT rate and (possibly) pay that rate to their government's tax collectors (assuming you're above their country's VAT-registered threshold.) I may have read it wrong, though, I'm not an accountant.
Re: The Horrible Implications of the EU VAT “Place of Supply” Change
#10I was interested to see a take on how this affects App Store sales[1]:
"Apple has structured its current agreement so that they act as your agent each time an e-service is downloaded... UK businesses only have one B2B customer, Apple SARL in Luxembourg, so for a vast majority of businesses selling on Apple’s App Store platform, these sales will be continue outside the scope of UK VAT and this change won’t affect them.
"For UK businesses selling e-services on Android/Google Play, the agreement is currently structured in a way that the business sells directly to the EU customer. It will therefore be the businesses responsibility to account for, and collect, the correct amount of VAT based on each customer’s location and pay this over to the local tax authorities."
[1] http://www.jeffreyshenry.com/important-vat-changes-technolog...