Hi Adam, I was also checking around and found the EU website for this (http://ec.europa.eu/taxation_customs/taxation/vat/how_vat_works/telecom/inde...). Actually I am wondering, as this does not seem to apply to businesses (only to consumers). Section "New rules from 2015" state "Business in another EU country" -> "No VAT charged. Customer must account for the tax (reverse-charge mechanism)."
I am not an accountant but to me it looks like, that the new legislation only changes the behavior how you need to charge VAT for private persons, not businesses.
Someone, with a business, had that checked already?
On the other side I am not aware what kind of people are buying the Observium subscriptions (private or business).
Just my 0.02 EUR.
Cheers, Florian
On Sat, Dec 20, 2014 at 1:00 AM, Adam Armstrong adama@memetic.org wrote:
Hi All,
This is mostly only relevant to people within the EU.
In January new EU-wide rules come into effect regarding the collection of VAT on cross-border digital transactions.
Anyone who sells a digital product in the EU will now be required to collect 2 "non contradictory" forms of identification from every customer in order to verify their country of residence. They will then be required to charge that customer VAT at their country of residence's local rate and then pay that VAT to their country of residence's tax collection agency.
This effectively means that you need to know and track the VAT rates in all 28 EU states, as well as ascertain the location of any customer before they can be given a price.
You're not required to retain all of this information for 10 years, and ANY tax collection agency in the EU is now entitled to access to your company's financial records.
This applies to everyone, and has no threshold. Within your own countries, you only collect VAT once you hit a certain threshold, which in the UK is £80k. Under the new rules everyone is required to collect VAT in every other EU country, even if they're not required to collect it in their home country. This also means that even if you're not required to collect VAT in your own country, you still have to register for VAT in your home country and produce VAT returns. You also have to produce VAT returns for EVERY COUNTRY WITHIN WHICH YOU HAVE A CUSTOMER.
In the UK we have a government system which allows us to send a single unified VAT return for all EU countries to our tax collection agency, and they will forward the relevant data on, but I'm not sure if that exists in all countries.
If you're in the EU and understand how truly insane this is, please sign this petition :
https://www.change.org/p/pierre-moscovici-a-unilateral-suspension-of-the-int...
If you're in the UK, there is also this :
https://www.change.org/p/vince-cable-mp-uphold-the-vat-exemption-threshold-f...
The fallout from this is that I may have to suspend sales of Observium subscriptions in the EU starting on January 1st, since I simply don't have the ability to handle the administrative overhead involved. Thanks, adam.
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