VAT MOSS

[Onyx2]

I could've buried this in the questions thread, but I know there are some HMRC switched-on guys (Lister? Chest?) and a few who have published ebooks so thought it deserved broader visibility.

 

VAT MOSS: as far as I understand, as soon as you sell a digital product to someone outside the UK, you pay VAT. Or it may involved filing a quarterly nil return. Or it may involve asking Amazon if they record all the right information on your behalf. I'm not sure, and I'm far from the only one.

 

There's good article on it here:

 

http://onemanbandaccounting.co.uk/eu-vat-changes-2015/

 

"The VAT threshold hasn’t been applied so if you sell even one 99p ebook (or a live programme with only one automated resource) you are affected"

 

As someone who has an ebook on Amazon (plug, plug) and thinking of doing more, I'm concerned this vastly increases my effort for minimal returns. I and many others are considering withdrawing our digital products on December 31st to avoid this.

 

Anyone more clued-up on this issue?

[Your Fight Site]

The way I understand it is, if you sell a product to a customer in an European country, the rate of VAT you charge is that country’s VAT rate. So if you sold to a customer in Sweden, you would charge VAT at Sweden’s rate and not the 20% it currently is in the UK.

 

The furore over it is, because you’re not charging VAT at other countries’ rates, you also have to file returns in those countries too, instead of just paying it all to the HMRC. This is obviously going to increase paperwork and accountancy costs, which is going to hit small businesses and sole traders the hardest just because they say, sold an e-book for 99 pence to someone outside of the UK.

[JNLister]

Amazon Sales

 

As far as I can tell, it's not a problem at all if you are selling via Amazon. They are legally classed as the seller, so they handle the collection and payment of VAT. 

 

With the new rules, they are changing their system so you set the actual price you want an EU buyer to pay. Amazon will then figure out the correct pre-tax price for a buyer in a particular country so that it adds up to your chosen price when you include the VAT. Your royalties are based on the pre-tax price, so the actual amount you get from a sale will now vary slightly based on the specific country the buyer is in. But again, you don't have to do anything yourself regarding VAT.

 

https://kdp.amazon.com/community/ann.jspa?annID=646

 

Direct Sales

 

Once the new rules take effect, then for *direct sales to customers* the system is:

 

* You don't have to collect/charge/pay VAT on any sales in your own country unless total sales there pass a particular threshold (£81,000 a year in UK)

 

* You don't have to collect/charge/pay VAT on any sales of physical goods to another EU country unless your total sales there pass a particular threshold (varies by country, but in the tens of thousands)

 

* You do have to register/collect/charge/pay VAT for each EU country (except your own) where you sell at least one unit of a digital good, which you can do via MOSS. That's a system by which you register with the VAT office in your country, make a single quarterly return and payment to them, then they take care of divvying up the cash and sending it to the other countries:

 

http://www.vatlive.com/eu-vat-rules/2015-digital-services-moss/mini-one-stop-shop-moss/

https://www.gov.uk/register-and-use-the-vat-mini-one-stop-shop

 

Contrary to some reports, HMRC says you can register and use the MOSS service without having to register for/collect/pay normal UK VAT:

 

http://www.telegraph.co.uk/finance/businessclub/11268706/Victory-for-UK-micro-firms-as-HMRC-tweaks-EU-VAT-MOSS-rule.html

 

Or you can just ignore the whole thing and take the chance that the Austrian VAT office won't bother trying to sue or deport you for 20p.

[Onyx2]

Thanks John. A very generously researched answer. I'm glad you were able to make sense of it.

[Ant]

Had to do a double take when I saw the thread title, as I attended a European Commission/HMRC seminar on POSMOSS 2015.

 

As ever John is on the ball.

 

If you have a Business to Business (B2B) relationship with Amazon, Apple etc you don't have any VAT worries, other than the "old"/"normal" VAT rules.

 

If you do make direct supplies to consumers (B2C) you should take action now. I'd highlight if the outcome is taking no action you could be in big trouble, as each member state's penalty and assessment rules apply. As such the German or Italian equivalent of a strong letter from HMRC in the UK may be criminal proceedings and heavy financial penalties.

 

MOSS is probably a good thing for most traders, particularly non multinationals. 1 MOSS account versus a VAT registration in every member state would presumably suit most.

 

The plan is still to have a One Stop Shop where VAT accrues to where a good or services are consumed. Consequently MOSS will like be rolled out to stuff like distance sale of goods in the next few years, and the OECD is keen to extend it to other taxes.

 

Action point - look out and analyse your agreements and contracts now! Feel free to PM me if you have any questions or uncertainties.

[Baz Windham]

This topic scares Russ Abbot, he's got VAT MOSS fear.

[Keith Houchen]

This topic scares Russ Abbot, he's got VAT MOSS fear.

Exceptional.

[John Matrix]

This topic scares Russ Abbot, he's got VAT MOSS fear.

 

[King Coconut]

GOLF CLAP!!!

[John Matrix]

...golf clap.

[King Coconut]

Although I'm ashamed to admit I don't get the Russ Abbot gag...

[Chest Rockwell]

He had a song called Atmosphere, apparently. I didn't get it either until I googled it..

 

It's quite sad that this is the extent of my useful contribution to thread as I was asked my name in the OP. But I don't know very much at all about tax, and apparently even less about Russ Abbot's music career (or indeed who Russ Abbot even is).

[King Coconut]

Of course! I feel so dirty

[Onyx2]

Sorry Chesty, I had it in my head your work was connected to HMRC or taxation or similar. You probably test parachutes or something

[Chest Rockwell]

Haha.. I may have had some tax conversations on here in the past, but only from the perspective of the fact that I and a contractor working through my own Limited company. My accountant does pretty much everything for me and I don't really understand it. They could probably really rip me off if they wanted to.