"New VAT Rules May Hit ALL Mail Order Products" Topic

This is just a wake-up call if you've not been bothered about the fact that the EU is about to impose draconian and ridiculous new VAT regulations on digital products such as PDFs, ebooks, apps, gaming soundtracks and the like.

As things stand, in around 12 month's time, similar regulations may be applied to ALL cross-border sales. So, if you live in Ireland, and order some miniatures from Bill Bloggs 28s, VAT will be chargeable on those minis even if Bill Bloggs has a business with a turnover way below the UK VAT threshold of £81.00 GBPK.

And Bill Bloggs will have to register for VAT whether he likes it or not, and keep records of all his EU transactions for 10 years, and so on.

"Even worse, they intend to expand the scheme to cover all online shopping, even for physical goods, by January 1st 2016; so this might be one of the last Christmases where you can shop at micro businesses online."
link

So even though it's just a minority of the wargaming industry being hit by these digital regulations right now, the EU steamroller will roll over the entire European hobby at the end of next year.

Just sayin'.

So, by joining the fight to maintain the VAT threshold now, you'll be helping the entire industry for the future.

There's an ongoing Twitterstorm that started yesterday (over 26,000 tweets in a single day aimed at EU legislators), or you can write to your MP, MEP etc.

There's a brilliant site here link , packed with information about what you can do and that explains the #VATMOSS mess. See also link

Henry
MWBG

Sorry to hear that for you all in the EU.

Looks like US sites will be doing banner business, soon.

Seeing my MP on Friday (at his request) on just this point.

--
Martin Stephenson
Vexillia: Wargames Miniatures & Accessories
Shop | Rules | Offers | Facebook | Twitter

Looks like US sites will be doing banner business, soon.

The new rules apply to them as well! It's not a issue of applicability or liability it's a matter of the EU's ability and willingness to enforce the rules outside the EU.

--
Martin Stephenson
Vexillia: Wargames Miniatures & Accessories
Shop | Rules | Offers | Facebook | Twitter

How can the EU enforce rules outside the EU?

Thanks for the heads up, Henry. I wish these clowns would just leave us alone for once.

US retail stores are not required to charge taxes levied by foreign countries.

EU can't enforce jack for international digital sales. Paypal, Google, itunes could though.

excuse my ignorance, but why are they doing this or is it as simple as a money grab?

Someone has to pay for all the free stuff they have going on over there.

As Deep Throat said, "follow the money". That usually explains everything.

It affects the USA from the standpoint that if the EU retailer is required to charge VAT for exports out of Euroland, then the recipient will pay for it regardless of where they live.

"US retail stores are not required to charge taxes levied by foreign countries."

Perhaps, but neither is the EU required to allow the goods in until the VAT is paid.

"EU can't enforce jack for international digital sales."

Don't bet on it. If you're using a credit card and the payment is going to another country, that's trivially easy to track. As for PayPal, well, if they want to keep doing business in the EU, they'd have to toe the line.

Perhaps easy to track, but not easy for another country/region to levy taxes on those outside of their region.

'How can the EU enforce rules outside the EU?'

Well, the US is pretty strong on enforcing their rules outside the US, can't complain if the reverse happens!

Those are very nice. I would just remark that the BEF also used a white square as a recognition marking. This might enliven the model a bit. We won't go into the rivet-counting details of the MKI and MkII carrier.

From what I've read of Toofatlardies' solution to the rules kicking in next month, doing things all-digitally can still be done within the rules (and without the Vat registration business) by manually e-mailing digital copies to those within the EU. Those of us outside the EU can still get things immediately via a download.

Reading between the lines of some conversations I've seen, the new regs have their root in an attempt to put the hook on Amazon's base in Luxembourg.

At this rate, I think I will close down at end 2015 as a lot of my business in European & not worth the headache of being VAT registered.

The problem lies with the number of different parts of the EU's 'machine' that have to have a say in whatever goes on and the restrictive ways in which EU-wide law can be applied.

More often than not we end up with bad law because the system is broken rather than the intent being evil.

Small lobbyist groups can have an effect way out of proportion to their size thanks to holding a 'balance of power' between two larger groups. This is similar to the US in some ways but much more complex due to the large number of political and national interests in the EU.

Postal fees have almost put an end to my export business so it probably won't end up harming me very much, I'll just stop dealing with customers outside the UK. I'm far too small to put up with the trouble.

The other alternative is to just ignore it (like so many other Europeans ignore the bits of EU law they don't like) and carry on as before.

For those who have no idea how a small biz would be impacted:

Tons of papers, correspondence, controls (plenty of rules, many changing and most you don't have a clue of) as here we are talking of potentially every tiny or big state; keeping tabs on customers, who might not tell you the truth,… as it is not your onions.

Suddenly needing an accountant so maybe 1000+2000 a year? or more.

Any time, being subject to a flank attack because something you did or did not, the bloodsuckers have found so they can grab more.
Hundreds of hours lost; a lot of money (for your turn over)either you increase the prices and possibly lose customers, or you reduce your margins…
Many small cottage industry, part timers will just quit. Same with painters, rule writers and more.
Our hobby will be losing so much.

if the EU retailer is required to charge VAT for exports out of Euroland, then the recipient will pay for it regardless of where they live.

Not if a comparable product is available outside Euroland. This is a wonderfully shortsighted way to kill overseas sales.

How can they enforce it? Answer: they can't. Just ignore them. For instance, say I receive a gift from a mate in the UK, and, how curious! I just send a money gift for his little girl's birthday present. What? There was no commercial transaction, so no VAT for you, you bloody money-suckers!

The problem is not the ruling, it is the lack of a threshold level at which the ruling comes into effect.

excuse my ignorance, but why are they doing this or is it as simple as a money grab?

It is because of big companies like Amazon negotiating very low tax rates for themselves in an EU country (I recall hearing of a global delivery service negotiating a 1% tax rate to relocate to Luxembourg) then selling from that country on line and avoiding sales taxes of the countries they are selling in. Starbucks do something similar, I believe.

And the EU will still ask for the taxes to be paid. As has been stated, it will be fairly easy to enforce because it is all paid for electronically – it will not take too many prosecutions of small businesses to make the rest tow the line. They are not going to go for the consumer – they will go for the retailers. retailers will charge the tax at source so they can pass it on to the tax man, so the consumer will have no choice but to pay.

It's a draconian measure aimed at the big boys, and it is a pity that companies with a smaller turnover get hit. However, even though I have been directly effected (Pike and Plunder PDF rules have been pulled from sale) I can see the overall reasons – I just wish they had used a better directed hammer to crack this particular nut.

Someone has to pay for the French to continue their quasi-medieval life style.

Mako said: Looks like US sites will be doing banner business, soon.

Perhaps he might be hinting that US-ians might avoid the VAT by buying domestic?

if the EU retailer is required to charge VAT for exports out of Euroland, then the recipient will pay for it regardless of where they live.

They are not, and they will not be. These changes (both the imminent ones on digital goods, and potential changes later on) are entirely about transactions between two different EU countries. There is no move anywhere in the pipeline to charge VAT on sales to customers outside of the EU.

There are solutions. The current restrictions don't apply if you are doing business to business transactions, only business to customer.

That means if I decide to publish my definitive set of Scifi Skirmish rules for the Battle Against the Moon Spiders (best played using hand carved from hard cheddar 43.5mm figures) and sell it through MY website, I have to Vat register and am required to obtain two forms of confirmation of the place of purchase of the buyer. Not their home territory, but where they bought it….

However, if i decide to sell through an aggregator such as Amazon or DTRPG, it is their responsibility to collect the VAT liable to the purchaser at the rate in the territory in which they purchased the item.

You can also register for VAT on just your digital portion of the business, and the government is also creating a web app to assist in calculating the charges in some way, MOSS, although I confess I know little about it.

As was mentioned by previous posters, this can easily be made a non issue for small businesses by restricting it to digital sales over a threshold. There is a current exclusion threshold of £88.00 GBPK for other VATable goods, so it would make sense to fix it in line with that.

From what I have read online Apple is another company they are trying to target in regards to paying tax

Maybe they need the tax money to raise an army to keep the Russians out.

"More often than not we end up with bad law because the system is broken rather than the intent being evil. "

Intent is almost never evil. Maintaining or creating a broken system is what evil is.

If we just looked at people's intentions evil almost wouldn't exist.

This will just mean Euro manufactures will lose the business, I will stay with UK, US and Australian, shame as there is some good stuff made in Germany, Belgium, Spain and Czech. why should we pay EU tax, they don't pay ours

I suspect a lot of people will sell them through a US-based PDF service to get around the VAT issue, especially if it does eventually impact US customers down the line.

Good to hear that isn't planned currently.

Just so you all don't feel too bad, Burger King is relocating its headquarters from the USA to Canada, to save $1.2 USD billion on their taxes over the next ten years, so lots of people and companies are looking for legal ways to avoid excessive, overly burdensome taxation.

Privateer – this doesn't affect you at all. It's solely about trade between two EU countries.

Privateer – this doesn't affect you at all. It's solely about trade between two EU countries.

No Dom. The point is it will potentially affect anyone who sells to the EU as well as anyone who sells within the EU. It is not solely about trade between two EU countries.

From link

NON-EU BUSINESSES supplying:

1. Business in the EU – No VAT charged.
Customer must account for the tax (reverse-charge mechanism).

2. Consumer in the EU (telecoms, broadcasting or electronic services)- Must charge VAT in the EU country where the customer belongs.

As Martin commented above: "The new rules apply to them [US companies] as well! It's not a issue of applicability or liability it's a matter of the EU's ability and willingness to enforce the rules outside the EU.

If this happens small wargames companies are dead in the water in Europe.

As to Americans, pray TTIP doesn't get signed then as that trade agreement says exactly that…

Mako11, that doesn't work, what you would have to do is sell the rights to the product to the US .pdf service, and then they sell without VAT, but they cannot pay you for ongoing sales even as a royalty without tax.

Privateer, but UK business get screwed on all their EU transactions, which is the growing market in wargames stuff.

Just to clarify: if a company here in the UK that is below the £81,000.00 GBP threshold makes a sale to someone in, say, Italy, then the VAT would be chargeable at whatever the rate is in Italy, not the UK VAT rate.

As it currently stands, if the sale was made to someone in the UK, the threshold here would still apply — so no VAT would be charged.

One of the complications of this #VATMOSS mess is the requirement to keep separate records of UK, EU and non-EU sales and being able to demonstrate at least two forms of proof of where the purchaser lives.

Once again, I urge you to follow the links in my original post to understand the Kafka-esque complexity of this. I'm heavily involved in the campaign against this and so far,the responses we've been getting from HMRC and the European legislators have largely been patronising and/or reveal their own complete lack of understanding of the impact this will have on tens of thousands of micro-businesses.

Henry

One of the Societies I am a member of has just gone down PDF sales for it's latest subscription and are using WargamesVault for our sales. The plus side is they handle the VAT on our behalf the downside is they take a cut of each sale.

We were hoping to sell past issues in PDF on our website but this has now been binned as it is too complicated to do for such a small group. We will have to use a third party to handle the sales for us.

Uncle Groucho – your (2) has been the case for several years – it is not new, and is not part of the imminent changes (although they do affect the way it's administered.) The fact that nobody's even noticed it tells you all you need to know about the practicality and enforcement of it….

As it's immediately under a heading "New rules from 2015" I foolishly imagined that was the case. :-)

As if anything involving VAT would be so straightforward…. ;-)

One of the posts above raises an interesting question. Are society membership fees affected by this?

Well, ummm, what exactly will this do from the consumer perspective? If an American buys a £10.00 GBP pdf, what will the price look like for the American after the new rules are in place?

£10.00 GBP For consumers outside of the EU, this changes nothing. For consumers inside the EU, it means prices changing a little, depending on VAT rates in their country vs the seller's country. It's EU *suppliers* that it really s up.

Depends on what percentage the VAT is in the Country you purchased it from Rebelyell.

EagleSixFive – no it doesn't. Non-EU sales are, and will remain, VAT exempt. All of these changes are about the VAT payable when the buyer is in an EU country, and the seller is in a different country.

This is a crummy situation for UK retailers to be sure. Those with solid ecommerce solutions should be able to handle it.

I use WordPress with WooCommerce. They've preempted this with a FREE plugin that works it all out and handles the verification through a third party for .20 Euros a transaction. It verifies the IP address of the sale and gives you an easy way to download the info for storage. Simples…

Quick video showing how it works

WooCommerce and the 2015 EU VAT Changes to Digital Goods

E-commerce is becoming more complicated all the time, but a good solid solution will stand the challenges thrown at it. WordPress is free, WooCommerce is free for very basic functionality, if you are just selling PDF's you will be able to get by with that, if you are selling physical products a few hundred a year will get you most of what you need though.

The new rules are discouraging for mom and pop shops, but there will be a wave of small time folks making solutions as well.

I'm happy to give anyone advice about using the solutions I mentioned.

Ummm Fergal, where the screw up comes is this:

There is no VAT threshold, so if you sell to a different EU country you now HAVE to be Vat registered with the VATMOSS thing. Do quarterly returns, keep records for 10 years and a whole host of other . The plug-in will help, but not solve the issues.

On the matter of subscriptions, at the moment if there is human intervention in the sale it does not count for VAT, only that that are on-demand (so press a button, get a download etc) so a member ship that had to send you something physically would not be VAT'able.

The biggest issue with the way this has been implemented in the UK is that a whole host of small business that did not used to need VAT registration as they were under the threshold, now have to do VAT on what is likely a small proportion of their sales.

FreddBloggs, I'm not defending the new rules…

I'm not willing to help fix EU regulations, just offer folks ways of running and e-commerce shop that complies. I'm not a lawyer and I don't play one on TV. Just a fellow guy running a small shop that knows a thing or two about how to do things on the web. Take the advice at face value, just an honest offer to help…

"£10.00 GBP For consumers outside of the EU, this changes nothing."

I don't think this is the case. What it does for consumers outside the EU is make less products available. For someone making a small amount of money on some small product, say a guy just publishes PDFs of one ruleset, if there is no lower limit for VAT then he is going to have to do a bunch of PITA stuff instead of just selling it to people.

He might decide that it is not worth it.

This is the big problem with this, not that things will be taxed, but that things that are going to be destructively taxed.

This is the big problem with this, not that things will be taxed, but that things that are going to be destructively taxed.

Perfectly put.

Henry

And the danger of a general price rise to cover the variabilities, so the producer can hold his margins.