There’s been some good news regarding the VAT charges on digital sales that was introduced back in January 2015 (more popularly known as VATMOSS).
In case you were unaware, anyone making online digital sales from that date (including music, video, apps etc.) has been obliged to record the geographic location of their customers and then to charge tax if the customer is based in the European Union (EU).
This has been extremely problematic for small businesses, musicians and indie developers etc. due to having to know where their customers are located before they’ve even bought anything from you. It also means we have to constantly monitor and keep up to date with changes in VAT rates across 28 countries and then add that rate to the order at checkout, which means increased prices for most European customers (not to mention lots of admin and changes to our websites).
However, after much campaigning and writing to our MPs (and the incredible hard work of Clare Josa and her team at the EU VAT action group http://euvataction.org) the European Commissioner Pierre Moscovici has finally seen sense and proposed changes to the laws so that businesses making cross-border EU sales under €10,000 will be able to go back to applying the VAT rules for their own country.
For me, this means that I will no longer have to charge VAT to my EU customers meaning everyone will be charged the same price! (And I can be relieved from hours of pointless admin and record keeping!)
However it’s still only a proposal at the moment so even if all goes well, it could still take at least a year until I’ll be able to implement this. So for now I need to continue charging VAT to EU customers. But it’s great news and a complete reversal of what the bureaucrats initially said was a big fuss being made by small businesses.
