EU marketers, are you aware of this?

149 replies
Starting Jan 1, 2015, digital services such as selling e-books will require the seller to charge the VAT rate of the buyers country. If you live in the UK and sell an e-book to a customer in Sweden, you'll need to correctly charge the Swedish VAT rate (25%) and report/pay it to the UK tax authority.

The seller has to be able to provide at least 2 pieces of evidence that proves the buyer's country of residence (meaning, in practice, that if you're just accepting PayPal payments and don't collect the full address of the buyer, you'll be violating the rule).

I've done a fair bit of research on this, and from what I can see, there are not a whole lot of options for an EU marketer who wants to, for example, sell a WSO. To stay compliant, you'll need to:

1. Collect and verify the address of the buyer and also the IP address
2. Look up the current VAT rate of the buyer's country and charge it (and provide an invoice/receipt that shows it) - UNLESS the buyer is a company, in which case they'll have to provide their valid VAT number, then no VAT should be charged
3. Periodically report the VAT charged to customers in each individual country through a local web portal in your country

As far as I can see, the only feasible way to keep selling digital downloads will be going through a middleman that handles all this (like Clickbank). Or, build your own custom system that handles it all, but then you'd still be responsible for the actual reporting. Simple selling through services like JVZoo will be against the law as you won't be able to correctly charge VAT.

I'd say 99% of EU warriors who are selling WSO's will be in violation of this come Jan 1. Exceptions being anyone who's selling through a middleman like Clickbank.

Personally, I'm outraged. I understand they're trying to level the playing field and prevent large companies from selling from a low-VAT country like Luxemburg, but these large companies will have no real trouble following the rules. For small players like us, however, it's practically impossible.

What are your thoughts?

Here's some more info:
Telecommunications, broadcasting & electronic services - European commission
#aware #marketers #vat
  • Profile picture of the author Jan79
    That will make it very impossible for smaller businesses to operate in my opinion... it almost forces those with ebooks to only sell through services as kindle or clickbank.... And I was about to start selling my ebook soon
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    • Profile picture of the author RichardF
      Originally Posted by Jan79 View Post

      That will make it very impossible for smaller businesses to operate in my opinion... it almost forces those with ebooks to only sell through services as kindle or clickbank.... And I was about to start selling my ebook soon
      I agree. The choice basically boils down to:

      1) Ignore the law and hope to go under the radar
      2) Try to handle it yourself and stay compliant = a huge administrative burden
      3) Use a third-party middleman and pay a hefty fee (usually 9-10% per sale on services like Clickbank)

      I'm also working on a couple of WSO's and I have no idea how I'm going to handle this...
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      • Profile picture of the author SunilTanna
        Actually there's an easy way to handle it.

        Just sell to non-EU countries, or non-EU countries plus the UK. If your offer is in English, you will probably find that is more than 90% of your customers anyway. (Yes EU is supposed to foster trade, which shows how counter productive this policy)

        Alternatively for non-EU, sell via PayPal, etc., but for EU sell via Clickbank.

        Or alternatively read carefully, and if necessary get advice on what is covered, and what isn't. A pure ebook download is covered. But other types of offers may not be. So maybe you can adjust your product offering to EU citizens
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        • Profile picture of the author M Thompson
          Surely if you aren't registered for VAT or your company is domociled outside of the EU this doesn't apply
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          • Profile picture of the author Myles Sinclair
            Originally Posted by SunilTanna View Post

            "........Or alternatively read carefully, and if necessary get advice on what is covered, and what isn't. A pure ebook download is covered. But other types of offers may not be. So maybe you can adjust your product offering to EU citizens
            ebooks are included as items that attract VAT

            Originally Posted by M Thompson View Post

            Surely if you aren't registered for VAT or your company is domociled outside of the EU this doesn't apply
            Unfortunately this won't be the case. - HM Revenue & Customs: Broadcasting, telecommunications and e-services; rule changes from 1 January 2015
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          • Profile picture of the author techservice
            Originally Posted by M Thompson View Post

            Surely if you aren't registered for VAT or your company is domociled outside of the EU this doesn't apply
            Technically you are liable but the really is that unless you are a big operator the authorities are not going to bother you.
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        • Profile picture of the author Graham Maddison
          Originally Posted by SunilTanna View Post

          Actually there's an easy way to handle it.

          Alternatively for non-EU, sell via PayPal, etc., but for EU sell via Clickbank.
          If you watch the video "Who is making the supply (The meaning of Article 9A)?"

          on the HMRC VAT 2015 SeminarHMRC - VAT 2015 London Seminar

          I think you will find you will still be liable if you are selling your products through clickbank if as quoted in the video "you set the terms and conditions"

          They get you all ways.
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          • Profile picture of the author SunilTanna
            Originally Posted by Graham Maddison View Post

            If you watch the video "Who is making the supply (The meaning of Article 9A)?"

            on the HMRC VAT 2015 SeminarHMRC - VAT 2015 London Seminar

            I think you will find you will still be liable if you are selling your products through clickbank if as quoted in the video "you set the terms and conditions"

            They get you all ways.
            Are you saying that you think the cb vendor would be required to collect and report vat on eu sales?

            I can't see how that would work, because

            1. They have no capacity to collect the money (click bank takes the end customer's entire payment).

            2. They don't collect the end customer's country info or financial info (although I guess they could try, they have no way to verify it completely matches the info that cb collected when cb took the actual payment).

            3. Vat depends on the eu end customer's location and the total price that the end customer pays. The vendor doesn't control the end customer's total price (because cb adds vat onto the vendor's base price). Nor does the vendor collect the total price (remember the vendor gets the total price, less vat, less $1+7.5%, minus commissions paid to others advertising the product).

            4. If somehow the cb vendor did figure out how to collect vat from the end customer, and paid vat where the end customer is in the eu, Then the same transaction, with the same end customer, would be vat taxed twice - once with cb collecting vat and remitting it, and once with the vendor collecting and doing it.

            The most important point is I think point 4 - the correct vat is already being collected and paid on the entire transaction - by clickbank. So at least in terms of money paid to the taxman (who actually is supposed to pay it and reports it might be a different issue), the current cb system is correct,


            Incidentally I did try and find the bit you were referring to in your link, but couldn't find it. Can you be more specific,
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            • Profile picture of the author Myles Sinclair
              Originally Posted by SunilTanna View Post



              "............Incidentally I did try and find the bit you were referring to in your link, but couldn't find it. Can you be more specific,
              The presentation refers to it at around 7min 17secs. But then goes on to explain various ways in which the position may be rebutted.

              You are right that this isn't rocket science. It's way more complicated! Lol.
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              • Profile picture of the author SunilTanna
                If the cb vendor is supposed to report vat on eu end customer transactions (which like I said in my last, I can not imagine working, not least because it would mean the vat would be paid and reported twice on each transaction).... But if that were the case,

                I think the solution that I would adopt would be block all eu countries which don't have a substantial threshold: maybe even all eu countries except the uk.

                I guess that an obvious question would what would be the best way to implement that -if it came to that?
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                • Profile picture of the author elviira
                  Ouch. I'm just planning to launch an ebook on my blog page using a WP ecommerce plug. Have to dig in deeper how this affects.

                  By the way, I guess Udemy as third party takes care of this issue as well? I've planned a couple of courses there...
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          • Profile picture of the author ClickBank
            Originally Posted by Graham Maddison View Post

            I think you will find you will still be liable if you are selling your products through clickbank if as quoted in the video "you set the terms and conditions"

            They get you all ways.
            Hi Graham Maddison,

            As a retailer, ClickBank sets the terms and conditions of the sale for the consumer, not the vendor. We are responsible for the transaction with the consumer and have full responsibility for handling VAT taxes and remaining in compliance with EU legislation on these items.

            Thanks,
            The ClickBank Team
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            • Profile picture of the author SunilTanna
              Originally Posted by ClickBank View Post

              Hi Graham Maddison,

              As a retailer, ClickBank sets the terms and conditions of the sale for the consumer, not the vendor. We are responsible for the transaction with the consumer and have full responsibility for handling VAT taxes and remaining in compliance with EU legislation on these items.

              Thanks,
              The ClickBank Team
              The element of doubt I have is whether that is completely true in all cases.

              For example if somebody downloads software or an ebook, it may contain a eula by the author. In the simplest case the author may say you can't resell the item. In a more complicated case, the eula might say you can't dissassemble or alter the software.

              Likewise in a membership site, what a person can do with the content/tools inside may again be specified - by the vendor.

              These are of course more terms of use - rather than terms of sale - but i' m not sure where the distinction lies.
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              • Profile picture of the author Sid Hale
                Originally Posted by SunilTanna View Post

                These are of course more terms of use - rather than terms of sale - but i' m not sure where the distinction lies.
                That is EXACTLY the distinction... license rights do not govern the conditions of the sale. They pertain to the usage of the product AFTER the sale.
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        • Profile picture of the author dwakeman
          Originally Posted by SunilTanna View Post

          Actually there's an easy way to handle it.

          Just sell to non-EU countries, or non-EU countries plus the UK. If your offer is in English, you will probably find that is more than 90% of your customers anyway. (Yes EU is supposed to foster trade, which shows how counter productive this policy)
          Hello,

          Does the VAT tax not apply to the UK?

          This is all so new and could be devastating to a small business.

          Thanks

          David
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          • Profile picture of the author LynnM
            Originally Posted by dwakeman View Post

            Hello,

            Does the VAT tax not apply to the UK?

            This is all so new and could be devastating to a small business.

            Thanks

            David
            Yes, possibly SunilTanna doesn't realise the UK is in the EU?
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            • Profile picture of the author SunilTanna
              My understanding is that if you are in the uk, and you sell to a uk customer, and you are below the uk vat threshold, and if all these conditions apply, then vat does not apply. This is just my layman's understanding, and is not intended as advice - get advice from a qualified professional on your specific circumstances.
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              • Profile picture of the author LynnM
                Originally Posted by SunilTanna View Post

                My understanding is that if you are in the uk, and you sell to a uk customer, and you are below the uk vat threshold, and if all these conditions apply, then vat does not apply. This is just my layman's understanding, and is not intended as advice - get advice from a qualified professional on your specific circumstances.
                Yes, we've been given that concession. The trouble starts when someone from another EU country buys a digital item - just one and we have to register for VAT plus VATMOSS. Plus, during the transaction we're supposed to try and figure out what country the buyer's in, charge the correct VAT rate accordingly, get two pieces of evidence to prove the country* and then keep that info for ten years. Oh, and we're not supposed to block another EU member from buying, as it's considered discriminatory.

                * another small concession for UK sellers is that until June, the tax people will accept proof of country from information supplied by PayPal or a similar processor. After that, who knows?
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                • Profile picture of the author Ian Jackson
                  Originally Posted by LynnM View Post

                  Yes, we've been given that concession. The trouble starts when someone from another EU country buys a digital item - just one and we have to register for VAT plus VATMOSS. Plus, during the transaction we're supposed to try and figure out what country the buyer's in, charge the correct VAT rate accordingly, get two pieces of evidence to prove the country* and then keep that info for ten years. Oh, and we're not supposed to block another EU member from buying, as it's considered discriminatory

                  * another small concession for UK sellers is that until June, the tax people will accept proof of country from information supplied by PayPal or a similar processor. After that, who knows?
                  "Oh, and we're not supposed to block another EU member from buying, as it's considered discriminatory"

                  That is the killer, Lynn. There's software available for discriminating - I installed one to my WP site last week, with the notion of re-jigging my landing page etc.

                  However, as usual it's a one-way discrimination; WE are being discriminated against, but oh, I see, that's ok. These dictats (and many more) are the rules of Communism, in its most recent controlling guise... the EU.
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      • Profile picture of the author ricksherman
        Originally Posted by RichardF View Post

        I agree. The choice basically boils down to:

        1) Ignore the law and hope to go under the radar
        2) Try to handle it yourself and stay compliant = a huge administrative burden
        3) Use a third-party middleman and pay a hefty fee (usually 9-10% per sale on services like Clickbank)

        I'm also working on a couple of WSO's and I have no idea how I'm going to handle this...
        That's a hell of a choice actually.
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    • Originally Posted by Jan79 View Post

      That will make it very impossible for smaller businesses to operate in my opinion... it almost forces those with ebooks to only sell through services as kindle or clickbank.... And I was about to start selling my ebook soon
      that's the point of the 1000's of laws they force on us it's to kill as much of competition and leave insiders who are connected. Thats the goals they just say for the safety, good of all and etc...
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  • Profile picture of the author SunilTanna
    > ebooks are included as items that attract VAT

    Yes. So what? That hasn't changed, it's always been that way.

    The issue isn't VAT, it's whether the seller has to comply with 27 different national VAT requirements.

    The seller only need to comply with 27 different national VAT requirements if the product is delivered entirely as a download. If the seller adjusts his offer, to deliver physical media, or include personalized services, or a bunch of other things, the VAT requirement may switch to the seller's location (1 national VAT requirement) rather than the buyer's.

    I'm not going to interpret the rules for you - a serious seller should read the rules himself/herself, and probably get professional advice on it too - but it is possible for a seller to redesign their offering so that the seller's location applies rather than the buyer's. It's not rocket science.
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    • Profile picture of the author Frank Donovan
      Originally Posted by SunilTanna View Post

      Yes. So what? That hasn't changed, it's always been that way.

      The issue isn't VAT, it's whether the seller has to comply with 27 different national VAT requirements.
      This ^^. If your business is based in the UK and your turnover exceeds the exemption limit (currently £81,000 within a 12-month period) you should already be charging VAT on your eBooks. The change in January 2015 is potentially to the rate of VAT chargeable on sales to non UK countries within the EU.
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    • Profile picture of the author Myles Sinclair
      Originally Posted by SunilTanna View Post

      > ebooks are included as items that attract VAT

      Yes. So what? That hasn't changed, it's always been that way.
      I misunderstood your statement to mean that ebooks were not included in the new regs. My apologies.
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  • Profile picture of the author elcidofaguy
    Wow! Thanks for sharing this!! That is outrageous and totally unpractical to regulate... I've just quickly read up on this and for sure there needs to be some practical workarounds, other than using a middle man like CB....

    I note that the HMRC states that B2B is okay... So I'm clutching at straws here but how about if the purchaser must agree to a declaration that the transaction is B2B - i.e. check box in with appropriate policies, disclaimers etc is displayed... This being a mandatory measure in order to proceed to the checkout... and with clear statement for the end purchaser to be responsible for sorting out their own taxes locally.... Does that make sense?

    Is there a slim possibility that could work? Can anyone with the appropriate legal experience help out here?

    That aside it's going to take some time to figure out how to technically set this up.... There must be some sort of online API service that can provide this additional data which can be integrated to current systems.... For me I'm hoping Paypal may have something in the pipelines...
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  • Profile picture of the author Paul Hancox
    Based on this section here...

    "If you supply digital services to businesses only (including those who are self employed) then these changes do not affect you.
    If you supply digital services to a mix of businesses and consumers, then these changes affect you as far as the supplies to consumers are concerned.

    If your customer does not provide you with a VAT Registration Number (VRN), and you have no other information that suggests that your customer is in business and VAT registered, you can treat this as a B2C supply"


    ...it sounds like you'd need to prove somehow that not only is your customer a business, but that they're also exempt from VAT in their particular country.
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    • Profile picture of the author RichardF
      Originally Posted by Paul Hancox View Post

      ...it sounds like you'd need to prove somehow that not only is your customer a business, but that they're also exempt from VAT in their particular country.
      Correct, you can only treat them as a business and not charge VAT if you can prove that they are in fact a VAT registered business (or outside the EU). Usually done by requesting their VAT number and checking it.
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    • Profile picture of the author elcidofaguy
      Originally Posted by Paul Hancox View Post

      Based on this section here...
      ...it sounds like you'd need to prove somehow that not only is your customer a business, but that they're also exempt from VAT in their particular country.
      For sure agree... Exactly what I was trying to say with trying to place an upfront statement and agreement before making the sale.... Would be great if someone with some legal knowledge to add in here....

      Originally Posted by SunilTanna View Post

      > ... but it is possible for a seller to redesign their offering so that the seller's location applies rather than the buyer's. It's not rocket science.
      - That is also a great point and has me thinking.....
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  • Profile picture of the author Paul Hancox
    It seems like non-EU marketers are affected as well, if they're selling digital stuff to consumers (unless you can prove they're a business).

    Telecommunications, broadcasting & electronic services - European commission

    Scroll down to "New rules from 2015". In that section, they have an example of a NON-EU BUSINESS supplying a consumer in the EU. "Must charge VAT in the EU country where the customer belongs."

    So this is a significant change for a lot of IM'ers whether in the EU or not.
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    • Profile picture of the author RichardF
      Originally Posted by Paul Hancox View Post

      It seems like non-EU marketers are affected as well, if they're selling digital stuff to consumers (unless you can prove they're a business).

      Telecommunications, broadcasting & electronic services - European commission

      Scroll down to "New rules from 2015". In that section, they have an example of a NON-EU BUSINESS supplying a consumer in the EU. "Must charge VAT in the EU country where the customer belongs."

      So this is a significant change for a lot of IM'ers whether in the EU or not.
      Yes, but are marketers in the US, for example, going to care about that? Not likely I'd say, unless they're a big time player.
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      • Profile picture of the author spearce000
        Originally Posted by RichardF View Post

        Yes, but are marketers in the US, for example, going to care about that? Not likely I'd say, unless they're a big time player.
        They should. Tax authorities around the world have a history of going after the little guy rather than big players who can afford expensive lawyers..
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        • Profile picture of the author RichardF
          Originally Posted by spearce000 View Post

          They should. Tax authorities around the world have a history of going after the little guy rather than big players who can afford expensive lawyers..
          Yeah you're right about that. Much easier for them to go after people within the EU though.

          Also, as a privacy-minded person, I have to admit that I hate we're steadily moving towards no way of making semi-anonymous purchases. I like using PayPal because I don't have to give out my address for every little purchase I make, but laws like these prevent that.
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          • Profile picture of the author djtrillian
            Originally Posted by RichardF View Post


            Also, as a privacy-minded person, I have to admit that I hate we're steadily moving towards no way of making semi-anonymous purchases. I like using PayPal because I don't have to give out my address for every little purchase I make, but laws like these prevent that.
            Yeah me too. I friggin hate this prevailing mindset that everywhere you go and everything you do you must prove your identity. It's just the principle of the thing. 'Makes me want to move to an island somewhere away from all this red tape and government meddling.
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  • Profile picture of the author spearce000
    Looks like you have to register here if you're not going to use a 3rd Party like CB or 2CO: https://www.gov.uk/register-and-use-...-one-stop-shop. Alternatively, don't supply anyone in the EU.
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  • Profile picture of the author bemyboss
    think it is very unfair to the individual sellers. It creates unnecessary paperwork and inconveince.
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  • Profile picture of the author goneill
    From my understanding I am going to have to pay US companies 20% VAT extra for my hosting?

    So how do they determine my use UK/USA?, furthermore how do I know if the USA Company will pay
    the VAT to the EU?

    Will Universities/Colleges/Training Org charge VAT for electronic services for online training?

    This new requirement is going to open a can of worms
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    • Profile picture of the author spearce000
      Originally Posted by goneill View Post

      This new requirement is going to open a can of worms
      Absolutely. I've been doing a lot of thinking about this since my last post. I'm not VAT registered and have always kept my turnover below the VAT threshold, but from reading various websites it would seem that the UK is alone in having a VAT threshold, and that other EU countries levy VAT from the first Euro - perhaps other Warriors could correct me if I'm wrong.

      As I see it, the only way to avoid having all this hassle is to sell products via a 3rd party who will take care of all the VAT stuff (it will cost you, but it will cost you to have an accountant sort it all out anyway) and only sell services to customers in the UK and outside the EU, blocking website access to people from continental EU countries.
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  • US Marketers are *ALSO* affected by this if they sell to EU customers: they also need to charge European VAT and they also need to report it to European authorities.

    I know because I got in touch with an international tax lawyer for this precise reason. It's a pain in the ass and, if you want to comply 100% with the laws, there's no way around it.
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  • Profile picture of the author pauljones99
    EU...what an absolute disaster to any business. They are designed to suck the blood form every business. At least USA is all for helping businesses.
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    • Originally Posted by pauljones99 View Post

      EU...what an absolute disaster to any business. They are designed to suck the blood form every business. At least USA is all for helping businesses.
      I agree, but let's not forget that in USA there is a Sales Tax in most states, and you're to charge it as well for a downloadable ebook.
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      • Profile picture of the author Kajova
        Just reading this article:
        http://www.taxation.co.uk/taxation/A...or-opportunity

        It seems the best advice given here is to only sell UK to UK if you're below the £81,000 VAT registration threshold, otherwise your profits will take a huge hit.

        So what are our options? UK to UK and UK to US, then block the rest ?
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        • Profile picture of the author Alexa Smith
          Banned
          Originally Posted by Kajova View Post

          It seems the best advice given here is to only sell UK to UK if you're below the £81,000 VAT registration threshold
          "It must be true: I read it in the Warrior Forum".
          Shall we all just have a nice little sleep, instead of trying to do any business at all, then?

          .
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          • Profile picture of the author Myles Sinclair
            Originally Posted by Alexa Smith View Post

            "It must be true: I read it in the Warrior Forum".
            Shall we all just have a nice little sleep, instead of trying to do any business at all, then?

            .
            Lol. I might hold back on sales and wait for income tax to be abolished! Then I won't have to pay any tax! It was only a temporary tax anyway when we were fighting Napolean. So it must be due to be scrapped any day now, right?
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            • Profile picture of the author Sid Hale
              Originally Posted by Paul Hancox View Post

              It seems like non-EU marketers are affected as well, if they're selling digital stuff to consumers (unless you can prove they're a business).

              Telecommunications, broadcasting & electronic services - European commission

              Scroll down to "New rules from 2015". In that section, they have an example of a NON-EU BUSINESS supplying a consumer in the EU. "Must charge VAT in the EU country where the customer belongs."

              So this is a significant change for a lot of IM'ers whether in the EU or not.
              No... it isn't. They can publish all that rubbish if they want, but they have NO authority to force my business to act as a collection agent for their tax scheme.


              Originally Posted by Anonymous Affiliate View Post

              US Marketers are *ALSO* affected by this if they sell to EU customers: they also need to charge European VAT and they also need to report it to European authorities.

              I know because I got in touch with an international tax lawyer for this precise reason. It's a pain in the ass and, if you want to comply 100% with the laws, there's no way around it.
              Fire your lawyer. You are under NO obligation to foreign tax authorities.

              Originally Posted by Anonymous Affiliate View Post

              I agree, but let's not forget that in USA there is a Sales Tax in most states, and you're to charge it as well for a downloadable ebook.
              Can you provide a link to an authoritative reference on this?

              Originally Posted by Myles Sinclair View Post

              Lol. I might hold back on sales and wait for income tax to be abolished! Then I won't have to pay any tax! It was only a temporary tax anyway when we were fighting Napolean. So it must be due to be scrapped any day now, right?
              - in the U.S. we quit paying taxes to Great Britain around 1776. I'm not about to start collecting/remitting taxes to the European Conglomerate at this late date.
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              • Originally Posted by Sid Hale View Post

                No... it isn't. They can publish all that rubbish if they want, but they have NO authority to force my business to act as a collection agent for their tax scheme.

                Fire your lawyer. You are under NO obligation to foreign tax authorities.

                - in the U.S. we quit paying taxes to Great Britain around 1776. I'm not about to start collecting/remitting taxes to the European Conglomerate at this late date.
                I will not get down to into the details, but I can assure you that you are wrong on all your opinions.

                Have you ever considered why Clickbank, a Delaware-incorporated company, does not charge Sales Taxes to US buyers but it charges VAT to European buyers? Think that through for a moment...

                You might want to actually talk to an international tax lawyer in order to find out how this whole thing actually works. I did, and it opened my eyes.
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                • Profile picture of the author Sid Hale
                  Originally Posted by Anonymous Affiliate View Post

                  Have you ever considered why Clickbank, a Delaware-incorporated company, does not charge Sales Taxes to US buyers but it charges VAT to European buyers? Think that through for a moment...

                  Yes. They provide it as a service to EU sellers.

                  They only collect EU taxes from EU customers - on behalf of an EU merchant.

                  To do this Clickbank must either
                  1. be EU registered (to assume the tax liability),
                  2. remit VAT collected to the merchant (along with suffiecient breakout/reporting), or
                  3. collect the EU merchant's VAT registration number so that they can report the VAT taxes on behalf of the merchant.
                  (Item 3 is comparable to Paypal issuing a 1099 to US merchants.)

                  They cannot collect VAT from a US customer (the customer has no tax liability to the EU).
                  Nor should they collect VAT from an EU customer when the merchant is NOT EU-based (the merchant is not under their jurisdiction and cannot be compelled to collect taxes on their behalf).
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                  • Originally Posted by Sid Hale View Post

                    Yes. They provide it as a service to EU sellers.

                    They only collect EU taxes from EU customers - on behalf of an EU merchant.

                    To do this Clickbank must either
                    1. be EU registered (to assume the tax liability),
                    2. remit VAT collected to the merchant (along with suffiecient breakout/reporting), or
                    3. collect the EU merchant's VAT registration number so that they can report the VAT taxes on behalf of the merchant.
                    (Item 3 is comparable to Paypal issuing a 1099 to US merchants.)

                    They cannot collect VAT from a US customer (the customer has no tax liability to the EU).
                    Nor should they collect VAT from an EU customer when the merchant is NOT EU-based (the merchant is not under their jurisdiction and cannot be compelled to collect taxes on their behalf).
                    Again, you are incorrect.

                    There is no such a thing as EU or US merchant when it comes to Clickbank, because Clickbank *is* the merchant of record, and they are incorporated in Delaware (which is why they dont charge sales tax to most US buyers). They collect the sales tax and EU VAT on their own behalf, not on behalf of the product creator, regardless of where he/she is located.

                    And yes: Clickbank must be VAT-registered in a EU country, and they must report VAT collections from EU buyers to EU authorities. Like I said before, you probably want to have a chat with an international tax lawyer.
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                    • Profile picture of the author Sid Hale
                      I'm not sure what your point is...

                      Originally Posted by Anonymous Affiliate View Post

                      There is no such a thing as EU or US merchant when it comes to Clickbank, because Clickbank *is* the merchant of record. They collect the sales taxes and VAT on their own behalf.

                      And yes: Clickbank must be VAT-registered in a EU country, and they must report VAT collections from EU buyers to EU authorities. Like I said before, you probably want to have a chat with an international tax lawyer.
                      Clickbank essentially confirmed what I said here that of the 3 options I stated, they comply with #1.

                      While they are registered in Delaware in the U.S. They have also registered with some country in the EU. I think that makes them a multi-national. Not the fact that they are selling both in the U.S. and the EU - but that they have registered a corporation in both places.
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                • Profile picture of the author ClickBank
                  Originally Posted by Anonymous Affiliate View Post

                  Have you ever considered why Clickbank, a Delaware-incorporated company, does not charge Sales Taxes to US buyers but it charges VAT to European buyers? Think that through for a moment...
                  Hi Anonymous Affiliate,

                  Actually, we do collect and remit US sales tax for US buyers in different county and city jurisdictions as required by local law. We update the tax rates and collect those sales taxes as laws change on a regular basis. This is part of the value we provide for clients with our platform and services.

                  Thanks,
                  The ClickBank Team
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            • Profile picture of the author AdwordsMogul
              Originally Posted by Myles Sinclair View Post

              Lol. I might hold back on sales and wait for income tax to be abolished! Then I won't have to pay any tax! It was only a temporary tax anyway when we were fighting Napolean. So it must be due to be scrapped any day now, right?
              The issues is not with the tax. The issues is with administering the process.
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              • Profile picture of the author Myles Sinclair
                Originally Posted by AdwordsMogul View Post

                The issues is not with the tax. The issues is with administering the process.
                I understand that. My comment was in response to posts #26 and #27, and was not meant to be taken seriously.
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  • Profile picture of the author Tom Addams
    I'd like your thoughts on an approach I have in mind.

    It appears possible, using PayPal's "Fraud Management Filters," to refuse payment from designated countries.

    Would it not be possible to input the 28 EU countries? This seems an efficient means of dealing with the problem. Though not, of course, a great solution (all those lost countries!) but at least one that has us in compliance. The problem with blocking countries via Plugins or HTACCESS is neither work 100% and they put a huge amount of extra load on the server, as each visitor comes under IP review.

    So what do you think?

    Second question: does it cost us any extra to use this PayPal service? Anyone have a screen grab of what it looks like to a person who's refused?

    GRM
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    • Profile picture of the author goneill
      New Age IM

      1 Please do not pay me, just make a donation to the same value via paypal gift

      2 Please exchange your fiat currency into Bitcoin and send me the Bitcoin and I will send you
      a gift

      3 Join my membership club for annual fee of 1000s (£ / $) which is a charity and I will let you borrow
      what you want but you must return it after 12 months.

      I am sure other Warriors can suggest better ways to beat these Eurocrats.
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  • Profile picture of the author RichardF
    Personally I think the one good thing this might bring is that more alternatives to CB etc may emerge, who handle the whole process since it will no longer be feasible to do it yourself. Perhaps someone will also build a competitor to JVZoo/Warrior Plus that deals with it properly.

    Also, I really hadn't thought of it but worst case a lot of marketers outside the EU will just stop selling to us EU folks (as indicated by some replies in this thread) rather than deal with the potential headache. Not good...
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    • Profile picture of the author Graham Maddison
      Originally Posted by RichardF View Post


      Also, I really hadn't thought of it but worst case a lot of marketers outside the EU will just stop selling to us EU folks (as indicated by some replies in this thread) rather than deal with the potential headache. Not good...
      I need to read a bit more on this, but from what I can tell so far, is that if a business in say the US sells to a business in the UK .. the UK business is accountable for the VAT using what they term as a "Reverse charge"

      I haven't yet finished reading about a US business selling to a EU/UK consumer -- what a minefield ...
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  • Profile picture of the author Jouvan Johnson
    Well this seems like it is going to be a massive pain in the ass. I better get to reading up on what I can do in the new year
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  • Profile picture of the author Graham Maddison
    Great timing

    I am right in the middle of a project developing a dual currency accounting spreadsheet for online entrepreneurs who trade with consumers in other countries .. this is a whole new ball game and I am wondering now whether to cut my losses after already doing a couple of months work on it, or see if I can find a solution that fits the criteria laid down by HM Revenue

    I am not an accountant by any means so I will need to do a lot more reading on the subject.

    Is it worth it?

    When all said and done though, it was only a matter of time before the Tax authorities caught up with the online money makers ..the UK/EU may just be the start of bigger things to come.
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  • Profile picture of the author Graham Maddison
    At the end of the document I saw this:

    Do you have any comments or suggestions?

    We would be pleased to receive any comments or suggestions you may have about this notice. Please write to:
    HM Revenue and Customs
    Place and Time of Supply Team
    100 Parliament Street
    London
    SW1A 2BQ



    Please note this address is not for general enquiries.
    For your general enquiries please call the Helpline on Telephone: 0300 200 3700.


    One thing I have been trying to find out, is anything to do with penalties for non compliance .. how would they enforce this in other non eu countries
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    • Profile picture of the author spearce000
      Originally Posted by Anonymous Affiliate View Post

      US Marketers are *ALSO* affected by this if they sell to EU customers: they also need to charge European VAT and they also need to report it to European authorities.

      I know because I got in touch with an international tax lawyer for this precise reason. It's a pain in the ass and, if you want to comply 100% with the laws, there's no way around it.
      Originally Posted by Sid Hale View Post

      Fire your lawyer. You are under NO obligation to foreign tax authorities.
      If you're outside the US, and sell via Amazon or some affiliate programs, you have to fill out the appropriate tax forms -W8bens etc.. Technically that's an obligation to a foreign tax authority.

      Originally Posted by Sid Hale View Post

      - in the U.S. we quit paying taxes to Great Britain around 1776. I'm not about to start collecting/remitting taxes to the European Conglomerate at this late date.
      You might not have any say in the matter. I'm sure most 3rd party payment processors (and companies like Amazon) will comply anyway.

      Originally Posted by Graham Maddison View Post

      At the end of the document I saw this:

      Do you have any comments or suggestions?
      Any comments I could give would be unrepeatable, and my only suggestion would be where to stick it!
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  • Profile picture of the author Tomwood
    If Eu marketers using warrior payments like this are going to meet these requirements warrior payments will have to make some adaptations

    They will have to gather two pieces of evidence for the customers location the first is easy physical address just by making minor adjustments to the paypal button requirements. The second maybe more probmatic.

    Other useful adaptations they may make included the ability to block certain countries

    Do you think they will do that
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    • Profile picture of the author RichardF
      Originally Posted by Tomwood View Post

      They will have to gather two pieces of evidence for the customers location the first is easy physical address just by making minor adjustments to the paypal button requirements. The second maybe more probmatic.
      I wasn't aware you could actually get the customer's address through PayPal (for non-physical goods). So yeah that's evidence #1. For #2 it looks like the customer IP address is ok to use. However, if those two pieces of evidence contradict each other, like if the customer uses a VPN in another country, you'll be required to gather more evidence. I get a headache just thinking about this...
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      • Profile picture of the author Myles Sinclair
        Originally Posted by RichardF View Post

        "..........For #2 it looks like the customer IP address is ok to use. However, if those two pieces of evidence contradict each other, like if the customer uses a VPN in another country, you'll be required to gather more evidence. I get a headache just thinking about this...
        Yes,information from IP address is not really reliable. So many people now are using anonymous surfing software, and it's only likely to increase.

        I can't really see how this is going to be enforced sucessfully. There has to be countless businesses who are blissfully unaware of the new regs and will simply carry on as they are! It will probably be a bit like the "cookie" regulations that were introduced. I don't see that many sites that actually comply with those regulations, and I suspect that most of those that don't are probably not even aware of them.
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        • Profile picture of the author RichardF
          Originally Posted by Myles Sinclair View Post

          It will probably be a bit like the "cookie" regulations that were introduced. I don't see that many sites that actually comply with those regulations, and I suspect that most of those that don't are probably not even aware of them.
          Hah, I'd forgotten about those cookie laws. So stupid. Not even sure who's responsible for enforcing that? I think it's probably safe for most low-profile websites to ignore them. For this, on the other hand, all it takes is being chosen for a tax audit and you'll be screwed (quite likely to happen at least once in a business lifetime, at least here in Sweden).
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  • Profile picture of the author peter678
    Hi everyone
    Can anyone guide me what will the case of marketers of Bulgaria? It has a low cost structure and now these hurdles. This will disrupt the whole business out there..?
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  • Profile picture of the author Lightlysalted
    What a stupid system, completely drives a horse and cart through small businesses trying to compete on a level playing field.
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  • Profile picture of the author Paul Hancox
    I came across this PDF doc which might (or might not) shed more light on the issue... I'm still going through it.
    http://www.twobirds.com/~/media/PDFs...0ecommerce.pdf

    Ah, fun stuff
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    • Profile picture of the author djtrillian
      Hmmm, where exactly do you find the definition to include e-books?

      The first para is:
      "On 1 January 2015, changes will be made to the European Union (EU) VAT place of supply of services rules involving business to consumer (B2C) supplies of broadcasting, telecommunications and e-services (digital services). A consumer means a private individual."

      But on that page I did not see anywhere a link to a definition of what exactly is meant by 'supplies of broadcasting, telecommunications and e-services'. Now if I was going to just use the most intuitive use of those words my take on it would be things like web hosting, streaming servers, broadband service, this type of thing. I would not imediately think ebooks when hearing the wording in that para.
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      • Profile picture of the author Myles Sinclair
        Originally Posted by djtrillian View Post

        Hmmm, where exactly do you find the definition to include e-books?....."
        It mentions ebooks on Page 8

        A digital e-commerce business model at (1) would include, for
        example, downloading an e-book in return for a fee or online
        streaming services in return for
        a fee.
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    • Profile picture of the author Phil Wilkinson
      Originally Posted by Paul Hancox View Post

      I came across this PDF doc which might (or might not) shed more light on the issue... I'm still going through it.
      http://www.twobirds.com/~/media/PDFs...0ecommerce.pdf

      Ah, fun stuff
      Thanks for that Paul. Having something 'official' to peruse and try to make sense of is much more helpful than all of the "I think...." responses. Much appreciated.
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  • Profile picture of the author MarketingBees
    I'd just go with Clickbank to avoid ANY hassle whatsoever. Selling through Clickbank from the UK means you are trading with the United States as Clickbank is your 'customer' and they then resell it to who you deem to be your customer. However their structure means you are effectively the wholesaler who sells your product to Clickbank.

    What this means is you don't have to limit your turnover to £81k which is a stupid thing to do anyways and it also means all your sales through Clickbank are vat excempt and therefore don't count towards your £81k threshold so all of this EU nonsense (we're certainly not short of it of late) can be put to the back of your mind and forgotten.

    I understand CB fees are hardly the lowest BUT imagine the time saving you'll get by doing it this way and it's the most instant way you can put your business on the right side of the law.

    (that's the advice from my accountant anyways but make sure you get independent advice as I'm not expert).
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    • Profile picture of the author Paul Hancox
      Originally Posted by MarketingBees View Post

      and it also means all your sales through Clickbank are vat excempt and therefore don't count towards your £81k threshold so all of this EU nonsense (we're certainly not short of it of late) can be put to the back of your mind and forgotten.
      Not strictly true, as the customer will still have to pay VAT if based in the EU...but I think you're right about the £81k UK threshold, as you are not selling the product, Clickbank is.
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      • Profile picture of the author Myles Sinclair
        Originally Posted by Paul Hancox View Post

        Not strictly true, as the customer will still have to pay VAT if based in the EU...but I think you're right about the £81k UK threshold, as you are not selling the product, Clickbank is.
        I think you'll find when it comes to VAT, the threshold will be based on YOUR turnover, regardless of the amount sold through Clickbank. So no comfort there I'm afraid.

        Reading the through the thread it would seem that even some accountants are confused by this. So good luck to everybody else! Lol
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        • Profile picture of the author Paul Hancox
          Originally Posted by Myles Sinclair View Post

          I think you'll find when it comes to VAT, the threshold will be based on YOUR turnover, regardless of the amount sold through Clickbank. So no comfort there I'm afraid.
          Let's talk about a hypothetical scenario.

          Let's say your business is entirely through ClickBank, and you sell £250k of product exclusively through them. CB make it clear that they are the sellers of your product.

          Surely that £250k can't be counted as your turnover, because ClickBank are the sellers, not you. It is they who both charge the VAT to customers, and presumably pay it to the taxman.

          So what would be your business turnover in this example? Surely it would be based on the commission cheque they send you, minus your allowable expenses?

          Wouldn't this be your turnover?

          Now an interesting question is... I presume you'd still have to register for VAT after hitting £81k here, even though ClickBank are basically paying the VAT already... and what happens then?

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          • Profile picture of the author Myles Sinclair
            Originally Posted by Paul Hancox View Post

            Let's talk about a hypothetical scenario.

            Let's say your business is entirely through ClickBank, and you sell £250k of product exclusively through them. CB make it clear that they are the sellers of your product.

            Surely that £250k can't be counted as your turnover, because ClickBank are the sellers, not you. It is they who both charge the VAT to customers, and presumably pay it to the taxman.

            So what would be your business turnover in this example? Surely it would be based on the commission cheque they send you, minus your allowable expenses?

            Wouldn't this be your turnover?

            Now an interesting question is... I presume you'd still have to register for VAT after hitting £81k here, even though ClickBank are basically paying the VAT already... and what happens then?

            Your turnover would be the money you receive from Clickbank, plus income from any other sales. You don't get to deduct expenses when calculating turnover. Gross profit is Total sales minus cost of sales. Net profit is Gross profit minus all other deductable expenses.
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            • Profile picture of the author Paul Hancox
              Originally Posted by Myles Sinclair View Post

              Your turnover would be the money you receive from Clickbank, plus income from any other sales. You don't get to deduct expenses when calculating turnover. Gross profit is Total sales minus cost of sales. Net profit is Gross profit minus all other deductable expenses.
              Yeah, sorry... of course. It's curious because in a scenario like the one I outlined, there is essentially nothing "turning over", since you're not doing any actual selling... and yet I presume you'd still have to register for VAT after hitting a certain income level.
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              • Profile picture of the author Myles Sinclair
                Originally Posted by Paul Hancox View Post

                Yeah, sorry... of course. It's curious because in a scenario like the one I outlined, there is essentially nothing "turning over", since you're not doing any actual selling... and yet I presume you'd still have to register for VAT after hitting a certain income level.
                Yes I can see how it would feel like that. But don't forget, you're selling the product to Clickbank, so are the "wholesaler" in the transaction.

                If you need to register for VAT, go out and celebrate, because it will mean you're doing well!
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                • Profile picture of the author Paul Hancox
                  Originally Posted by Myles Sinclair View Post

                  If you need to register for VAT, go out and celebrate, because it will mean you're doing well!
                  Oh, I absolutely agree... under the "old" rules.

                  But looking at the new ones, it seems I only have to make 1 sale (outside of, say, ClickBank) to someone in Sweden*, and I have to register for VAT at least in their country... and that's when the champagne starts to taste a bit off

                  * I picked on Sweden because it appears they don't have a "small entrepreneur scheme" available for a VAT threshold.
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                  • Profile picture of the author Myles Sinclair
                    Originally Posted by Paul Hancox View Post

                    Oh, I absolutely agree... under the "old" rules.

                    But looking at the new ones, it seems I only have to make 1 sale (outside of, say, ClickBank) to someone in Sweden*, and I have to register for VAT at least in their country... and that's when the champagne starts to taste a bit off

                    * I picked on Sweden because it appears they don't have a "small entrepreneur scheme" available for a VAT threshold.
                    That's a fair point. My comment was really in regard to reaching the UK threshold. The new regs is a game changer for those that will be affected by this.
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        • Profile picture of the author SunilTanna
          Originally Posted by Myles Sinclair View Post

          I think you'll find when it comes to VAT, the threshold will be based on YOUR turnover, regardless of the amount sold through Clickbank. So no comfort there I'm afraid.

          Reading the through the thread it would seem that even some accountants are confused by this. So good luck to everybody else! Lol
          I could be wrong, but I believe the 81k turnover threshold in the uk applies to sales in the eea/eu, or at least i think it was a few years ago. So if you sold say 80k to the eu/eea, and 500k to the USA, you might not be required to register for vat.

          (you could still voluntarily register for vat, and perhaps might be required to if some of your eea/eu sales were vatable in the customer's country).

          In any case, this is definitely the sort of thing you should get professional advice on.
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          • Profile picture of the author MarketingBees
            Originally Posted by SunilTanna View Post

            I could be wrong, but I believe the 81k turnover threshold in the uk applies to sales in the eea/eu, or at least i think it was a few years ago. So if you sold say 80k to the eu/eea, and 500k to the USA, you might not be required to register for vat.

            (you could still voluntarily register for vat, and perhaps might be required to if some of your eea/eu sales were vatable in the customer's country).

            In any case, this is definitely the sort of thing you should get professional advice on.
            According to my accountant and a VAT expert he also checked with that is certainly the case.

            So if you were to do let's say... £75,000 in sales through Paypal to the EU and then £750,000 in sales through Clickbank you could in theory not register for VAT.

            It might not make financial sense to not be registered as chances are, you'd probably claim more back than have to pay so end up with a cheque from VAT man BUT if you want to avoid the hassle then there's no need to register.

            (this is my understand anyways, not legal advice in anyway).
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      • Profile picture of the author MarketingBees
        Originally Posted by Paul Hancox View Post

        Not strictly true, as the customer will still have to pay VAT if based in the EU...but I think you're right about the £81k UK threshold, as you are not selling the product, Clickbank is.
        Sorry - I didn't write that clearly.

        I didn't mean the customer won't be charged VAT, I meant you as a vendor wouldn't be doing the charging. The customer will still be charged VAT and will be charged in their country of residence but none of this burdon will come down to the vendor who can just carry on as usual with Clickbank.
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      • Profile picture of the author Tim Bazley
        To think the EU (or the fore-runner of it) was originally set up to make international trade easier!

        Just another example of 'Big' Governments introducing their ever increasingly draconian laws that do no good at all and just hamper the little guy.
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    • Profile picture of the author ClickBank
      Originally Posted by MarketingBees View Post

      I understand CB fees are hardly the lowest BUT imagine the time saving you'll get by doing it this way and it's the most instant way you can put your business on the right side of the law.
      Hi MarketingBees,

      You are correct that our fees are not the same as a payment gateway, but that is in large part because of our role as both retailer and performance marketing platform provider. With respect to this specific EU legislation, we are already compliant and actively collect and remit VAT for specific jurisdictions and territories from which the consumer originates, with proper documentation on consumer point of origin. Likewise, we handle sales tax down to the city/county level within the United States and we update regularly as laws change; this is part of the value that we provide for the $1 + 7.5% markup on products sold with our platform.

      In addition, we also handle all IRS KYC (Know Your Customer) rules and US OFAC (Office of Foreign Asset Control) compliance on behalf of our clients. Conducting business on an international scale can be costly for clients who may not be equipped with the right financial and legal advice. It is essential to know who you do business with and sell to in order to remain in compliance with your country's laws and international laws.

      For a complete list of services that we provide for our markup price, check out our features page.

      Hope this helps.
      The ClickBank Team
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  • Profile picture of the author Paul Hancox
    Just looking at p46 of that PDF doc ("Your pocket guide to VAT on digital e-commerce") I mentioned earlier, it does talk about different VAT thresholds in different countries, i.e. £81k in the UK, 30,000 EUROS in Italy, 17,500 EUROS in Germany, 0 in the Netherlands and Sweden.

    So this made me wonder how these different thresholds apply.

    Also, if you register for the "MOSS" system, you need to register for VAT and therefore have to charge VAT on all your stuff, even if you're below the £81k threshold.

    Yet another great initiative by the EU to "encourage" free trade.
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  • Profile picture of the author flanners
    As far as I am aware, it is illegal to charge VAT in the UK if you are not VAT registered.


    You can register for VAT even if you are not earning anything near the 81,000 GBP threshold, but you then must charge VAT. The point is that by registering, you have formed a legal relationship with HMRC (Her Majesty's Revenue & Customs) and must report all of your VAT attracting Inputs & Outputs - even if you haven't sold or bought anything, you must submit a zero return or risk a fine.



    Adding a tax on top of your price, when you have no legal authority to do so, can land you in a lot of trouble with HMRC.


    I've personally experienced the trauma of a VAT inspection, when my consultancy business was active several years ago. The two inspectors were dark-suited and purely focused on uncovering any mistakes - or crime, as they would probably call it. A very scary time indeed.
    And on the subject of charging VAT when you are not registered, I'm sure that using an excuse with HMRC like "the EU made me do it" will just not wash.
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  • Profile picture of the author SunilTanna
    Sid, you dont need to be a eu based company to have an eu based vat registration. Eu based cb members are trading with clickbank's usa based company. Clickbank's usa company is a non eu based company that sells into the eu marketplace.
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    • Profile picture of the author Sid Hale
      Thanks, Sunil

      Originally Posted by SunilTanna View Post

      Sid, you dont need to be a eu based company to have an eu based vat registration. Eu based cb members are trading with clickbank's usa based company. Clickbank's usa company is a non eu based company that sells into the eu marketplace.
      When I think of the terms "US/EU based company" - I don't think of where they are physically located., but where they are registered to do business. As an example, when we speak of a "Delaware corporation" we are talking about a business who has registered in that state.

      Once registered in a given locality, the taxing authority considers you to be under their jurisdiction, and liable to that taxing authority for collecting/remitting consumer taxes (the whole purpose of the taxing authority in the first place).

      While ClickBank has registered into the EU marketplace, they did it voluntarily. Assuming they have no physical nexus in the EU, they made the decision to do that for their own business reasons (i.e. to better serve their merchants in the EU countries).

      Their decision to do so has NO implications for me/my companies (all US based), either as an affiliate nor as a vendor - which is why I previously posted :
      Originally Posted by Sid Hale

      You are under NO obligation to foreign tax authorities.
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      • Originally Posted by Sid Hale View Post

        Their decision to do so has NO implications for me/my companies (all US based), either as an affiliate nor as a vendor - which is why I previously posted :
        But that is NOT because you are US registered, but rather because you are NOT the merchant of record, Clickbank is, and thus Clickbank does it for you. Why do you think you pay them $1 + 7.5% per transaction?

        Instead, If you were not selling through Clickbank but through your own merchant account (example InfusionSoft, authorize.net, etc) then you would INDEED need to collect and report VAT taxes from EU sales, even if you are US incorporated!

        Again: US registered merchants MUST collect and report VAT from sales coming from EU customers. If you dont believe me, pick up the phone and call an international tax lawyer.
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        • Profile picture of the author RichardF
          Originally Posted by Anonymous Affiliate View Post

          Again: US registered merchants MUST collect and report VAT from sales coming from EU customers. If you dont believe me, pick up the phone and call an international tax lawyer.
          This is correct.
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        • Profile picture of the author Sid Hale
          Originally Posted by Anonymous Affiliate View Post

          But that is NOT because you are US registered, but rather because you are NOT the merchant of record, Clickbank is, and thus Clickbank does it for you. Why do you think you pay them $1 + 7.5% per transaction?
          I haven't sold through Clickbank in well over 5 years.

          Again: US registered merchants MUST collect and report VAT from sales coming from EU customers. If you dont believe me, pick up the phone and call an international tax lawyer.
          By whose authority?
          Payment of VAT is made by the EU customer. It is a sales tax.
          Collection/remittance of said tax is required of the EU merchant, basically acting as an agent for the taxing authority.

          I repeat - There is NO EU country with the authority to require me to act as an agent for them.
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          • Originally Posted by Sid Hale View Post

            I repeat - There is NO EU country with the authority to require me to act as an agent for them.
            At this point, I must question your knowledge when you proclaim your opinion in such a categorical way, since I know for a fact that you are wrong.

            Here is my question to you, Sid: "have you asked and debated this specific topic with an international tax lawyer, or is this just your gutt-feeling opinion?" . A simple "Yes, I have" or "No, I havent" answer will suffice.

            I *know* for a fact that you havent, because I have indeed consuleted with TWO different law firms, one one of them specialized in online affairs, and they both concluded that US merchants must abide to EU VAT collection and reporting while dealing with EU customers.

            I await your "Yes, I have" or "No, I havent" answer anxiously... It is time to bring this debate to a conclusion and to separate what is factual information from what is just an opinion...
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            • Profile picture of the author SunilTanna
              Can we not leave this issue aside?

              Sid doesn't care about VAT rules on his EU sales. He has made that extremely clear. That's Sid's choice, whether wise or unwise.

              But for those of us who do care about VAT rules on EU sales, wouldn't it be more useful to get the discussion back on track - specifically what the rules are, and how to comply whether using ClickBank or other scenarios - rather than arguing with Sid?
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              • Profile picture of the author goneill
                Originally Posted by SunilTanna View Post

                Can we not leave this issue aside?

                Sid doesn't care about VAT rules on his EU sales. He has made that extremely clear. That's Sid's choice, whether wise or unwise.

                But for those of us who do care about VAT rules on EU sales, wouldn't it be more useful to get the discussion back on track - specifically what the rules are, and how to comply whether using ClickBank or other scenarios - rather than arguing with Sid?
                I would have to agree with SunilTanna on this. I feel that this thread has been both informative and very usefull
                in addressing a serious problem for us UK IM.Hopefully we will be able to address this VAT problem in the near future.
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  • Profile picture of the author Sid Hale
    I too, agree that it is an EU problem, and did not initially respond at all in this thread.

    I didn't post until someone made a statement that US sellers are also liable for the collection of EU taxes.

    What is needed is a tax attorney - not a tax accountant.

    To collect/remit VAT, you MUST register with the EU taxing authority.
    The EU has NO jurisdiction over a US business that has NOT so registered.
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    • Profile picture of the author goneill
      First I would like to thank all the posters on this thread for their input, which has been both educating and valuable.


      My take on this is from a UK based person operating out of the UK selling products worldwide but
      Not registered for UK VAT.

      So initially my obligations are that I must comply with UK VAT rules and they are:

      1. I must register for VAT if my turnover will or exceed £81,000 per year.

      2. If someone from outside of the EU purchases one of my products they can reclaim the VAT
      From the UK Custom and Excise

      3. As far as ClickBank go, they are resellers of your product and if you supply them with £81,000
      of products you should in theory be charging them (Clickbank) the current rate of 20% VAT?
      (I have never heard that it possible to abdicate your responsibilities to collecting VAT in the UK)

      4 In item 3 above if you are supplying ClickBank and the total value of goods supplied is below the
      Self registration level for VAT then ClickBank is acting on its own behalf (business) and collecting
      VAT for its own business.

      5 Which brings into question why are you paying fees to ClickBank if you are not responsible for
      Collecting VAT?

      Some of you may say that the new EU directive that comes into force Next year overrides current
      UK rules on VAT. I beg to differ as the UK can adopt or modify VAT rules e.g. as mentioned different rates of VAT throughout Europe and in the UK we zero rated products such as food, children's clothing.

      I was also under the impression that the UK government has to announce changes in VAT tax in the budget April/May and proposed future changes in the Autumn Budget. This EU directive contradicts current UK rules and proposes imposing new rules on one business sector.

      PS
      I would also agree with Sid post above
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      • Profile picture of the author SunilTanna
        Originally Posted by goneill View Post

        First I would like to thank all the posters on this thread for their input, which has been both educating and valuable.


        My take on this is from a UK based person operating out of the UK selling products worldwide but
        Not registered for UK VAT.

        So initially my obligations are that I must comply with UK VAT rules and they are:

        1. I must register for VAT if my turnover will or exceed £81,000 per year.

        2. If someone from outside of the EU purchases one of my products they can reclaim the VAT
        From the UK Custom and Excise

        3. As far as ClickBank go, they are resellers of your product and if you supply them with £81,000
        of products you should in theory be charging them (Clickbank) the current rate of 20% VAT?
        (I have never heard that it possible to abdicate your responsibilities to collecting VAT in the UK)

        4 In item 3 above if you are supplying ClickBank and the total value of goods supplied is below the
        Self registration level for VAT then ClickBank is acting on its own behalf (business) and collecting
        VAT for its own business.

        5 Which brings into question why are you paying fees to ClickBank if you are not responsible for
        Collecting VAT?

        Some of you may say that the new EU directive that comes into force Next year overrides current
        UK rules on VAT. I beg to differ as the UK can adopt or modify VAT rules e.g. as mentioned different rates of VAT throughout Europe and in the UK we zero rated products such as food, children’s clothing.

        I was also under the impression that the UK government has to announce changes in VAT tax in the budget April/May and proposed future changes in the Autumn Budget. This EU directive contradicts current UK rules and proposes imposing new rules on one business sector.

        PS
        I would also agree with Sid post above
        I'm pretty sure 2+3 are wrong in the ClickBank case.

        Reclaiming VAT applies if somebody purchases a good in the UK (say), and then takes it overseas.

        My understanding is ClickBank is outside the EU when they make purchase, so does not need to pay VAT on the digital/service purchases they make from vendors (us) from the EU, since the goods aren't being supplied in the EU. And we aren't obligated to collect VAT on such purchases.

        However when ClickBank sells back into the EU, they do need to collect VAT on end-customers purchasees from them, and remit payment to various EU VAT authorities, and have done so for some years.
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    • Originally Posted by Sid Hale View Post

      I didn't post until someone made a statement that US sellers are also liable for the collection of EU taxes.

      To collect/remit VAT, you MUST register with the EU taxing authority.
      The EU has NO jurisdiction over a US business that has NOT so registered.
      Ok, enough of misinformation. You could potentially cost HUGE problems to warriors and info product merchants with your incorrect statements.

      Here's a quote from Price Waterhouse Coopers (I hope you believe THEIR posts, since you didnt believe mine) :

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      • Profile picture of the author goneill
        Thanks AA for posting your reply.

        I am curious as to when you came across this article, as the last but one paragraph is referring to May 1 2004. Besides that query, I am becoming more confused as to what is the correct and legal situation.

        As you say there are huge problems and cost if you do not get it right. Thanks again for your article.
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        • Originally Posted by goneill View Post

          Thanks AA for posting your reply.

          I am curious as to when you came across this article, as the last but one paragraph is referring to May 1 2004. Besides that query, I am becoming more confused as to what is the correct and legal situation.

          As you say there are huge problems and cost if you do not get it right. Thanks again for your article.
          I wont give advice since Im not a certified tax attorney.

          But I will repeat what I stated in a previous post: I consulted with 2 different tax attorneys, one of them specialized on internet affairs, and they both confirmed to me that US-registered digital product internet merchants are also obliged by EU VAT laws when selling to a EU customer. Again, this is NOT my opinion - this was the response from 2 different cerified US-based tax lawyers.
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          • Profile picture of the author Myles Sinclair
            Originally Posted by Anonymous Affiliate View Post

            I wont give advice since Im not a certified tax attorney.

            But I will repeat what I stated in a previous post: I consulted with 2 different tax attorneys, one of them specialized on internet affairs, and they both confirmed to me that US-registered digital product internet merchants are also obliged by EU VAT laws when selling to a EU customer. Again, this is NOT my opinion - this was the response from 2 different cerified US-based tax lawyers.
            All the documentation that I've read regarding this matter supports everything you have said in this thread.

            I haven't been able to find much information concerning enforcement for businesses outside of the EU that fail or refuse to comply. Those of us in the EU will risk fines for being in breach of the regulations, but it is not clear what the response will be to non EU companies that don't comply.

            From the information I have seen it appears that the EU authorities are looking in the first instance for voluntary compliance from US business and those in other non EU countries. This doesn't mean however that the EU has no powers to enforce its new regulations for businesses that won't comply.

            They may not have the power to levy fines outside of its borders, (although that may depend on whatever agreements between governments are in place) However, they could ultimately block downloads from companies who don't comply, making it impossible for those affected to sell their digital goods within the EU. That's just conjecture on my part, but they will definitely have some measures available to ensure compliance.
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            • Originally Posted by Myles Sinclair View Post

              All the documentation that I've read regarding this matter supports everything you have said in this thread.

              I haven't been able to find much information concerning enforcement for businesses outside of the EU that fail or refuse to comply. Those of us in the EU will risk fines for being in breach of the regulations, but it is not clear what the response will be to non EU companies that don't comply.
              Like anything related to tax laws, and more specifically not complying with them, I guess that it all depends on how low you fly under their radar, your transactional volume, etc. I would not be surprised if, once your volume is significant, you might trigger a red flag in someone's screen... and it's anyone's guess what happens from there.

              The law is clear: US merchants are subject to EU VAT laws when selling downloadable digital products to EU customer. No doubt about that. How will they enforce it should you not comply? hang me if I know
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  • Profile picture of the author Raja Abdulla
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  • Profile picture of the author Mathiesen
    If I live in South Asia and sell my e-books in UK and Europe then do I need to follow it also??
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    • Profile picture of the author RichardF
      Originally Posted by Mathiesen View Post

      If I live in South Asia and sell my e-books in UK and Europe then do I need to follow it also??
      According to the EU, yes. Whether you believe they'll be willing, or able, to enforce it is another question...
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      • Profile picture of the author goneill
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        • Profile picture of the author Diana Lane
          Originally Posted by goneill View Post

          The article mentions a petition - the direct link to that is here...

          https://www.change.org/p/vince-cable...gital-products
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          • Profile picture of the author Juliawriter
            Originally Posted by Diana Lane View Post

            The article mentions a petition - the direct link to that is here...

            https://www.change.org/p/vince-cable...gital-products
            This is an EU Law and the UK Government can do nothing about it at all. They AGREED it almost a year ago. They have just sat on it. The French were made to pushup VAT on books from 3 -5% to 20% so they comply with other countries. This is a ruddy minefield and as someone who used to run a VAT registered business I certainly would not do anything against the Tax Rules of any country.
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            • Profile picture of the author Graham Maddison
              Originally Posted by Juliawriter View Post

              This is an EU Law and the UK Government can do nothing about it at all. They AGREED it almost a year ago. They have just sat on it. The French were made to pushup VAT on books from 3 -5% to 20% so they comply with other countries. This is a ruddy minefield and as someone who used to run a VAT registered business I certainly would not do anything against the Tax Rules of any country.
              looks like the petition worked ..

              Victory for UK micro firms as HMRC tweaks EU VAT MOSS rule - Telegraph

              Still a minefield though!
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              • Profile picture of the author spearce000
                Originally Posted by Graham Maddison View Post

                looks like the petition worked ..

                Victory for UK micro firms as HMRC tweaks EU VAT MOSS rule - Telegraph

                Still a minefield though!
                I suppose it's a step in the right direction, but businesses are still going to have to register for VAT in the UK, just not collect it on their UK sales if they're under the threshold. That means you'll still have to fill out all the paperwork etc., and once you're registered you're registered.

                Consider this scenario for a moment:

                Let's say the EU challenges this decision by HMRC and takes them to the European Court - and wins. The process could drag on for years. After their defeat, HMRC could be ordered to backdate VAT collection from "micro businesses" - meaning anyone selling digital goods to UK customers could face a hefty VAT bill years after the sales have gone through. True, you would be able to backdate VAT claims as well, but most people would owe considerably more than they would get back.

                Speculation? Yes. Likely? Well, let's just say (knowing how things work in the EU) it's the sort of thing that could happen.

                Alternatively, there's nothing to stop a future Chancellor of the Exchequer from doing something similar after the election.

                Personally, I've decided that from January 1st I'm going to funnel any non UK EU sales through a 3rd party processor like 2CO and let them have all the hassle. It will cost me in higher transaction charges, but it will be worth it. I've e-mailed PayPal and asked them how I can go about blocking continental EU and Irish IP addresses. I don't get much business from EU countries anyway - most of my clients are in the US, Australia, and Singapore etc.

                Incidentally, I got an e-mail from Amazon yesterday telling me that all Kindle books must now be priced inclusive of VAT, so the VAT will come out of the profit margin .
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            • Profile picture of the author Ian Jackson
              Originally Posted by Juliawriter View Post

              This is an EU Law and the UK Government can do nothing about it at all. They AGREED it almost a year ago. They have just sat on it. The French were made to pushup VAT on books from 3 -5% to 20% so they comply with other countries. This is a ruddy minefield and as someone who used to run a VAT registered business I certainly would not do anything against the Tax Rules of any country.
              Sadly Juliawriter, I don't think it would have made any difference if our UK Government had disagreed... as with so many other poisonous laws, we're run by those control-freaks in Brussels now and there bu**er all we can do about it.
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  • Profile picture of the author markowe
    Victory for UK firms, but I am not sure about the rest of us. I am non-EU-registered, and in addition to selling digital downloads I sell "tangible" services all over the world (as a translation agency), all of them rendered in my country, not in the buyer's country.

    It has never occurred to me before that I should be charging VAT on sales in the EU - not least because I would already have to include VAT at my end for export sales (were I VAT-registered in my country, which I am in fact not as I am below the local threshold), so I am seriously confused - charge VAT twice, I think not!?

    It's a MAJOR headache for small companies that just do not have the resources to worry about all this stuff. Just tell me where to pay tax and I'll pay it, but don't make me become a tax expert or pay an accountant half my annual profit to figure it out for me.
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  • Profile picture of the author funprojects
    Hello, guys! I suppose the way out would be to bundle up the digital product with a human element: LIVE webinar training, a personal touch, sort of. That might change the way Udemy functions, and WSO's are offered.

    According to the HRMC, in 1.1. the definition of digital services is "1.1.3 E-services
    Includes video on demand, downloaded applications (or ‘apps’), music downloads, gaming, e-books, anti-virus software and on-line auctions." Towards the middle of the page (1.9):

    Examples of commonly encountered exemptions when determining the place of supply
    Where education, training, or a similar service is delivered by a person over the internet or an electronic network (such as a webinar), this isn’t considered to be an electronically supplied service. Therefore, for this type of service the current VAT place of supply rules won’t change on 1 January 2015.

    Unlike webinars or distance learning, automated learning doesn’t involve any human involvement and is considered to be a digital service. Therefore for any B2C supplies, on 1 January 2015 the place of supply will change from the supplier’s place of establishment to the customer’s place of establishment.

    For examination services (for example, marking or assessing completed examination papers) the place of supply will depend on whether or not the service requires or involves any human intervention. If for example, a student is required to complete and submit an online examination paper which is automatically checked and scored by computer, this is a digital service which means that on 1 January 2015, for B2C supplies the VAT place of supply will change to the customer’s place of establishment. However, if the service involves the completed examination paper being marked or assessed by an assessor, for B2C supplies the place of supply will remain the place where the service is performed.

    The table below shows examples of typical supplies of B2C education or examination services, and the current and new rules:
    I understand this, as long as there is personal intervention (skype/webinar session; personalised checklist stamped with the name and the email of the customer; dunno - might be off base here), the rules won't change.

    Extra care should be taken perhaps to specify what constitutes "dominant part of the product", as in 1.10 they write about bundled products:
    1.10 Bundled supplies
    A digital supplier must apply the normal approach to bundled or package supplies. So if you make a supply of a physical product which is ‘bundled’ with a product that is accessed digitally (for example), then the place of supply rule changes will only apply to the digital element of the supply if this is seen as a supply or the dominant part of the bundle.
    Are there any lawyers around?
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    • Profile picture of the author Paleochora
      As someone mentioned earlier, it is not the tax that is the issue. VAT is added to a retail price and collected by the vendor and remitted to the relevant tax department, so it is only a collection obligation for the vendor...the tax is being payed by the customer. The VAT MOSS scheme does make it easier than having to register for VAT in all EU countries and put in VAT returns to each one individually.

      The sticky thing here, though, is how to administer it and prove that sales are or are not B2C EU sales. Collecting the relevant data may be feasible for large companies like Amazon with hoards of IT departments but will prove very difficult for microbusinesses.

      The only possible solution I have found to that whole mess is this enterprising bunch Taxamo - 2015 EU Vat Changes for B2C - EU Vat Compliance Solution

      They do the whole accounting & admin for you for a relatively small fee (only B2C transactions in the EU are counted for the fees). I have no idea, though, how this would handle instant affiliate commissions that do not fall under this new law.

      For sellers inside - but especially outside the EU, using a third party seller like Clickbank would make things very easy indeed.
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  • Profile picture of the author goneill
    Hi All

    Latest Update / Confirmation from UK Government

    Link :Change.org

    Not much different from what has already been said in forum?

    George
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  • Profile picture of the author goneill
    Here is another update about a twitter protest

    https://www.change.org/p/vince-cable...n_update_email
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  • Profile picture of the author Nail Yener
    I have been following this topic on many other websites including the latest Change.org petition, which I already signed:

    https://www.change.org/p/pierre-mosc...d-sole-traders

    This one is for the EU authorities. The previous petition also linked in some above comments was only for the UK authorities.

    I guess I had a big misconception about how the new rules will affect non-EU sellers who sell to EU consumers. Please check the following page which is the official EU page that explains the current rules and upcoming changes:

    Telecommunications, broadcasting & electronic services - European commission

    When you compare the "Current Rules" and "Rules from 2015" tables, you will notice that nothing will change for non-EU sellers. Only the EU sellers who sell to other EU countries will be affected by the new rules in terms of how they charge VAT.

    So, what is being discussed in this thread regarding the non-EU sellers having to charge VAT according to the consumer's country has already been in effect I don't know since when. And as far as I understand, nothing changes for the non-EU sellers.

    I mean it seems to me that the new rules change things but only for the EU sellers. Can anyone who has a deeper knowledge about the topic comment on if the new rules will change anything for the non-EU sellers (comparing current and upcoming rules)?
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  • Profile picture of the author goneill
    Here is the latest responce to the twitter campaign

    Link:
    https://www.change.org/p/vince-cable...ate&utm_medium

    Please note that this is part of a wider issue as you will see in the links that there is a reference to apply this strategy to on line goods in 2016. I hope that you register with the various campaigns to protect your business now and for the future. (it only takes an email)

    Thanks
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    • Profile picture of the author pixelware
      Here is great little graphic which sums up this whole mess:

      How the EU #VATMOSS changes will affect my cartooning business

      It isn't just us IMers that are worried! A blow to all of us trying to supplement our income.
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      • Profile picture of the author funprojects
        Looks like Clickbank and/or PayPal have solved this problem: try buying something online, and you get hit with a price increase at checkout. This is annoying, and as a result, I didn't go ahead and buy the things I was going to. I also cancelled the 2 hosting subscriptions I had with US host providers and moved the sites closer to home.

        I just wonder, are they building Digital Fortress Europe or Digital Prison Europe?
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        • Profile picture of the author goneill
          Hi Funprojects

          Good comment "Fortess or Prison"

          I read in one of the comments section that they are intending roll out the EU VAT on

          mail order businesses in 2016?

          I can see this VAT rule running for some time
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        • Profile picture of the author JensSteyaert
          Originally Posted by funprojects View Post

          Looks like Clickbank and/or PayPal have solved this problem: try buying something online, and you get hit with a price increase at checkout. This is annoying, and as a result, I didn't go ahead and buy the things I was going to. I also cancelled the 2 hosting subscriptions I had with US host providers and moved the sites closer to home.

          I just wonder, are they building Digital Fortress Europe or Digital Prison Europe?
          As far as i know this has always been the case with Clickbank. There will always be VAT added on the checkout page on top of the price mentioned on the sales page. Same with Hostgator (at least for me) for instance as you mention hosting providers.

          As i see it for now it seems Clickbank and Zaxaa are 2 platforms that are compliant with the new rules.

          It stuns me that platforms like Jvzoo and Warriorplus aren't doing a thing (well at least haven't found any info regarding this). Surely they realise that EU citizens (not the big dogs ofcourse) won't use their platform anymore if it's too much of a pain to get their administration in order?

          If they are hoping people won't care about these new rules in the EU, then i think they are wrong...Examples will be made, that's for sure...
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          • Profile picture of the author goneill
            I was wondering what the situation would be if one accepted Bitcoin as the payment medium?

            1. No income tax

            2. No VAT Tax

            3 Continue to sell products worldwide.

            I think it might be worth thinking about as it puts you outside of fief currency laws
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          • Profile picture of the author Kris79
            Originally Posted by JensSteyaert View Post


            As i see it for now it seems Clickbank and Zaxaa are 2 platforms that are compliant with the new rules.
            About Zaxaa:
            Yes, I would agree that they are the best. They have many good features and made effort to implement new VAT rules.
            And Zaxaa is the only one doing it in JV/aff space.

            BUT:
            Integration of EU VAT MOSS is limited.
            For example those rules require at least 2 different proofs of evidence for customer location.
            And for now Zaxaa is collecting IP address.

            Of course this is more problematic since for example requesting customers to give us their physical address to prove their location will at least highly lower conversion rate.
            So: there isn't any good solution. Using Zaxaa or Clickbank is a must. Or wait for new solutions.
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  • Profile picture of the author NSA
    Oh man, seems like this is going to suck a whole lot for a whole while.

    I want to become a U.S. citizen. Again it seems like clumsy grandpa's are making our digital laws here in the EU. If it would be comedy, not law, I would applaud.

    I can not see the unification in this.
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  • Profile picture of the author nicheblogger75
    As a US citizen, I'm going to ignore it completely and pretend I never heard of it and continue with business as usual. If anything comes of it, well my attorney can deal with it then. One thing I won't allow to happen is myself to lose any online earnings. My online earnings have gone up every year and I'm not about to let some stupid VAT tax law interfere with that.

    I'd love to get a tax bill from a foreign country so I can add it to the kindling I use to start my fireplace.
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  • Profile picture of the author Rob Harris
    I'm wondering if a way round this is to build a list and be a full time affiliate so that I don't actually sell my own products any more. I will seek accountant advice when they're back to work in the new year.

    Or switch to Clickbank. I only launched my first WSO at the beginning of the month and I want to continue, I've got my next launching on the 30th. It'll be genuine scarcity, if I can only sell it until midnight on the 31st!

    Rob
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    • Profile picture of the author Kris79
      Originally Posted by Rob Harris View Post

      I'm wondering if a way round this is to build a list and be a full time affiliate so that I don't actually sell my own products any more. I will seek accountant advice when they're back to work in the new year.

      Rob
      When you are an affiliate and you are just promoting other products you do not need to deal with this EU VAT.
      This new regulation is only for product owners and direct sales of your own products.
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  • Profile picture of the author Mark Hess
    Here's another thread on the subject: http://www.warriorforum.com/main-int...st-2015-a.html (including JVZoo VAT complience)
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  • Profile picture of the author Rob Harris
    [DELETED]
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  • Profile picture of the author Rob Harris
    Lets just all vote ukip!
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    • Profile picture of the author AKhann
      This is silly. How are they even going to regulate it? Why don't they go after the big corporations that dont pay tax, instead of taxing the living daylights out of us ordinary folk

      Originally Posted by Rob Harris View Post

      Lets just all vote ukip!
      Im honestly thinking about it. If UKIP was elected, it would probably take them years before they set a referendum though
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      • Profile picture of the author Phil Wilkinson
        [QUOTE=AKhann;9774884]This is silly. How are they even going to regulate it? Why don't they go after the big corporations that don't pay tax, instead of taxing the living daylights out of us ordinary folk



        Because big corporations have MEGA money and lawyers to fight back....and we 'ordinary folk' don't.

        It's easiest to pick on the defenseless. Unfortunately, it's always been that way.
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        • Profile picture of the author CharlieMain
          It does make you think and wonder do you comply or not? Of course by now if you are selling you should have made a decision.

          What is the hardest is part is you tend to hear these things late and the tools you need to implement these laws just don't seem to be on tap when you need them. As previous posts have suggested you have to consider 3rd parties or seek ways to block customers from different countries. How much extra time does that take to sort out?

          Or you can ignore it and take a risk - then how big is your risk appetite?

          It would be interesting to see who is prepared to take that risk. I for one am still weighing it all up.
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  • Profile picture of the author icandi
    There's so much conflicting information on this subject, maybe I am mis-reading this - or got information overload. Are they expecting suppliers from the entire IM world wherever they are based (even in Asia) to register for VAT in 28 countries?
    If that's the case, surely they must realise that simply won't happen and most people will either not supply to EU countries or take the risk. Maybe we will all have to geo-target our pages.
    I'm sure there will be a WSO on this, already seen one appear so far. This situation reminds me of the Sunday trading laws in the UK when the laws were so confusing and impossible to understand, in fact even now they aren't exactly easy in some parts of Europe.
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  • Profile picture of the author Flyingpig7
    So am I to understand this correctly this is only for own products and the selling of them. What happens if you're selling services ? In addition is Affiliate marketing not the selling of products?

    I suppose this would affect your selling of products from vendors outside of Clickbank etc.. marketplaces.

    For example I am an affiliate of a couple of companies that have lots of their own products and a merchant account; does this mean I now have to be wary of selling for them?

    I've just had a look at Taxamo Taxamo - 2015 EU Vat Changes for B2C - EU Vat Compliance Solution they collect 6 pieces of evidence, are free for 20 transactions every month. So for services etc.. if I need to use it this looks the perfect solution for a tiny solo business.
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    • Profile picture of the author LynnM
      Originally Posted by Flyingpig7 View Post

      So am I to understand this correctly this is only for own products and the selling of them. What happens if you're selling services ? In addition is Affiliate marketing not the selling of products?
      .
      It's supposedly for e-services, but most digital products have been put under that heading. HMRC have said that affiliate sales are exempt, because it's B2B (probably because you're not the creator or deliverer of the product).

      These are good resources to find out more:
      Key Facts About The New EU VAT Rules | EU VAT Action
      https://www.facebook.com/groups/DigitalVAT2015
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  • Profile picture of the author Rob Harris
    I think the best thing to do is speak to an accountant and get legal advice.
    Unfortunately I'm releasing a wso tomorrow and I don't know whether I should stop it at midnight on nye or cancel it entirely. And my accountant isn't back to work unti next week.
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    • Profile picture of the author goneill
      If you host your business/site in a tax haven within Europe but not in the EU, how can they enforce your

      complience with EU Tax laws?
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  • Profile picture of the author aire
    This rule is kind of not feasible in reality. I wouldn't worry about it. EU government coming to catch us in US for selling WSO to someone in EU. - Likely not.

    I don't waste time on things i can't control. Move on!
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    • Profile picture of the author Phil Wilkinson
      Originally Posted by aire View Post

      This rule is kind of not feasible in reality. I wouldn't worry about it. EU government coming to catch us in US for selling WSO to someone in EU. - Likely not.

      I don't waste time on things i can't control. Move on!

      That's one way to go about it. You must be really lucky. Never found that to be a good strategy; depending on being lucky. I don't waste time on things I can't control either....but this doesn't qualify. I can't control this new law, but I certainly control how I react to it, and whether or not I will just ignore it and hope for the best, or if I'll take it seriously, and attempt to comply.
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  • Profile picture of the author Rob Harris
    Im going to speak to my accountant when he's back to work on Monday. Get some legal advice on how to comply or see if I can pay him to sort it out for me!
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  • Profile picture of the author goneill
    Another Update

    Just received this from Kindle (Amazon), it was the last paragraph in the missive they sent to me.

    "Lastly, as of January 1, 2015, Italy has put in place a new law. Applicable VAT for eBooks sold in Italy will depend on whether the book has an ISBN. All eBooks with an ISBN will have a 4% VAT rate and eBooks without an ISBN will have a 22% VAT rate. This is the rate that is added to your price on January 1st and is the rate deducted when an Italian customer purchases your book. If you obtain an ISBN after January 1st, the 4% VAT rate will then apply for future sales but we will not adjust your list price automatically."

    So what does this tell you, the VAT Laws can be changed and it adds more complications to the calculations of VAT if complying with law as originally set out

    Wish you all a very happy VAT year
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  • Profile picture of the author Ged3
    Hi All,


    am I right in saying that this does not apply to affiliates. So you could be a Clickbank affiliate or an affiliate of another company and it would not affect you?


    Thank you
    Ged
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    • Profile picture of the author Kris79
      Originally Posted by Ged3 View Post

      Hi All,

      am I right in saying that this does not apply to affiliates. So you could be a Clickbank affiliate or an affiliate of another company and it would not affect you?

      Thank you
      Ged
      This affect sellers. Affiliates do not sells, just promote.
      As least this is my understanding.
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  • Profile picture of the author Ged3
    Thank you Kris79,


    Best Regards
    Ged
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  • Profile picture of the author Robert Puddy
    I just had a long chat with my accountant about this, and because we sell business software and are therefore deemed as a business to business b/b seller were safe from this stupidity.

    So I'm a happy chappy today
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