VATMOSS - WTF?

Clearly Im late to the party, although it seems the invites are still wet…
From 1st January 2015 software companies like mine which trade below the UK VAT threshold of 81000 UK pounds, will suddenly have to register for UK VAT, charge it on everything we sell (an immediate loss of profit of 20%), and maintain records of country of purchase for anyone buying from any of the 28 EU countries which have 75 VAT rates to cater for.

To say I’m livid is an understatement.
The implications:
people who sell £200 of cakes are VAT exempt
People who sell as little as £1 worth of electronically delivered software need to suddenly register for Vat and all the incumbent administration, lose 20% of their revenue (or whack up the price)

Anyone else in the same leaky boat?

WTF???
Where did you see that - that is ridiculous if it’s true.

Welcome to the wonderful world of the VAT, the most crooked tax ever invented in the EU…

And then one wonders why the whole union is facing recession. Ans all these idiots find to be a solution is to even raise the friction factor…

How does this affect MAS only sales, as they are acting as an intermediary???

Apple is the one selling the software. So I would guess that they have to handle that.
It’s a bit more cumbersome if you sell your software your self on your site. Then you need to know where the buyer lives.
I believe this new thing applies to the whole EU if I’m not misstaken.

That will result in the price of MAS apps skyrocketing 20%, as the developer needs to recover the extra amount deducted.

Yepp. If I buy your app it’s 25% instead of Luxemburgs 15… :wink:

http://www.theguardian.com/small-business-network/2014/nov/27/micro-businesses-vatmoss-your-reaction-new-eu-tax-laws

http://ysolda.com/blog/2014/11/26/they-didnt-know-the-impact-of-vatmoss-on-really-small-businesses

First, this is an eu/uk issue. If you are in the us, relax.

If you only sell via mas then you’re exempt (but paying apple 30pc for the privilege )
If you sell even *one copy * direct to someone in France or Germany and don’t register for vat, you are liable for an ‘unlimited’ fine.

This is down to giants like (but not limited to) amazon declaring that they operate from Luxembourg or the Channel Islands and so avoiding vat on their sales.

The solution from the eu is not to charge vat based on your own country, but in that to which you are selling.
There will be a need to somehow work out where your customer is, keep records for up to 10 years, and account for vat on every penny.

Quite literally, businesses like mine were totally overlooked by this … Possibly the stupidest tax since the window tax!

And for me, the impact is actually greater. My software generates electronic content that small businesses can also sell on line.
If this goes through they simply won’t bother setting up in business and I’ll lose potential customers too.

Sweden has 25% VAT??
So basically we will need to find out the maximum VAT rate in the EU, and then increase our app prices accordingly?

In the Windows Store, they take the VAT out of the gross payment, and with the recent increase in the tax rate to 20%, they contacted authors to advise revising prices to compensate.

I verified just now Apple does not take the VAT out of the gross, and keeps payment at 70% of the list price for US busi. As far as I know there is no indication they will change that.

[quote=146597:@Albin Kiland]Apple is the one selling the software. So I would guess that they have to handle that.
It’s a bit more cumbersome if you sell your software your self on your site. Then you need to know where the buyer lives.
I believe this new thing applies to the whole EU if I’m not misstaken.[/quote]

The EU insists that international merchants should collect the VAT but there is little they can do when the company is overseas.

[quote=146601:@Richard Summers]Sweden has 25% VAT??
So basically we will need to find out the maximum VAT rate in the EU, and then increase our app prices accordingly?[/quote]

Look at your MAS financial reports. For the moment, no need for concern. If it were ever necessary, you can fix different prices per country.

If you sell through mas, you already are not seeing the tax.This is one reason why I fought with mycommerce.

If I set the selling price, they hit me for the vat at the country of purchase, so I lose out by 25pc on Swedish sales.

If I want a fixed price in my pocket, I have no idea what the end user is going to pay, making it hard to say how much the software is on my web site.

So I much prefer to sell direct.
I’m not vat liable, I don’t charge vat. Simple
Belgium, Sweden, uk, USA… Everyone pays the same. It’s been that way for over 20 years, and now this.

Stupidity.

[quote=146601:@Richard Summers]Sweden has 25% VAT??
[/quote]
Depends on what you’re selling but for the most part yes :confused:
https://en.wikipedia.org/wiki/Value-added_tax

Personally I’m fine with only selling my apps through the MAS and paying my 30%. At least I do not have the hassle of all the extra paperwork.

This does however, have a wider impact on businesses, as I can foresee many smaller companies refusing to do business with EU countries, and only dealing with countries outside the EU, such as with the US.

[quote=146604:@Jeff Tullin]If you sell through mas, you already are losing out by tax.This is one reason why I fought with mycommerce.

If I set the selling price, they hit me for the vat at the country of purchase, so I lose out by 25pc on Swedish sales.

If I want a fixed price in my pocket, I have no idea what the end user is going to pay, making it hard to say how much the software is on my web site.

So I much prefer to sell direct.
I’m not vat liable, I don’t charge vat. Simple
Belgium, Sweden, uk, USA… Everyone pays the same. It’s been that way for over 20 years, and now this.
[/quote]

I started selling direct long ago, but the worldwide market of the MAS very, very largely exceeds any sales I am able to do direct. So even with the VAT issue, it remains profitable enough not to pass that opportunity. Extra butter on the family bread is always good :slight_smile:

Maybe a better source…
http://www.vatlive.com/vat-rates/european-vat-rates/eu-vat-rates/

It is pretty simple:

If your business in in EU then:

Current situation:
For all EU customers you need to add VAT applicable to your country. So if you live in Belgium (like I do). You have to 21% VAT.
For non EU customers you do not need to add VAT

Situation from 1/1/2015
For all EU customers you need to add VAT applicable to the customers country. So for example if you sell something to a German customers, you need to add 19% VAT.
All collected VAT must be return via the MOSS central. Your accountant can do this for you.

I use PayPal and you can set rates for every country. Paypal automatically selects the correct VAT for the customers country. Plain easy.

Are you saying you do not have a VAT number? So basically you are selling illegal (as we call it ‘black sales’).
If you are selling software, you have to do it legally (read: have a VAT number).

The main implications are for SMALL businesses and sole traders / self employed persons.
Having to increase their prices 20% for example, could reduce customer base enough to result in close of business.

People just starting out as self employed will now have to register for VAT - resulting in extra paperwork, and extra headaches keeping track of every sale made; what country the purchaser lives; and what VAT rate they have.

This could have wider implications, as small businesses may now not want to do business with other EU countries - resulting in a much smaller customer base.

Not everyone runs a successful business, where they can get past this extra price increase. People seem to forget about all the NEW businesses and self employed people just starting out!

Christoph - that is wrong. In the UK, you only need to be VAT registered if you earn 81k or more.

OK, sorry. Didn’t know that.
Here in Belgium you need to have a VAT number when you sell more then 6800Eur/year