So a side effect seems that some companies which used to be exempted from collecting VAT will now kind of have to, thereby either raising prices or taking a cut of about 16.7% [1] in their revenues. Because you'd have to be crazy not to opt into the "mini one-stop shop" (who would want to register in every EU country?), so you register for collecting VAT although your revenue is low enough to qualify for exemption in your own country and the customer's.
That's even harder to swallow for companies delivering electronic services, as having a VAT number is not a huge money saver (paying VAT on web hosting isn't a huge burden).
Which countries lack VAT exemption? If there aren't many, it could be okay not to take customers from them.
[1] 1 - 1/1.2 = 0.167 as the average VAT is 20% in the EU
It's crap. I hope I'm wrong or that something can be done to exempt small enterprises.
The only hope is that this causes so much work to tax offices that they add a procedure to get the exemption in every country.
I'm not holding my breath as it seems VAT has only been increasing in its rate and span of subjected products :(
"Apple has structured its current agreement so that they act as your agent each time an e-service is downloaded... UK businesses only have one B2B customer, Apple SARL in Luxembourg, so for a vast majority of businesses selling on Apple’s App Store platform, these sales will be continue outside the scope of UK VAT and this change won’t affect them.
"For UK businesses selling e-services on Android/Google Play, the agreement is currently structured in a way that the business sells directly to the EU customer. It will therefore be the businesses responsibility to account for, and collect, the correct amount of VAT based on each customer’s location and pay this over to the local tax authorities."
[1] http://www.jeffreyshenry.com/important-vat-changes-technolog...
Currently does the system allow you to sell to VAT registered businesses in other EU countries ex-VAT and deal with the EC Sales list?
They handle all the collection of VAT and (presumably) do the EC sales list (that's not my problem). I still have to do my own EC sales list for the payments I get from them (but thats only 1 per month) and any sales I make direct (not many).
1. You sell to an individual who is not in the country that their payment information is related to and is not delivered to that country, do you charge VAT based on the payment information alone or do you have to physically verify that they are in the country claiming the VAT?
2. Prepaid CC can have false information, how do you determine is it is true so you can charge the right VAT?
3. Fraud, if you sell something to a fraudster, do you have to find out which country the fraudster was in to determine VAT you owe after the fact?
4. What about Bitcoin transactions where no location information is known?
We're already VAT registered and already trade with EU countries so we're pretty much set up to deal with this already, it's an extension to what we already do to not charge VAT to people we can verify a VAT number for (who are EU but not UK). The guidelines say we need two non-conflicting bits of information to verify the location of a person, they mention IP Address! We all know how useless that's going to be to identify in which country someone is.
Apple sells all apps through its Luxemburg subsidiary, meaning Luxemburg's low 15% VAT rate applied.
On the buyer side, am I right to assume that as a VAT-registered company/freelancer I will be able to deduct VAT paid on apps purchased through the App Store?
I think this is a bandage. Trying to address one problem, while ignoring the root cause. How about, "thank you very much, please put me in jail, I don't care anymore"? (While you bailout TBTF banks once again?)
"Governments" are the thugs that protect the big economic interests. The big economic interests, pay the protection money, "bribes", "donations". It's symbiotic. You, me, we, are the slaves.
The bribes, are a lot for the few politicians, they are happy and rich, and nothing, compared to be able to go on having slaves, happy and big profits, for the big economic interests.
You, you try to "crowdsource" "solutions" about the fact that your chains got heavier.
I'll continue to try and help out other small indie firms run their businesses and support their families.
It's not a solution, I don't have a solution, I'm just trying to help.
If anyone has any experience in lobbying the government to look into this sort of stuff, I'd love to hear about it. My experience as a business owner since 2001 however has been that they do not care a tiny bit about our kind of business, unless they can find a way to fine us for something. Fines that could cripple a small business but would just be seen as a cost of doing business for a larger one.
