What’s the problem?
The European Union, in their infinite wisdom, have decided that starting a digital business and working 18-hour days whilst holding down a second job, creating innovative products, building your audience and loving your customers is just way too easy, and what you really need to invest your copious spare time in is some wholly impractical and mind-crushingly complex red-tape.
So they invented VAT MOSS…
From January 1st, 2015, all digital goods sold to EU consumers will incur a sales tax (Value Added Tax or VAT) based not on the seller’s location but on the customer’s location.
There are some truly genius innovations in this “wardrobe malfunction” of legislation. For instance, it applies to digital goods sellers (eBooks, courses, video tutorials, etc) even if they are not based in the EU. There is also no minimum threshold for digital sellers, so if you are based in the US and you sell one eBook for $1.00 to a guy in Greece, a tax will be payable. By you. To someone in Greece.
This article is a good overview if you want to read more about the changes.
The EU VAT requirements in summary
As of 1st Jan 2015, to comply with the changes, digital sellers will need to:
- Identify the location of their customers
- Calculate the correct VAT rates (28 countries in the EU, 75 rates of VAT)
- Submit a quarterly EU MOSS VAT return
- Store evidence for 10 years
To ease the potential admin created by the new EU VAT changes (that’s the EU’s language – they actually used the word “potential”) the EU has created the optional Mini One-Stop Shop (MOSS) scheme. MOSS will allow sellers to register with one EU member state and submit a single VAT quarterly return and payment covering all the digital sales across the 28 EU states.
Here’s a more detailed explanation of VAT MOSS
What Selz is doing about EU VAT
Starting next week, we’ll be rolling out a series of feature updates that will make it easy for you to deal with this new legislation in a simple and efficient way.
These new laws are complex. We’re all about making selling simple. So we’ve been hard at work on new features that will help you meet your requirements under the new EU VAT laws.
EU VAT Reporting
The first feature we will release is EU VAT Reporting, This will allow you to simply meet the reporting part of your obligations under the EU VAT laws.
The EU VAT Reporting feature will:
- Automatically identify the country of your customer based on the billing address, IP address and location of their credit card issuer
- Calculate the estimated VAT liability for each of your sales across the 28 EU states (you can use our automatic pre-set values or input your own)
- Allow you to export your order list, showing these details and the EU VAT liability for each sale.
Pricing and Invoicing
The next feature we will release will be Pricing and Invoicing. This feature will allow you to simply set different tax rules for different regions and to automatically provide matching invoices to your customers.
The Pricing and Invoicing feature will:
- Allow you to set inclusive or exclusive pricing
- Automatically issue the correct tax invoice to buyers.
Talk to us
We’re here to help you sell more, and all the features we develop are driven by your needs and our conversations with you.
So reach out and tell us what you want in a comment below. If you like what we’re doing, tell a friend or tweet this post
Warning: seriously dry legal stuff
Here is the normal legalese. You shouldn’t take anything written here as advice. It’s merely our understanding based on reading through the information available. You should seek professional advice about your own personal liability and regulatory compliance.