EU VAT MOSS for digital products
Yes. It looks (and is) boring but it's the law.
The European Union (EU) is introducing new tax regulations for digital sellers.
From January 1st 2015, all digital products sold to consumers inside the EU will incur a sales tax (Value Added Tax or VAT) based on the customer’s location and NOT on the seller’s location, as used to be the case.
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
Some good news:
Here at VibeDeck we're doing most of the hard work for you. We'll make sure all the item listed above are done and we'll give you all the info you need to get a quarterly EU MOSS VAT return sent to who you need to.
Yes, unfortunately it effects everyone who sells digital content to customers inside the EU, even if you're based in the US it'll effect you.
HOWEVER. It's up to you if you want to add VAT to EU sales etc.. as there is no official word on how they will enforce this new law.
In a nutshell, you'll need to register for VAT MOSS and send in a quarterly VAT return.
There is little official information on how this new law will be enforced outside of the EU. The US and EU do not have any agreements set up to this effect so it's currently very difficult to see how they could enforce such a drastic change, so should you bother doing anything at all if you're outside the US and have less than $5k in sales a month, probably not!
The EU has created the optional Mini One-Stop Shop (MOSS) scheme which will allow sellers to register with one EU member state (The UK) and submit a single VAT quarterly return and payment covering all the digital sales across the 28 EU states. Phew.
Here’s a more detailed explanation of VAT MOSS
Sure, just hit us up with a help ticket and we'll be happy to give you a hand.