With the new EU VAT regulations, designers and artist who sell digital products online are faced with a world of tax confusion and seemingly unnecessary bureaucracy. We cut through the red tape.
gonna reblog this again to point out that this affects EVERYONE and not only ppl within EU. Please spread the awareness and if you have any more information or updates about this please add it to the post.
This is the reason I can no longer use Patreon. According to VATMOSS-rules, I would not have to register for or keep track of anything as long as I use a third-party site - like Patreon.
Unfortunately, this arrangement depends on Patreon registering for VATMOSS in my stead. That is, they would have to keep track of all the identification-details for each of their users living in the EU, save those details for the next ten years, AND calculate the individual VAT-rates on each individual payment from an EU-resident. Which amounts to 75 different VAT-rates in 28 different countries.
And since it looks like Patreon doesn’t have any intention of complying with these rules, I am shit out of luck.
And, I reiterate, this applies to everyone, including non-EU creators using Patreon, as long as those creators have EU-residents as backers. As long as Patreon fails to comply, you aren’t following the rules, and are - to quote the article linked above - subject to an unlimited fine.
Spread the word, warn US-creators as well.
AGAIN, THIS IS IMPORTANT FOR BOTH PATREONS OUTSIDE AND INSIDE THE EU.
If you have people from EU who pledge money to your patreon, you are resposible for VATMOSS. Doesn’t matter if you live in the US.
You have to register for VAT-taxes and pay taxes in ALL the EU countries where your buyers are located.
Patreon has decided that this is not their responsility and are fucking over A LOT of people using patreon right now.
If you as a creator on Patreon don’t deal with VATMOSS (yes even if you live in the US), you might get in trouble for tax evading.
Patreon is making a douchy move just so they can avoid doing this shit themselves, even though I’m positive that they have the resources to do so.
This is a fucked up law that not only affects Patreon, but sellers of digital products in general.
This needs to be talked about! Patreon needs to feel the pressure!
If you want to help out; share information, create discussions and posts about VATMOSS, since a lot of people don’t seem aware of it! People can be charged for tax crimes without knowing!
Links:
• Petition to suspend the law for micro businesses and sole-traders
• EU VAT Action Campaign Group (FACEBOOK)
• Use the #VATMOSS hashtag on twitter
• Talk, share and discuss!
I’m having to ditch our Engelbaum Patreon too before it even starts if Patreon don’t change their tune in the next few months. Their unhelpfulness is going to cost them the majority of their userbase. The gross thing is that they are allowing users to continue without warning them. Everyone with digital Paywall/perks has been breaking the law since Jan 1st and Patreon have no intent to help fix it. Apparently you’d have to contact each backer individually… which is fine if you’re just starting up. What about the people with hundreds of backers?
Idiocy.
I’m now looking for alternatives that will step the fuck up for their users.
there is so much wrong here i don’t even know where to start
MOSS is not the evil thing; it is something that saves you from having to register in 28 different countries. (it’s short for “mini one stop shop”.) you register for MOSS, give them all your collected VAT, and they distribute it as necessary.
you are not affected by this if you live outside the EU. i direct you to these charts, comparing the rules in 2014 versus the rules in 2015. observe that the bottom rows, for non-EU businesses, are identical! you were supposed to pay VAT based on the customer’s home country before (since 2003!), and you’re still supposed to do it now.
the UK guidelines do briefly mention that the rules affect non-EU businesses, and then completely fail to elaborate further on that. so i’m highly inclined to believe the UK guidelines are just wrong.
if you live outside the EU and weren’t paying VAT before, you have no extra incentive to pay it now. you don’t live there. odds are you’re not even a registered business (and note all the text about this refers to “businesses”) in any country. what are they going to do, tax you? how would they even know you exist?
better question: are you collecting and paying sales tax for your own country on your Patreon? if not, why on earth are you worried about collecting sales tax for another country?
i note that on a platform like Patreon, there is nothing personally identifiable about any of the users by default. there is no billing address, you don’t have access to IPs, and there is generally no country-specific product. you could very well argue that you have no reason to suspect in the first place that any of your patrons actually live in the EU.
their suggested methods for locating a customer are pretty ridiculous and i suspect they will be the ultimate reason this falls apart, especially for the small guys. the suggestions are very clearly written with specific large players in mind: billing address, location of a cable box, maybe get an IP. if you use PayPal, you have none of these things. so what are you doing to do, ask the customer to tell you where they are? that’s completely unreliable.
their Explanatory Notes very briefly handwave this problem:
9.5.7. What if the supplier does not have two items of non-contradictory evidence in the context of Article 24b(d)?
In the event that a supplier has difficulties to collect two items of non-contradictory evidence to determine the place where the customer belongs, he should nevertheless continue to seek further evidence such as relevant commercial information.
In cases of doubt priority should be given to the place that best ensures taxation at the place of actual consumption of the services supplied.
in other words, if you’ve got nothing to go on: guess. so if you have a patron with an @gmail.com address, well, they’re probably in the US. oh hey that’s basically everyone problem solved!
the semantics of Patreon aren’t that you’re really buying anything; you’re lending individual support to someone who wants to create things anyway. i would not legally bet on this argument, though.
tl;dr: don’t believe legal or financial advice you read on tumblr
including mine