For those blissfully unaware, the new EU VAT rules, also known under the name #vatmess, will come into force on 1 January 2015.
This insane rule means that digital goods sold online to a buyer in an(other) EU country have to pay VAT in that country (if it's sale and purchase within one EU country then the VAT [sales tax] rules of that nation proceed as normal). This can be gotten around, in the UK, if you register with HMRC for VAT (confusingly, there's a £0 threshold for this VAT idiocy but the UK's domestic VAT threshold is £81,000...) and use the VATMOSS scheme [which some are already reporting problems with].
The law's insane and indefensible. If a Canadian granny unassumingly sells, directly, a $0.99 knitting pattern to a Frenchman, she will then have to register for VAT in France. Thanks, EU, that'll help online SMEs.
If you use third parties, they should handle this. However, it varies and the definition of a third party is unclear. I've heard contradictory things about what happens if you use PayPal but sell through your own website, for example. The onus appears to be on the content creator/seller to ascertain the status of third parties, and if they don't handle the admin, then the creator gets lumbered with it.
I've contacted HMRC [UK tax authority], Amazon and Smashwords about this (I self-publish via the latter two and also have Smashwords distribute my work to every man and his dog). All suggested Amazon and Smashwords should handle the bureaucracy, which was a relief.
But I'm still concerned about this. We all know how tax works. If an authority screws up, nothing happens. If a sole trader/SME screws up, they get hoops to jump through, a bucketload of stress, and quite possibly a fine.
My plan is this: I'm going to withdraw my Amazon works from EU sites (excepting the UK). I also plan on suspending distribution and sales via Smashwords. I do trust the two retailers, my concern is that Smashwords distributes to a wide array of retailers (which has always, until now, been seen as a good thing), but if some of those retailers do the admin and others don't, I'm not sure how that'll end up working.
It's probably over-cautious, but as a man who compulsively re-checks Christmas present addresses and proof-reads his books twice I'm not going to take risks with this. If there are no horror stories in a few months then I'll expand the Amazon offering so those lucky Anglophone Frenchmen can once again directly buy Bane of Souls et al., and un-suspend the Smashwords distribution/sales.
I'm hopeful this won't affect me, but it's still abysmal. And, from 2016, I've read the same madness will be applied to physical goods sold online.
To end on some good news, this does not affect the planned second edition of Sir Edric's Temple, or the release of Sir Edric's Treasure (the eagerly anticipated follow-up). It also does not affect the 2015 planned release of Kingdom Asunder, which takes place in the Bane of Souls world.
And, if all does go well and I can put my stuff back on Smashwords and all the stores to which it distributes, I'll probably have some sort of celebratory discount code when each goes back up.
The next blogpost will hopefully be about progress with Kingdom Asunder and other things, and not about taxation policy designed by damned fools.
Thaddeus
Edited extra bit: just tried the Amazon restrictions, but there's no immediately obvious way to do it. I may leave them up, if necessary, as the alternative would be withdrawing everything I have from every retailer. So, they may stay up.
This insane rule means that digital goods sold online to a buyer in an(other) EU country have to pay VAT in that country (if it's sale and purchase within one EU country then the VAT [sales tax] rules of that nation proceed as normal). This can be gotten around, in the UK, if you register with HMRC for VAT (confusingly, there's a £0 threshold for this VAT idiocy but the UK's domestic VAT threshold is £81,000...) and use the VATMOSS scheme [which some are already reporting problems with].
The law's insane and indefensible. If a Canadian granny unassumingly sells, directly, a $0.99 knitting pattern to a Frenchman, she will then have to register for VAT in France. Thanks, EU, that'll help online SMEs.
If you use third parties, they should handle this. However, it varies and the definition of a third party is unclear. I've heard contradictory things about what happens if you use PayPal but sell through your own website, for example. The onus appears to be on the content creator/seller to ascertain the status of third parties, and if they don't handle the admin, then the creator gets lumbered with it.
I've contacted HMRC [UK tax authority], Amazon and Smashwords about this (I self-publish via the latter two and also have Smashwords distribute my work to every man and his dog). All suggested Amazon and Smashwords should handle the bureaucracy, which was a relief.
But I'm still concerned about this. We all know how tax works. If an authority screws up, nothing happens. If a sole trader/SME screws up, they get hoops to jump through, a bucketload of stress, and quite possibly a fine.
My plan is this: I'm going to withdraw my Amazon works from EU sites (excepting the UK). I also plan on suspending distribution and sales via Smashwords. I do trust the two retailers, my concern is that Smashwords distributes to a wide array of retailers (which has always, until now, been seen as a good thing), but if some of those retailers do the admin and others don't, I'm not sure how that'll end up working.
It's probably over-cautious, but as a man who compulsively re-checks Christmas present addresses and proof-reads his books twice I'm not going to take risks with this. If there are no horror stories in a few months then I'll expand the Amazon offering so those lucky Anglophone Frenchmen can once again directly buy Bane of Souls et al., and un-suspend the Smashwords distribution/sales.
I'm hopeful this won't affect me, but it's still abysmal. And, from 2016, I've read the same madness will be applied to physical goods sold online.
To end on some good news, this does not affect the planned second edition of Sir Edric's Temple, or the release of Sir Edric's Treasure (the eagerly anticipated follow-up). It also does not affect the 2015 planned release of Kingdom Asunder, which takes place in the Bane of Souls world.
And, if all does go well and I can put my stuff back on Smashwords and all the stores to which it distributes, I'll probably have some sort of celebratory discount code when each goes back up.
The next blogpost will hopefully be about progress with Kingdom Asunder and other things, and not about taxation policy designed by damned fools.
Thaddeus
Edited extra bit: just tried the Amazon restrictions, but there's no immediately obvious way to do it. I may leave them up, if necessary, as the alternative would be withdrawing everything I have from every retailer. So, they may stay up.
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