Generally most of us marketers happily work towards selling our products and services without too much bother at all. For example I have a number of Hypnotherapy products that I am currently working on. Over a period of time I map out what needs to be done to make that product saleable and then over a period of weeks and months I action each part of the plan until the product is complete. Once I am able to sell that product I place it on my website shops and then market it to potential customers. Simple! Or so it seemed until the EU became involved. Now you need to be aware of the Digital VAT impact for therapists about to become law.
For those of you who are unaware from the 1st January this year selling digital goods into other EU countries just got complicated. The EU in its infinite wisdom created a set of laws that would make it harder for some of the big retailers like Amazon to sell products without paying their taxes. Genius apart from one small problem the people making the new laws forgot about small businesses.
Currently there are hundreds of thousands of businesses dotted around the EU that sell digital products. These products can range from online courses, to audios to knitting patterns. Many of these small business earn a small wage from their products and are therefore exempt from paying VAT. In the UK that means that a businesses has a turnover of less that 81,000 pounds per year. With the new digital selling rules starting on January 1st 2015 small businesses suddenly have responsibility for dealing with VAT in other countries as well. In other words if you sell an audio to a client in Denmark you will now need to account for VAT at the Danish rate and not the UK rate.
Now this sudden news that digital products are not subject to this new ruling has gone down like a lead balloon as you can imagine. The burden that these new rules place on small digital sellers is huge but at the moment the politicians and law makers are scratching their heads because they simply had not thought of how their new rules might impact a small business only a large seller. So at the moment how digital sellers should deal with the problem is unclear. That means that if you are currently selling digital products and are selling into the EU you are faced with a number of choices over the next week.
1) Register for VAT in all the countries that you currently deal with and experience an admin nightmare.
2) Register for the VATMoss system and try and work out how you can make your shopping carts deal with the information that the EU needs collected as part of its new rules.
3) Take your products off the market or make them unavailable to anyone outside the UK.
4) Bury your head in the sand and hope it all goes away.
Now hopefully this problem will be sorted out in the next couple of months but for the short term if you are marketing digital products into the EU get up to speed very quickly. To follow the discussions, debates and lobbying on this hot topic ask to join the following Digital VAT Facebook group. This will keep you up to date with any new information about the issue and keep you on the right side of the law!