Hi everyone,
Starting this month a new EU VAT regulation will change the way in which VAT (consumer tax) is charged on digital services - instead of the tax rate being applied according to where the supplier/designer is located, you must determine where the buyer is located and apply the relevant local rate of tax to the purchaser. So that means if I live in Holland and someone in Germany purchases my digital file, I need to pay VAT at the German rate to the German authorities. Just to be clear, that's a total of 75 different tax rates across 28 different markets! And, I need to save this information for ten(!) years.
This will bring a high level of regulation and administration to the kitchen tables of micro-businesses, like scrapbook designers. Hundreds of thousands of the smallest businesses simply cannot comply with this law and are faced with a stark choice – either to close up shop or to break the law.
The intention of this new legislation is to put a stop to billions of euros of the consumer tax being lost due to multi-nationals locating in low tax jurisdictions. And, although I support that, the implementation of these rules will force me and many other European scrapbook designers to stop selling our products. The costs in paperwork, bureaucracy, and amendments to websites and payment processing will simply mean that many businesses can no longer survive.
Please help us spread the word and sign this petition. Maybe if we can rally up the scrapbook-world or any other micro-bussinesses, we can make the EU change this law!
https://www.change.org/p/pierre-moscovici-a-unilateral-suspension-of-the-introduction-of-the-new-eu-vat-laws-for-micro-businesses-and-sole-traders
Wow! That is totally insane. They should have excluded small businesses that make less than, for example, $300,000 in profits per year.
it is insane ... I can see them doing this for sales of larger items but thins like downloadable files etc it's just crazy .. The Digital Scrapbooking Studio just had to change everything over and have used a software program o do it but for anybody who has just their own shop and isn't supported by a larger company ... crazy crazy crazy
It applies to the whole world from what I gather. That is why the people in the USA are shutting down their etsy shops etc to EU buyers. People outside of the EU don't want to have to start messing around paying VAT to the EU so are ruling us out.
I ironically decided to start doing designing on the 1st January. It later that same day that I found out about the VAT thing. It put me off for a week but now I've decided to look at it in a positive light. Etsy are still saying (well they were last time I looked) that they aren't liable to pay the VAT on the sellers behalf. However, our government here in the UK say otherwise. I've been reading the Etsy forums and a lot of people are saying they will only sell to outside of the EU or their own country. So the way I see it, that cuts down the competition a bit! lol
There is always a silver lining to be found...see the rainbow, not the rain. 
Ask me again in a few months if I still feel this positive. lol x
You should have heard Jordan when he heard about it....