New EU VAT Laws

Update: 31 Dec 2014

Thanks to Erica Spinks's comment, I came across a platform that takes care of the EU VAT and this will allow me to continue selling to all EU countries. I have moved all my digital data over and am ready to sell. For me, this means business as usual, regardless of the buyer's location.

For Australia, I don't know what this means or why there is so little information available to us regarding this matter. From what I understand, the law applies to ANYONE selling to any of the 28 EU countries. If you sell a digital product to any EU customer, you are liable for the tax due on that item. There are thousands of small businesses in Australia that sell digital items to the EU. Yet, there has been no official advice regarding this matter from either the Small Business Commissioner, Small Business Victoria or ASIC.

Why exactly do we have a Minister for Small Business when small business can't rely on or apparently expect advice concerning such matters? Who knows.

One thing's clear though: ignoring these laws won't work as it looks like these laws will apply to stretch to actual 'goods' from 2016 also and that will effect even more small businesses.

...................................................................

There's a new law coming into effect on the 1st of January 2015. It basically concerns anyone selling digital download products (such as my quilt patterns) to a customer in any EU country. It requires the seller to collect tax on behalf of that EU country and follow through with paying those taxes through an expensive, time consuming tax policy process.

There's been some discussion concerning this law in the UK in regards to UK sellers providing digital downloads to EU members, but as of today, there has been no information concerning the requirements for people selling outside the EU to EU members.

From what I understand, anyone selling a digital download product to a customer in the EU will have to pay regardless of their (the sellers) location. However, I have heard nothing specific about this where I am located, in Australia. I know of several US based shops who have stated that they will not be selling to the EU because of this law, but I have found it very difficult to get timely, accurate advice concerning this matter for Australian citizens.

This is concerning given that the law comes into effect on January 1st 2015.

I didn't know about this law until it was brought to my attention by another quilter on her blog and since then I've been at a loss to explain how it is that, with millions of e-book sellers out there who will be effected by this law, there has been so little discussion concerning its application in real life.

I am moving what patterns I sell over to an Etsy based store as I can't control digital sales by country on my present sales platform. Etsy have made a vague statement regarding this law, but so far haven't been specific and haven't addressed the implications for sellers outside the UK. I am waiting to receive more info from Etsy regarding this matter.

It looks likely that I will not be selling instant digital downloads to quilters in the EU. How this will be implemented, I don't know. I am assuming and hoping that Etsy will allow sellers to select which countries an item is available to sell to.

To all my EU customers who are interested in purchasing a pattern from me after January the 1st, you will still be able to do so, however instead of an immediate digital download, I will send the pattern on to you via email. This changes the product classification from a digital download to simply a digital product. Its annoying that we have to take a step backwards regarding technological advances and conveniences but it is presently looking like this will be the easiest work around.

For all my blog readers and quilters who have ever considered buying a pattern from me, please read this: my patterns will always be available for free during the month of their release over in my Yahoo BOM Group. Make sure you're a member (its free) as its a great way to ensure that you never miss out.

2015 is going to be a big year for me pattern wise, especially after the LE pattern lull of 2013 / 2014. Please become a member if you aren't already one.