Cocomero saidThis is a typical B2B transaction that requires no VAT (with current and upcoming (2015) EU VAT rules)
Author is company from Germany. Customer is company also from Germany. Both are active VAT payers and have valid VAT ID. How is going Author from Germany get VAT from this kind of sale?
No matter if the author is a self employed seller or sells via a EU-/Non-EU online marketplace.
Zeisla saidYou can check it on this website (click on map)
Are there other countries that have similar tax laws as EU VAT ?
I do not check all countries but Norway (European Country but not EU member) has similar VAT rules for non-resident companys since 1 July 2011, or South Africa since 1 April 2014.
Referring to this site, Envato as non-eu based business had to calculate VAT on e-services since 2003 and not only from 2015.
EU business selling electronic services to EU consumers = charge VAT rate where the seller is based
Non-EU business selling electronic services to EU consumers = charge VAT rate where the consumer is based
EU business (Change) Selling electronic services to EU consumers = charge VAT rate where the consumer is based
Non-EU business (No Change)
Selling electronic services to EU consumers = charge VAT rate where the consumer is based
This is the same what’s described here on the official website of the EU
If that is indeed the case, then it becomes clear why Envato suddenly insists not to be the seller!
Gareth_Gillman saidIt looks like the HMRC has changed this in the UK two years ago
In the UK (not sure about the rest of EU) you only charge VAT if the buyer is the UK or the EU, If a buyer can provide a VAT number then they aren’t charged VAT. The VAT is charged at your countries VAT rate and sent to the tax department every 3 months. You would only charge VAT if you were registered (in the UK if you earn over £77k then you need to be registered).
thepainterman saidVAT regulations for digital goods trade has been around for a few years in some countries.
I cannot see how envato or anyone else is liable for pre 2015 sales btw.
Just two examples:
VAT on foreign electronic B2C e-services in the UK
VAT on foreign electronic B2C e-services in South Africa
And the EU changes from 2015 are not so new, the new changes only affect trade within the EU states. For non-EU companies this VAT scheme is already is in place since years. I doubt that Envato in the role as seller has itself registered for all these VAT schemes in the past years and that could lead to heavy tax troubles for them.
Here you can see the worldwide VAT/GST/Whatever rates per country
Unfortunately one can not be seen in this listing whether digital goods currently also taxed in other countries outside the EU or if there are similar changes in 2015
SurStudio saidSo it’s up now, but the regulation will change on 1 January 2015 for EU citizen
Is there a link or something where we can read about this? Because all I find on the internet is an author has to pay VAT in his/her own country.
More information for EU citizen:
I know specifically, in the US, if anything doesn’t look right, the IRS puts the burden on you to prove that you’re not doing anything illegal. It’s called an audit.
In Germany as a freelancer or (small) company you can receive also an audit by the tax office. The trigger for such an audit is diverse. First, the taxpayer may be selected at random or is simply the next in the turn. There can be strongly fluctuating profits, foreign transactions, recurring clarification of your freelancing status or other tax-matters can act as a base leading to an audit here.
The reviewer needs a second opinion, usually the reviewer is uncertain about the item price and/or the item quality.