The EU VAT action group have announced that they will be meting with EU commission head of VAT Donato Raponi in the next ten days to discuss the situation regarding sellers of digital items who have found themselves subject to VAT MOSS since the start of the year.
The new VAT regulations that came into force on January 1st mean that sellers of digital downloads such as music, apps, ebooks and the like will now be subject to VAT at the prevailing rate in the buyer’s jurisdiction not that of the seller. Additionally, no sales threshold will apply and such sellers will be subject to VAT for all sales, not just those over £81k. We’ve written about this before.
The EU VAT Action group say that they will be requesting that the European Commission: “immediately issue a derogation for micro businesses so that they are no longer subject to the new EU VAT rules, but instead revert to their Member State’s previous VAT regulations.”
We wish them all the best, Whilst this #vatmoss business might seen quite modest to most sellers because it only applies to digital items, one of the reasons we have written about it repeatedly is because of the precedent it sets. The European Commission is quite clear that they’d like the principle of VAT being charged at the rate of the buyer’s jurisdiction not the seller’s to be a principle in place for all EU ecommerce sales.
That’s why getting this implementation right is important: a future roll-out could include physical goods.
