Discogs VAT implementation for the UK and EU causes concerns

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With the changes to EU VAT regulations from today, Discogs VAT implementation has been announced as per their release below

There is one section of the Discogs VAT implementation which is causing concern to sellers on the platform, which paraphrased to remove references to the EU reads:

“As a service to UK sellers who sell to buyers also located in the UK, Discogs will apply supply of goods VAT to all orders where the buyer is not VAT registered.”

No one is quite sure what to make of this as sellers who are VAT registered are obliged to collect the VAT and remit it to HM Revenue & Customs via their VAT returns. Discogs collecting the VAT makes no account for those sellers who are on special schemes such as the Margin Scheme. It’s also peculiar that Discogs are not going to collect the VAT where the buyer is VAT registered.

One can’t help wondering how Discogs will remit the VAT to HM Revenue & Customs as marketplaces are under no obligation to collect VAT on UK seller to UK buyer transactions. If sellers leave it to Discogs and get a VAT inspection it will make for an interesting conversation for them to explain that they didn’t collect the VAT as Discogs said they’d do it for them.

If you’ve any more information to shed light on this, please do let us know. In the meantime, if you are a Discogs buyer and don’t want them to collect the VAT then upload your VAT number to Discogs.

Edited to add:

Great news, this evening we received the following clarification from Discogs which clears up the confusion:

“Discogs will not be assessing VAT on intra-EU or intra-UK orders beginning on July 1st, as our original announcement suggested. Discogs will only assess supply of goods VAT (import VAT) on orders to be imported into either the EU or UK by sellers located outside those countries. Discogs will assess VAT on these orders because, as a marketplace facilitator and deemed supplier, we are responsible for collecting, reporting on, and remitting supply of goods VAT on goods imported into either the EU or UK.”
– Discogs

Discogs VAT implementation email to sellers

“The following changes impact sellers worldwide who sell into the UK or EU, buyers located in the UK placing an order with a seller outside the UK, and buyers in the EU placing an order with a seller outside the EU.

When and how is supply of goods VAT charged?

There are two supply of goods VAT scenarios:
1) sales where Discogs is responsible for collecting VAT as a deemed supplier and
2) sales where sellers are responsible for collecting VAT. Discogs is responsible for VAT when goods are imported into either the EU or UK and the buyer is not VAT registered. Sellers are responsible for VAT when goods are sold within the EU or within the UK and the buyer is not VAT registered.

As the “deemed supplier”, Discogs will apply supply of goods VAT to all orders imported into the UK from outside the UK or into the EU from outside the EU. Supply of goods VAT will be applied at or under a certain low value goods threshold, as follows:
• The UK low value goods threshold is £135
• The EU low value goods threshold is €150

Supply of goods VAT is to be paid by the buyer as part of the total order cost. UK and EU VAT will be automatically calculated and added to the order total to be paid by the buyer. The supply of goods VAT amount will be added to your monthly Discogs sales fee invoice, and we will file the VAT returns and remit the VAT to the appropriate tax authority.

As a service to EU sellers who sell to buyers also located in the EU, and UK sellers who sell to buyers also located in the UK, Discogs will apply supply of goods VAT to all orders where the buyer is not VAT registered. We are providing this service to make sellers’ job of determining what is VAT taxable and what isn’t VAT taxable easier by supporting sellers’ requirements to collect and remit supply of goods VAT on intra-UK and intra-EU orders.

A commercial invoice must accompany all cross border shipments

Sellers will be required to attach a commercial invoice to the shipment for all cross-border sales.

If you are a seller who is outside the UK and EU, and are shipping an order to a buyer in either the UK or the EU, the commercial invoice includes harmonized tariff codes for each item to speed customs clearance — essentially, a seller declaration that the invoice accurately represents the shipment, and any VAT charges.

This allows customs authorities to determine whether VAT has been paid, if applicable. This can be printed from the order page. Simply click the “Print” button available in the top right section of your Order page.

For buyers, the order receipt has also been updated to include full VAT invoice requirements, including harmonized tariff (HS) codes for each item purchased.

VAT exemptions with a valid VAT ID

If you have a valid UK or EU VAT ID, please enter this into your Settings under Tax Information on Discogs. Providing your VAT ID will exempt you from VAT charges on Discogs whether you sell on Discogs or buy, even occasionally. If your VAT ID becomes invalid, we will notify you and request that a new, valid VAT ID be entered into your Seller Settings.”
– Discogs

3 Responses

  1. Well what joke this charge makes it so much more expensive, will wait until the items I want appear on ebay

  2. RIP discogs. Always preferred ebay, due to the fact at least you can see photos of the items on sale there. These extra charges and the farce around it all will be the final nail in the discogs coffin

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