VAT MOSS - VAT on digital product sales

You’re correct, it’s US$154.02 (inc. VAT)
Because the UK is still part if the EU… I have to pay 21% and I’m not upgrading but buying new.
After Brexit and without the Black Friday discount the price for me will be only 5 bucks higher than now.

Every country, even some states in US and Australia, are ow starting to require VAT on digital products. Don’t think UK won’t apply this any more after Brexit.

There’s no VAT on digital products from EU countries to customers outside the EU. US neither (outside the US that is).

I have purchases from everywhere around the world. Most of them are charged for VAT. I am using, as @Norm, Paddle as reseller. Fastspring is doing the same.

I decided to have my prices being displayed with VAT calculated already in.

Further reading:

https://fastspring.com/docs/classic/how-are-vat-and-sales-tax-handled/

That’s because parties like Paddle and Fastspring are registered in almost all those countries. So what basically happens is that the buyer and seller are in the same country thus VAT rules of that country apply. Your customers from outside the EU should not have been charged if YOU were the party they’re dealing with. But because Paddle or Fastspring are registered with for example the US or Australia, your customer pays local taxes. But…convenience has its price…your customers are just the ones paying for it.

Another side effect of this system is that @Jannis and the other European developers (I exclude myself as I don’t charge) are greatly disadvantaged by all the non EU developers breaking the law and not charging VAT to European customers. I understand that they break the law because they know they can get away with it but it nevertheless makes their products 20% cheaper for EU customers.

The situation re the UK will not change after brexit - all those rules have moved into UK law (incidentally the UK was a major player in introducing them due to the public outrage over the tax dodging behaviour of Amazon, Apple and Google etc.)

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Incorrect. Paddle is only registered in UK (and Ireland, afaik).

US customers for example are charged from UK.

Well, I trust that Paddle and Fastspring, specialized in this, doing their job correct.

It’s not convenience. I really would like to charge by my own. It’s just impossible to do so with this VAT regulations.

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I think we’re talking sideways :)

It’s not that difficult here’s a guide to follow, when where and how much to charge:
https://quaderno.io/resources/eu-vat-guide/

There’s plenty of tools to do it yourself, if you choose to outsource, thus someone to do it for you, is that convenience or a convenient choice?

EDIT:
Anyway, say whatever you want, Close the thread, do what you like. I follow this.

So, zip have experience in that? Already sold yourself online products in the hundreds each month?

Believe me. It’s far from easy.

Small comment to add… VAT on digital products is not compulsory. Most commentators don’t realise this as they’ve never actually read the rules.

Not compulsory = not mandatory / not obligatory ?

Why should it not be mandatory ?

It just isn’t. You do not have to apply vat to all online sales of digital products.

(Yes, I’m teasing you now).

EDIT: Thread now closed?

But I can still edit this one, so for @Jannis and others…

## Sales not affected by these rules

Using the internet, or some electronic means of communication, just to communicate or facilitate trading does not always mean that a business is supplying e-services. Using the internet for the following does not count:

* supplies of goods, where the order and processing is done electronically
* supplies of physical books, newsletters, newspapers or journals
* services of lawyers and financial consultants who advise clients through email
* booking services or tickets to entertainment events, hotel accommodation or car hire
* educational or professional courses, where the content is delivered by a teacher over the internet or an electronic network (in other words, using a remote link)
* offline physical repair services of computer equipment
* advertising services in newspapers, on posters and on television

## Defining ‘electronically supplied’

This covers e-services which are automatically delivered over the internet, or an electronic network, where there’s minimal or no human intervention. This can be either:

* where the sale of the digital content is entirely automatic, for example, a consumer clicks the ‘Buy Now’ button on a website and either the:
  * content downloads onto the consumer’s device
  * consumer gets an automated email containing the content
* where the sale of the digital content is essentially automatic, and the small amount of manual process involved does not change the nature of the supply from an e-service

All e-services that are electronically supplied in these ways are digital services.
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Maybe you have other definitions in the UK of a digital download.

In Germany (and I guess everywhere else in the world) products like software downloads are digital products and have to issue VAT for the different EU and other countries.

It’s also stated in your reference:

Electronically supplied services
These rules only apply to e-services that you supply electronically and includes things like:

supplies of images or text, such as photos, screensavers, e-books and other digitised documents, for example, PDF files
supplies of music, films and games, including games of chance and gambling games, and programmes on demand
online magazines
website supply or web hosting services
distance maintenance of programmes and equipment
supplies of software and software updates
advertising space on a website

We’re talking about software here…

Check the small print, in certain circumstances you might find that’s not the case.

As I admitted, I’m just teasing you really. The circumstances under which VAT may not be charged are not really viable for most, but assuming the regs HMRC have been using for the last few years are inline with EU regs (which I’d assume they are) there are caveats.

No, the title says “digital products” ;-)

Like I say, I’m just teasing really.

You know my humour by now :-)

Key phrase there is These rules only apply

I did contact HMRC, and asked about certain products (software included) in certain circumstances, and I got back the reply saying that in some instances VAT does not have to be charge. So I did get it in writing. Not that I used it the advice, I just wanted to check all my options.

You may remember we had a big discussion on this one a few years ago, I think on the other forum.

Oh, and the only other comment I’ll make on the subject of VAT, and I may be wrong here, but I’ve a feeling digital goods fall under the same inc. ex. VAT rules as all other products. In that, if your main customer base are not VAT registered you must display your top-line price as Inc. VAT.

I know this applies to regular retail, in-store and on-line. I don’t know for sure if this applies to digital, but unless it is stated otherwise, I’d say it’s best to assume it is.

Which of course means that anyone selling into the RW who advertises prices ex.vat may (MAY!) be breaking the regs. Being that the majority of RW users won’t be VAT registered.

As I say, I don’t know on this one for sure, but anyone advertising ex-VAT top-line prices would do well to check this out.

From a users point of view, I would add that listing prices ex.VAT then applying it at checkout will almost always leave a bad taste in the mouth of most “consumers”, opposed to business customers.

In the wider retail world, where I existed for most of my working life (before discovering people will give me money to make websites!) we learnt many years ago that even if you can legally advertise an Ex.VAT price, it’s generally a bad idea.

Correct. At least in Germany that’s the case. So I decided having my product prices including VAT already. Everything displayed is the final end price.