The elephant in the room (VAT Rules Jan 2015)

Hi Folks,

Surprised this has not come up here yet so thought I would kick it off, from what I have seen WHMCS will take care of the point of sale VAT rate so that is really of no concern but the fall out is going to be interesting, I suspect UK based hosts that are used to enjoying the very high threshold (such as myself) will be hit hardest with this.

For those that don't know about the 2015 VAT changes I will try to tl;dr it for you.

As of January 2015 if you are selling digital good or services within the EU (regardless of your origin) you must charge VAT at the local rate of the buyer i.e. if you customer is in Italy you charge VAT at the rate for Italy, this applies to businesses and individuals alike.

You have 2 choices, you can either register for VAT in all 28 member states and file 28 different VAT returns every 30 day - 1 year depending on the regulation of that member state.... or ..... you register for the MOSS system while you still have to keep separate accounts for all 28 member states you can charge at 1 standard rate and do your submissions through 1 online portal.

In order to use the MOSS system you must first be VAT registered yourself.

There is no threshold i.e. you can take €50,000 before this is applicable.

This also apples to businesses operating in countries outside of the EU who want to sell to business and individuals within the EU (host gator for example will have to collect the VAT for customers who are from the UK or any other EU member state, and they are actively complying with this)

Having spoke to a few people who live in countries with strict VAT laws anyway they do not see this as a huge issue, personally I think it is a real nightmare situation but it will simply be considered VAT Fraud not to comply.(Which is jail-able)

It has not been well publicized in my opinion and will catch a HELL of a lot of companies out come April when they start asking for the VAT you should have collected.

And yes every part of hosting inc IAAS/SAAS is covered (I called and asked)

http://ift.tt/1dvHQ0Z