I know this isn’t very Christmassy, but if you are an indie publisher in the UK, it is important for you to know about this change.
In an attempt to stop organisations like Amazon putting their transactions through countries with low VAT rates, the tax regulations about digital products are changing.
From 1st January 2015, if you sell a digital product, it counts as a sale not in your home country, but the country where the customer lives.
That may not sound like much of a change, but:
- Before the change, if you are a UK trader with an annual turnover below the £82,000 VAT registration limit, you did not have to charge VAT on anything.
- After the change, if you sell a digital product like an eBook to someone in another European country, you have to follow the VAT regulations in their country and pay the tax if it is due to that government.
Not nice, eh?
If you are selling through another organisation (like Amazon), then you don’t need to worry. This is their problem.
If you are selling through your own website, for example, you need to re-organise yourself, or consider changing your selling plans. Try these articles:
- Here is a general explanation of the problem.
- Here are some examples.
- Here is a summary from accountants Grant Thornton.
I’m off to investigate what Etsy are planning to do on this one.
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