The title is rather link-baity as other than a bit of an accounting headache, this isn't really going to affect anything. B2B can and will still be able to reclaim or not pay VAT, and B2C prices will most likely be inflated to account for the changes (if VAT is included in the list price). When selling to EU customers you are already required to provide HMRC a breakdown per country, so you should already be doing the hard bit of figuring out where customers are based.
The main issue with this legislation is that it isn't clear, and what has been said is contradictory. As an example, this is from the EC guidance notes [0]:
Where telecommunications, broadcasting or electronic services are supplied to a private individual, VAT, as a rule, will be due at the place where the private individual has his permanent address or usually resides (as from 2015).
This completely contradicts what HMRC said as mentioned in the article :D I haven't heard any complaints from other countries, so is it just HMRC in the UK who are messing this up?
Everybody I talked to in Germany was complaining about the new regulations -- it's a PITA for every single online retailer and shop system vendor.
New rules will be in effect on Jan 1st and even accountants are still fuzzy on the details (fiscal authorities are still dragging their feet on providing implementation guidelines).
It's quite a challenge, and the administrative overhead is significant, particularly for SMBs (which fuels the existing notion that EU legislation tends to favor big companies).
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The title is rather link-baity as other than a bit of an accounting headache, this isn't really going to affect anything. B2B can and will still be able to reclaim or not pay VAT, and B2C prices will most likely be inflated to account for the changes (if VAT is included in the list price). When selling to EU customers you are already required to provide HMRC a breakdown per country, so you should already be doing the hard bit of figuring out where customers are based.
The main issue with this legislation is that it isn't clear, and what has been said is contradictory. As an example, this is from the EC guidance notes [0]:
This completely contradicts what HMRC said as mentioned in the article :D I haven't heard any complaints from other countries, so is it just HMRC in the UK who are messing this up?
[0] http://ec.europa.eu/taxation_customs/resources/documents/tax...
The title is rather link-baity as other than a bit of an accounting headache, this isn't really going to affect anything
The headaches are quite large, to be fair:
- The VAT rate charged is now the customer's local rate, rather than the seller's.
- Verifying the customer's country via IP address or credit card location in addition to the address provided. No match, no sale.
I haven't heard any complaints from other countries
Funnily enough, I'm having various arguments with annoyed accountants right this very second (I'm based in Poland).
I guess it depends on the local language being spoken.
Everybody I talked to in Germany was complaining about the new regulations -- it's a PITA for every single online retailer and shop system vendor.
New rules will be in effect on Jan 1st and even accountants are still fuzzy on the details (fiscal authorities are still dragging their feet on providing implementation guidelines).
It's quite a challenge, and the administrative overhead is significant, particularly for SMBs (which fuels the existing notion that EU legislation tends to favor big companies).