Dreaming of Summer Colors (& New EU Taxes you should know about!)
Shall we get the not-so-nice stuff out of the way first?
The New Not-Well-Thought-Out EU Digital Tax Laws hit Worldwide on the First of the Year
If you haven’t already heard, the European Union has new laws regarding selling digital products and services to European buyers, and it goes into effect January 1st. Unlike past VAT taxes that rarely, if ever, affected micro businesses and solo sellers, this one affects everyone who sells any digital goods or services TO Europe because this new law is based on where the buyer resides, not where the seller works. Yes, even you, you seller of $3 PDF tutorials! It’s a tad insane, and most of us small, struggling businesses and artists just found out in the last couple weeks that we need to register with the EU, implement new bookkeeping & documentation storage for at least 10 years, update shopping gateways and our websites, and possibly change who/what we sell through, and we need to have it all ready before the year ends in order to offer digital goods and services to Europe in 2015 and forward. Or, we can change to whom or how we sell digital stuff. Ugh!
I wanted to inform you all of this, so you have a chance to find out if this affects you as a seller of PDF tutorials, eBooks, patterns, subscription or member services, online advertising, or automated online services of any kind and allow you time to figure out what to do. AND, to be heard if you agree that this tax is detrimental to micro and solo businesses.
Please Help. Take Action to Fix this.
Get informed, and sign the petition to have a threshold set, so small, unique sellers don’t have to pull out of Europe or go out of business because they can’t afford to comply. You can find out more about the issues with the new laws on EUVATACtion.org and get the official summary of them on www.gov.uk.
The only possible salvation for many of us will be a service who can take care of the nightmare of documenting, setting up calculations, collecting and remitting the tax for you for all of the 28 European countries involved. There is only one viable service I have found so far, and they even offer it for free (up to 20 EU transactions a month), if they can integrate through your Paypal or similar payment service. If you think you’ll need this, write them at www.taxamo.com to find out if they can work for you.
Prices will Go Up; Buy or Renew Now
This sudden news does not give us here at The Polymer Arts enough time to make the changes needed to collect VAT on our digital magazine sales, so we will be using an exception in the law and will have to individually email digital issues of The Polymer Arts to European readers as of next month. This will be costly labor-wise, so we’ll have no choice but to increase prices for these manually sent issues. But, this will cost the European buyer far less than paying VAT. So, if you’re in Europe and you haven’t renewed or bought those back issues in digital that you were thinking of getting, now would be the time to do that. Just go to our website, www.thepolymerarts.com/Subscribe.html, before the end of the year when prices for European digital purchases will go up.
Back to Color …
How about today we have a moment of color indulgence with color maven and polymer pioneer, Lindly Haunani. Aren’t these colors just yummy. I know that’s not the most technical artistic term, but that about sums it up!
This image is a preview of what she’ll be teaching at Maureen Carlsons Center for Creative Arts. The workshop is entitled “Joy Garden: Translucent Polymer Innovations”, and it’ll be held Sunday, August 9th – Friday, August 14th, 2015. Yep, it’s about time to start planning for summer fun, don’t you think? Okay, maybe it’s a ways off, but you probably want to grab a spot in this workshop sooner rather than later and for those of us seeing snow out our windows, it’s kind of fun to dream about summer isn’t it?
Lindly’s blog and website, as well as her book and DVD set, are a wealth of information on color. Just jump over to her website to get links to all her wonderful stuff.
If you like this blog, support The Polymer Arts projects with a subscription or issue of The Polymer Arts magazine as well as supporting our advertising partners.
I live in the UK and I wasn’t aware of this new law but agree totally that it is unfair to small business. A lot of tutorials that are available to me are created by amazing artists in the USA and Canada and I would hate to lose that gateway to improving my techniques and have signed the petition accordingly.
Thank you for the very cheery, and yes yummy is the right word, beautifully coloured creation. On a cold, windy and wet winters evening, it does indeed conjour up lovely warm days and gorgeous blousy flowers.
Thanks Jo! Yes, one of the huge problems with this tax legislation is no one knew about it. They say they’ve been disseminating information on it’s impending action for 6 years but I only know of one person who knew about this more than a month ago. Makes you wonder if they kept it quiet so we woudln’t have time to gather and make efforts to block it. Right now there’s no time to make major changes, but maybe we can halt implementing it for small businesses using existing thresholds precedents until a manageable solution can be found and implemented. I get why they want to collect tax and I’m okay with that but don’t kill small business on the way. That could have serious repercussions for a country’s economy as well us so many individuals. Thanks for signing and spread the word if you can. We don’t want to limit what our European friends can get from the many wonderful small creative businesses out there. 🙂
From this quote, only UK businesses are affected.
“Who needs to read this? UK businesses that make cross-border Business to Consumer (B2C) supplies of digital services to customers in other EU member states, particularly micro and small businesses.”
from: https://www.gov.uk/government/publications/revenue-and-customs-brief-46-2014-vat-rule-change-and-the-vat-mini-one-stop-shop-additional-guidance/revenue-and-customs-brief-46-2014-vat-rule-change-and-the-vat-mini-one-stop-shop-additional-guidance
There is a lot of misinformation out there but no, I’ve read the entire summary and detail release and it certainly is not only a UK issue. That statement you pulled has to do with their reader audience (that is a UK site). These laws affect any seller that sells digital to the European Union. That’s well established as the worldwide action sites will attest to.
Thanks for correction!
After reading your post we did a little investigating and discovered that your information is misleading. It is a tax on digital “SERVICES” and not selling a simple tutorial or e-book on line. If you sell a regular digital subscription — then yes that would maybe apply but not for the individual selling online. Here is an article that explains — specifically read the first paragraph in the section titled: Supplies of digital services – the basics. It says it all.
http://www.nortonrosefulbright.com/knowledge/publications/118911/vat-on-digital-services-a-brave-new-world
Unfortunately, the EU is defining “services” as anything sent electronically, including PDFs of any kind such as tutorials and ebooks which are specifically mentioned as falling under the tax law in the paragraph you mentioned. There are numerous discussions online both in and outside official forums about the single PDF download, especially by crafters who sell PDF patterns and the answer to them is that yes, it falls under the tax. Here is the official list as released by the HMRC themselves. As you see, “digitized documents, such as pdf files” is specifically mentioned.
HMRC has clarified the change is only intended to impact e-services, such as:
Images or text, such as photos, screensavers, e-books, and other digitized documents, such as pdf files;
Music, films, and games, including games of chance and gambling games, and of programs on demand;
Online magazines;
Website supply or web hosting services;
Distance maintenance of programs and equipment;
Supplies of software and software updates; and
Advertising space on a website.
– See more at: http://tax-news.com/news/UK_Issues_Extra_Guidance_On_2015_VAT_MOSS_Changes____66693.html#sthash.nKt3ll9D.dpuf
Since there is no threshold for minimum sales amounts, it presently affects every single sale made to the EU, even by individuals, if they have the purchase automatically sent in the purchase process. The workaround is to send those PDFs manually then no electronic “service” is used. Absolutely silly, I agree, but that is a big part of why there is such an uproar. This does not seem to be a very well thought out set of tax laws.
Yes that article explained it more clearly. Thanks Sage.
We have come up with a simple solution. We sell from several venues. One is Artfire where they do not have an instant pdf file download so the tutorials have to be e-mailed out manually so not a problem. With our Etsy shop, however, we will be providing several listings for our tutorials. The instant downloads will not be available to EU customers but separate listings where the tutorials will be e-mailed manually. Although we love the convenience (from both ends) of the instant downloads but not having to deal with a VAT tax would be more of a pain. This might help others deciding what to do.
Thanks again for the info.
Carolyn