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Paypal could do something like that, it would be very easy for them.
However you will not be able to check the user and abuse will hit the fan.
However you will not be able to check the user and abuse will hit the fan.
There is a bit of chatter on the web about paypal coming to the rescue, sadly I think if they were going to they would have by now.
They could do it in theory by putting additional verification checks in place and beefing up the fraud service they offer already while charging a premium for chargeback protection i.e. a kind of insurance that means the onus and penalty is on them not you.
Skrill keep 10% for 180 days of all taking for this as an example and call it a reserve.
While those are valid points, it is not what I meant, I was talking more about the illegal hosting, spamming, botnet operators, stuff like that, when the police will come they will not take it lightly to be sent to Paypal to ask questions.
Fair point, the rarity of that situation would not in isolation prevent paypal from doing this though when it could lead to many millions in additional revenue for them, I have only had 2 official police requests for info in 4 years.
This means police there is much more competent than in Italy. They ask for info every month or so, because italian telco companies are required to keep the logs and they hope to find something on some targeted people, but we do not have the logs because we are not telco, so we become a target instead.
You know the drill, if you have nothing to hide, why not give us the logs?
Do you use EdgeHosting's Xero <=> WHMCS bridge?
That's the one I have tested, I have not gone live with MOSS yet though and don't plan to link Xero until the 1st.
Has any other US host contact their accountant related to this? If so, what have they said/suggested?
HostGator updated thier VAT info page, may assist with other US and none EU companies wondering if they are duty bound to comply: http://support.hostgator.com/articles/pre-sales-policies/payment-fees/european-union-value-added-tax-vat
Tax authorities to communicate world wide, so I imagine that if you file your return in the USA if the IRS believes you should be paying VAT to the EU then they will simply notify and report. that is just a best guess though.
Looking to be established as a Mexican company?
I'm probably going to just stop selling services in the EU (apart from the UK), the amount of extra work due to this (including now having to sign up as a Data Collector with ICO) is just not worth it for me. Still thinking it all over but it's tending towards that direction. It's a shame since our hosting sector had a good run with everyone but what can you do. This new law does not help small (digital) businesses in anyway apart from reducing the amount of them and therefore making the strain on the government easier since larger businesses are easier to identify now. Something needs to change since I'm sure more jobs by small businesses (and allowing small businesses to exist!) is better than this.
Very interesting and helpful information here (much more organised and actually useful compared to HMRC): http://rachelandrew.co.uk/archives/2014/11/20/implementing-the-new-eu-vat-rules/
Good luck to everyone in the new year!
I think the real issue here is surveillance, the fewer small companies there are, the easier the bullying.
This is key, a contingency for errors is also going to be a must to ensure you stay out of trouble. Roughly translated my own accountants said "Train Wreck Incoming!"
Long live Bitcoins
It just annoys me, ok there is a very /slight/ argument to having the place of supply changes. But I see absolutely no reason to completely ignore the thresholds and make it impossible for small businesses to operate with a heck of a lot of paperwork. If they allowed people below the threshold in each country they sell to to not have to report VAT then it would be acceptable.
It's a shame because if hosting was our primary source of income we would just deadpool because as a small host the additional workload and cost of accounting for all of this (submitting multiple VAT returns) and corporation tax is just a nightmare and would cost more than our annual income.
I guess this shows that hosts needs to diversify but it also shows how ridiculous these regulations are. Gah just my 2 cents but this has been a huge headache since the start.
Final note is that I don't think October 2014 -> 1st January 2015 is enough time to prepare for this and I think the media only just catching wind of these rules and publicising them fully enforces this point. Thank god @AnthonySmith warned us of it early in the stage :-)
Nah. It's not so bad. I agree that it will affect microhosts but atleast in UK bookkeeping is not so hard. Try to run small business in PL even without MOSS ...
The problem is now that a new host in the EU from day 1 has to register for VAT, corporation tax, MOSS and register as a data collector no matter whether they're just selling a £1/month server to a long term software development customer or £1000/month in lots of sales. It's hard to start a new business with these rules enforced.
True, but it's just another factor which you need to consider when planning new business. Filling the CT600 is three hours task once a year. I assume that most of the accounting software vendors already provide VAT support and will add the MOSS support. It's enough to keep the dates.
So it still sounds like the only companies who are changing any policies are the ones that are already charging VAT; now they have to charge in customer's country, preventing them from offering lower prices by registering in country with lower tax rate.
The only people who seem to be claiming that EU is suddenly going to ramp up its enforcement efforts are those like taxamo.com who sell services to comply with EU VAT requirements. I'm not aware of any non-EU countries that have a formal agreement with the EU regarding the taxes; in fact, U.S. government officials say they're concerned about the impact the VAT might have on businesses.
Yep it is a question of perspective, it is not really about formal agreements it is about local requirements in my opinion.
For example it is illegal to sell cigarettes online in the state of Florida, just because I am in the UK does not make it legal for me to sell cigarettes to citizens in Florida online, but at the same time no formal agreement between the UK and USA/FL exists to say I cant... I just cant.
It seems pretty clear that apart from free trade agreements between countries there is no official agreements between the EU and non-EU countries on enforcement of this policy.
However the EU has clearly stated that by law if you wish to trade with the EU you must pay the VAT in the applicable member state.
Sure they cant force you and sure in most cases they will have no way to get your own government to collect it for them but.... before anyone outside of the EU decides not to comply please consider the bigger picture.
If you have assets in the EU, they could be taken, if you rely on any licenses from EU registered companies like WHMCS, OnApp, SolusVM to name a few your non-EU company could have trade restrictions placed preventing these EU companies from doing business with you, same applies even if you just rent server in the EU.
IMO the only people that will 'get away with it' are non-EU companies that do not depend on other EU businesses in any way shape or form, i.e. own software, own non-EU equipment etc etc.
I also don't expect anyone to be hit on day 1 but within 6 - 18 months the first large victims will be in tears no doubt.
How many of you after this is introduced will use this as a way to determine which providers you should use? Sure it's a bind and extra cost for the the end user and you may not care depending on your needs however if it's something important and you want to ensure it remains active at a trusted host would you check if they are registered?
I know I would and I suspect many others will, perhaps this is a small step to clearing out the rubbish.
@W1V_Lee it is a hard one, I am about 95% sure that at least 80% of all hosting companies are not even aware of this to begin with and honestly I don't blame them, I used to work with the tax and revenue service very closely and I only found out about this a few months ago despite it having been in the works and documented since 2006
Right now my biggest concern is do I charge VAT or absorb VAT, the thing I really hate about this is that for B2B its fine, charge VAT, if they dont have a VAT number they can offset it as a cost on their own TAX anyway if they are registered then it does not apply anyway (only on paper), but for B2C there is only 1 way to see this.... your price just went up by 20% and you cant claim it back.
So rather than putting up 80% of my customers prices by 20% I may just take the hit and restructure prices for future clients only.
Time is running out though, that is for sure.
I am not sure what y'all mean. It is the buyer country to which you will charge VAT rate at. In average it is way over 20%, I think, you will not charge VAT for non EU states like before, you will not charge for businesses. For Prometeus, it is like before, except it will be more of a paperwork if we dont sign with MOSS or if WHMCS wont automatically do it, I am not sure, but I think the average is below 22% which is the rate in Italy so, in average, our prices will go down a bit.
The problem is with Iperweb LTD in UK which is VAT exempted, we will probably have to refer all customers from other (than UK) EU countries to Prometeus. The prices were comparable, the difference being that prometeus prices were in eur and we were adding VAT while Iperweb ones were in GBP and we were not adding VAT, but the difference was low. The overhead of keeping a UK presence for sales below 5 k a month just about made it even from costs point of view too. It will keep the strong UK customer base as well as the "off-shore" ones, in total probably more than 80%.
Nobody will die, it will be a bit of a problem for a few months, I am thinking we should do a big promo for Eu customers so they can sign up for a few years prepaid if they wish or move to Prometeus with a 10% recurring discount or something.
Not with MOSS, you charge at a single rate I don't know what that is yet though tbh.
I agree the lead up has not been as well advertised as it should have, hell for the money it will generate they should have done much better.
Unfortunately though as you well know, when it comes to taxation, there are no excuses when you are not registered, should have been and have and get a
letterdemand that says you owe £x and it's up to you to prove otherwise, not them.Guessing this hasn't yet been announced then? I assumed the same as @Maounique, that even with MOSS you'd have to charge the specific rate for each country. It definitely looks like MOSS is the route to go - the lesser of two evils, as it were.
I don't understand it that way. You still have to charge each user with their country's VAT (and account it and pay it separately, per country). However with MOSS you do these reports and payments to your local tax agency, which then resends the payments to the foreign tax agencies. Without MOSS you would have 28 tax agencies to report and pay to.
it is like Maonique said, even with MOSS you have to charge at VAT rate given by customer country!
MOSS is only there for you to not have to register in every country individually, but you still need to charge different VAT rates...
There is no single rate, you charge whatever rate for the country the customer is based.