On January 1, the European Union (EU) is changing the way Value-Added Tax (VAT) is applied to digital goods. And its rules affect not only member countries, but countries outside of the EU as well. So, if you are selling digital goods (ebooks, music, apps, etc.) to someone who lives in the EU, the business — not the consumer — is responsible for the collection and remittance of the necessary VAT. This, of course, is a reversal from traditional VAT collection, which placed the burden on the consumer (if at all).
In an attempt to streamline the operation, the EU has set up the VAT MOSS. That stands for Value-Added Tax Mini One-Stop Shop. Basically, under this ruling, you don’t have to track sales to France, Great Britain, Spain, etc. — rather, you track all EU sales and make a single remittance to cover all of your responsibilities.
This, understandable has EU businesses that trade in digital goods (such as webcartoonists) in a major panic — just follow the #VATMESS Twitter hashtag for a taste. Meanwhile, here in the states… crickets — even though the ruling seems to affect US businesses selling to EU consumers.
So, what does this mean to webcartoonists?