[Vtigercrm-developers] VAT changes and the marketplace

[Alan Bell]

On 25/11/14 13:25, Sreenivas Kanumuru wrote:
> Alan,
>
> Thanks for bringing attention to this important matter. Fortunately, 
> there isn't much cause for concern.
yes, certainly not as bad as it could be because it isn't consumer sales
>
> Marketplace sales are made by Vtiger (USA entity) to customers. Vtiger 
> buys from Publisher, and then sells to customer. So, for the 
> publisher, there is only one customer which is Vtiger USA. Since, the 
> publisher is selling to Vtiger USA, my understanding is that even 
> EU-based publishers don't have to pay any VAT taxes,
the problem is that they are now looking at where the final user is, it 
is called "use and enjoyment"! So, they can look at the whole chain and 
determine that the digital goods ended up being consumed in the EU, by a 
consumer (or non-registered business) so we have to prove that didn't 
happen.
http://www.hmrc.gov.uk/manuals/vatpossmanual/vatposs15100.htm
>
> For keeping records, Vtiger collects the business name, country, and 
> Tax ID when customers purchase via the marketplace. So far, all our 
> purchases have been by businesses. Sales to consumers are going to be 
> quite rare, and the total sales to consumers within a country will be 
> below the 100,000 Euros limit (per year) for the near future.
this is great, I think EU publishers might need this info (in particular 
VAT numbers) at some stage, but as long as it is being captured and we 
are not selling to anyone without a VAT number then I think it is OK.
>
> Regards,
> Sreenivas
>
>
>
>
> On Tue, Nov 25, 2014 at 5:20 PM, Alan Bell <alan.bell at libertus.co.uk 
> <mailto:alan.bell at libertus.co.uk>> wrote:
>
>     there are a bunch of really stupid changes in the pipeline for VAT
>     across the EU, you can read about them here
>
>     http://onemanbandaccounting.co.uk/eu-vat-changes-2015/
>     http://www.mercerhole.co.uk/p/e-business-01-january-2015-changes
>
>     and there are more details here:
>
>     https://www.gov.uk/register-and-use-the-vat-mini-one-stop-shop
>     http://ec.europa.eu/taxation_customs/taxation/vat/how_vat_works/telecom/index_en.htm
>
>     Now pretty much all vtiger marketplace purchases are not going to
>     be from private individuals, but are going to be business
>     purchases, I think there probably isn't a problem if the
>     marketplace captures some kind of evidence that the customer is a
>     business, so probably the name of the business, the country and
>     the VAT number if they are in an EU country. That means that
>     companies purchasing modules need to do a reverse charge
>     accounting for the VAT and people selling through the marketplace
>     are going to need that data as evidence they are not selling to EU
>     consumers.
>
>     If someone does want to purchase a module as a consumer in the EU
>     then things get dramatically more complicated, we have to capture
>     two non-conflicting bits of evidence about what the country of
>     supply is, find out the VAT rate in that country and charge the
>     consumer this VAT. The VAT needs to then be paid to either the
>     correct country, or pick a country and register for the MOSS and
>     fill out one monster return (in ODF, which is nice) and pay over
>     the VAT collected.
>
>     Alan.
>     _______________________________________________
>     http://www.vtiger.com/
>
>
>
>
> _______________________________________________
> http://www.vtiger.com/

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