UK e-book prices to rise from 1st January 2015

[HarryT]

Originally Posted by fjtorres

Home country.
And no, they do not have to take them to court in the EU first.
People have in fact been sued directly in the US for events outside the country.

It is not uncommon for people or companies to sue or be sued across borders. It is called venue shopping. It is most common in civil cases like libel or business disputes where the stakes are financial.

But that, as I understand it, can only happen when you're suing a multi-national company which is registered in the US. Eg, people often sue for compensation in the US courts, because they think they'll get larger payouts that way. This happened in the case of the "Costa Concordia" accident, for example.

If I have a dispute with my local car dealer, I can't sue them in a US court. The court would have no jurisdiction over the British car dealer.

[Fbone]

New rules from 2015
From 1 January 2015, telecommunications, broadcasting and electronic services will
always be taxed in the country where the customer belongs*

– regardless of whether the customer is a business or consumer
– regardless of whether the supplier based in the EU or outside

I took that to mean that VAT is due whether it's from the supplier or from the customer from suppliers in EU or elsewhere. A customer purchasing from US would be required to submit the VAT themselves sort of like custom fees.

[HarryT]

Originally Posted by Fbone

A customer purchasing from US would be required to submit the VAT themselves sort of like custom fees.

And that's the way it is at the moment for physical goods. If I, in the UK, buy something from the US, I may be charged VAT when it enters the UK, but if I'm not, I still have a legal duty to pay that VAT.

[fjtorres]

Originally Posted by HarryT

If I have a dispute with my local car dealer, I can't sue them in a US court. The court would have no jurisdiction over the British car dealer.

Individuals have been successfully sued for libel in the US by foreign nationals for comments published elsewhere. The cases I remember were from the UK, in fact.

Try looking at it like the owner of a small digital site: the EU say they will come after you over something you have no way to control. Do you blow them off and hope they don't really mean it or do you act as if they mean exactly what they say? They dropped the requirement completely, after all. They didn't merely lower it to a few thousand, they abolished it entirely; that means they intend to go after the smallest of the small.

I suppose some folks won't mind gambling their livelihood on the charity of the EU but many don't seem so inclined.

In the publishing environment, where most of the big vested interests in print are European, it makes perfect sense that they would use their influence to hamper ebook sales in as many ways as possible, wherever possible, so I would not be inclined to assume they don't mean it.

These are rules that Hachette and Bertlesmann and FNAC and Thalia will all approve off so this was no accident.

(Shrug)

To each their own.
I just think that the folks who are worried have ample reason to be worried.

Like these folks:

http://www.julietemckenna.com/?p=1502

[HarryT]

Originally Posted by fjtorres

I just think that the folks who are worried have ample reason to be worried.

Like these folks:

http://www.julietemckenna.com/?p=1502

If I read that article correctly, she's talking about companies in the UK, specifically, for which the situation is very clear. I see no mention in her post about companies outside the EU.

[JSWolf]

Originally Posted by murg

Delaware has no sales tax.

That's why on the Delaware side of the Delaware/Pennsylvania border there are miles of shops. And absolutely nothing on the Pennsylvania side.

It's the same for New Hampshire. No sales tax and that's why Nashua, NH has the big mall and all the shops up on Daniel Webster Highway just over the MA border.

The way to avoid the EU tax mess is to register with an address in Delaware or New Hampshire and then the site won't be trying to collect tax on digital goods. Bur I really don't see all the EU sites that can sell digital goods to the US changing the system to know the tax rate of every state in the US.

Country where customer belongs (has their main business or fixed premises, their permanent address or usually lives).

So it sounds like the EU will be trying to collect tax based on the registered address. But isn't that wrong? What if I am sitting in New Hampshire and buying digital goods from the EU? I should not be paying sales tax.

I used to know someone who lived in NH and her IP showed that she was in Boston. So if they go based on IP, they can get the tax incorrect and then that's another issue.

[fjtorres]

Originally Posted by HarryT

If I read that article correctly, she's talking about companies in the UK, specifically, for which the situation is very clear. I see no mention in her post about companies outside the EU.

People outside the EU are either unaware or just hearing about it.
I just linked to highlight that extent of the concern among those that do know.
When the informed advise is to get out...

As I said, until I see somebody with authiority say they can't or won't come after me, I will take them at their word. They say it applies globally and I would expect them to make good on the threat.

I am not in the habit of counting on the goodwill of politicians or bureaucrats.

[HarryT]

Originally Posted by fjtorres

People outside the EU are either unaware or just hearing about it.
I just linked to highlight that extent of the concern among those that do know.
When the informed advise is to get out...

As I said, until I see somebody with authiority say they can't or won't come after me, I will take them at their word. They say it applies globally and I would expect them to make good on the threat.

I am not in the habit of counting on the goodwill of politicians or bureaucrats.

Time will tell, I guess.

At least HMRC has made a useful concession for British companies, which is that the new rules won't apply to domestic sales, but only to those in other EU countries, which should make life a lot easier, in that small businesses that aren't registered for VAT won't have to become VAT-registered for their domestic sales.

[pdurrant]

Originally Posted by HarryT

At least HMRC has made a useful concession for British companies, which is that the new rules won't apply to domestic sales, but only to those in other EU countries, which should make life a lot easier, in that small businesses that aren't registered for VAT won't have to become VAT-registered for their domestic sales.

Good.

I'm conflicted on this one. I like the idea, but the implementation seems to suck. They really, really, really, should have had a minimum turnover requirement before the rules applied.

[jbjb]

Originally Posted by HarryT

At least HMRC has made a useful concession for British companies, which is that the new rules won't apply to domestic sales, but only to those in other EU countries, which should make life a lot easier, in that small businesses that aren't registered for VAT won't have to become VAT-registered for their domestic sales.

But it does mean that they will have to take steps to restrict their online sales to UK customers, and presumably keep the records to demonstrate that. It's not always going to be trivial to determine and demonstrate the true location of the purchaser.

/JB

[jbjb]

Originally Posted by pdurrant

I'm conflicted on this one. I like the idea, but the implementation seems to suck. They really, really, really, should have had a minimum turnover requirement before the rules applied.

Agreed 100%.

If, for example, my teenage son wants to supplement his pocket money by having a website to sell some software that he's written, it seems insane that he'd have to go to all the pain of VAT registration, working out for each customer how much VAT to charge, etc., just for the sake of a few pounds of income.

/JB

[HarryT]

Originally Posted by jbjb

But it does mean that they will have to take steps to restrict their online sales to UK customers, and presumably keep the records to demonstrate that. It's not always going to be trivial to determine and demonstrate the true location of the purchaser.

/JB

I agree. Just saying that it makes a bad situation slightly less bad.

[HarryT]

Originally Posted by jbjb

Agreed 100%.

If, for example, my teenage son wants to supplement his pocket money by having a website to sell some software that he's written, it seems insane that he'd have to go to all the pain of VAT registration, working out for each customer how much VAT to charge, etc., just for the sake of a few pounds of income.

/JB

He won't need to be VAT-registered, just registered for the much "lighter-weight" VAT MOSS, for which the amount of work involved seems reasonably modest: a quarterly statement of how much VAT is owed to each EU member state. But you are of course correct in saying that he'll need to keep records of each customer's location, although this would probably be a part of his normal accounts anyway.

[jbjb]

Originally Posted by HarryT

He won't need to be VAT-registered, just registered for the much "lighter-weight" VAT MOSS, for which the amount of work involved seems reasonably modest: a quarterly statement of how much VAT is owed to each EU member state.

Which still involves determining purchaser's location, keeping fairly onerous records to prove that location (for 10 years!) and working out which of the umpteen VAT rates applies to each sale.

Seems pretty painful for a teenage kid wanting to make a few pounds from his website.

From what I can see, VATMOSS helps with paying the VAT owed to the EU authorities (a single payment via VATMOSS rather than a separate payment for each country), but doesn't help much otherwise.

/JB

[pdurrant]

Originally Posted by HarryT

He won't need to be VAT-registered, just registered for the much "lighter-weight" VAT MOSS, for which the amount of work involved seems reasonably modest: a quarterly statement of how much VAT is owed to each EU member state.

Being VAT registered also requires at most a quarterly statement. MOSS is actually a lot more complex. (Just not as complex as actually registering for VAT in all the EU states!)