The Marketplace - June 19th, 12:30-13:00 On 1 January 2015 a new EU VAT directive governing Internet sales will be introduced. This directive changes how Vat is calculated and paid by eService merchants. Although this is good news for European governments, it could prove to be an administrative nightmare for e-businesses across the world with customers in the EU. From January 1, every eService provider selling to a European consumer needs to determine the location of their customer and charge the Vat rate of the country of the customer. Failure to comply could lead to serious penalties from all 28 states in the EU.

2. PRESENTATION OUTLINE
1
2
3
4
What are the changes?
Who do the changes effect?
What does this mean for you?
What do you do?

3. Previously based on
merchant location
Jan 1st 2015
EU VAT DIRECTIVE 2015
EU VAT RULE CHANGE VAT now based on
customer location
EU tax authorities have
agreed
Need to comply with 28
countries’ VAT laws

4. The Change
Today
Vat based on where the
eService Provider is based
Jan 1 2015
Vat based on where the
Consumer is based

5. Who do the changes effect?
 Gaming, e-books and distance teaching
 Software and software upgrades
 Websites, data storage, hosting, VoIP and content
 Music, films, images and photographs
 Gambling & games
 Marketplaces
 Digital goods and subscriptions

6. Numbers
• 50,000 merchants in the UK
• 290,000 merchants in the EU

7. What is the Change?
 You need to identify the country of each customer
 You need to find two pieces of non conflicting evidence
 You to apply the VAT rate of the country where the consumer is based
 You need to remit this money through the MOSS

8. How do I identify my customer?
Legislation states
 IP address
 Billing address
 Bank Details
 Mobile country code
 Other commercially relevant information

9. Two Pieces of non conflicting evidence?

10. What is the Change?
 You need to identify the country of each customer
 You need to find two pieces of non conflicting evidence
 You to apply the VAT rate of the country where the consumer is based
 You need to remit this money through the MOSS

11. What is the Change?
 You need to identify the country of each customer
 You need to find two pieces of non conflicting evidence
 You to apply the VAT rate of the country where the consumer is based
 You need to remit this money through the MOSS

12. The Gotchas
This legistlation is as a result of a compromise…
 There is no de minimis
 You need to store all data you collect for 10 years and be open to an
audit from any country in EU
 You need to adhere to Vat laws of 28 countries on invoicing (around 14
are a bit different)
 This is not SEPA – There will be no extension!

13. NON COMPLIANCE
FINES FROM TAX
AUTHORITIES
JAIL RESTRICTIONS ON
BUSINESS EXPANSION

14. What does this mean for you?
You need to start planning…

15. What do you do next?

16. ? ? W E E K S
TO GO
ONLY