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EU threatens flightsim developers - New EU VAT-regulation is coming in 2015

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"On 1 January 2015, a new EU ruling concerning value-added tax (VAT) on telecommunications, broadcasting & electronic services comes into force. It should ensure more fairness in the EU-wide VAT distribution but tremendously affects small one-man-businesses or startups as they commonly exist in the flightsim community. Francois Dumas effectively closed his FSAddon online store yesterday facing the expenditure connected with the new regulation. What you need to know about regulation number 1042 /2013 can be found over at flusinews.de".
 
EU threatens flightsim developers simply isn't true.

The EU is changing the tax rules to cover all sales of digital services (broadcasting, telecommunications and e-services) from a business to a consumer (private individuals and non-business entities).
 
Sure, not only flightsim developers are affected, everybody is. This is also included in the article. But in flightsim business, there are companies which are managed by just a few people and such small companies are affected especially hard. To relate this to flightsimulation: EU threatens flightsim developers. Not particulary, but they do.
 
Helifan123 said:
But in flightsim business, there are companies which are managed by just a few people and such small companies are affected especially hard.
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That is true, but there are many other companies "which are managed by just a few people and such small companies are affected especially hard" other than flightsim developers, and I suggest there will be many more of those.
 
Of course. But as a flightsim media website, I wanted to relate it to our hobby - makes sense, doesn't it?

I see your point but in my opinion, we should relate it to flightsim as this is what we're discussing about ;)
 
The EU, and its member states, aren't going to change its tax rules for a tiny number of small flight simulator developers. I doubt the EU even knew about flight simulator developers, never mind threatening them. Anyway, let's see how many do go out of business?
 
I think this is a bit sensationalist. People aren't going call it a day for having to calculate VAT on a buyer basis, all buyers signed up on Simmarket on FSpilotshop have their home nations selected.

Lane Street said:
FSAddon has already announced they intend to stop selling digital content in the EU.
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Yeah the opening post said.
 
To quote Francois's post elsewhere:–

Part of the new regulations is that companies are FORCED to not only REGISTER all customer details (which in my view is against quite a number of privacy laws from the same EU), but they also need to PROVE the location and correctness of those customers !! That is one of the reasons I cannot comply.... I don't have the time, nor the means to do such things.
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If the new tax laws do not require these things then there's no reason to fuss. If they do then there is.
 
Good grief! I can certainly understand why Francois is shutting down his direct distribution (where he obviously doesn't have to pay a commission to a distributor), the record keeping requirements alone are enough to preclude small business owner/operators from self-administration of this convoluted system.

Even with the "MOSS" handling submission of a single tax return, and taking care of distribution of the tax revenues to each nation, I can only shudder at just how difficult filling out and submitting such forms as required will be.
 
I would think that the cost of this will just be passed on to the consumer by most developers. So...looks like nothing changes for me because I have no money to spend on that stuff anyway, but everyone else, however...meh, I don't see this being good for the community no matter how you slice it.
 
n4gix said:
Good grief! I can certainly understand why Francois is shutting down his direct distribution (where he obviously doesn't have to pay a commission to a distributor), the record keeping requirements alone are enough to preclude small business owner/operators from self-administration of this convoluted system.

Even with the "MOSS" handling submission of a single tax return, and taking care of distribution of the tax revenues to each nation, I can only shudder at just how difficult filling out and submitting such forms as required will be.
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It depends entirely on what country in the EU you live in. For example in the UK the VAT threshold is above £80,000. Here it depends on the type of work you do. For example for an artist the threshold is EU5,000 for a self employed professional there is no threshold. The Eu is all about common wealth. But vat totally destroys that. For example an artist in the UK doesn't pay vat for exhibiting etc. (unless of course their artist's income is over the threshold). But for an EU artist wanting to exhibit in the UK there is no threshold. So no commoness there then!

For a self employed professional here the taxes are the highest in Europe. 23% income tax + 22%vat + 28% inps(national insurance for health and pensions)

So your actual income is only 27% !!

It boils down to keeping all receipts and invoices which any business shoud/would do. And as I said above it also depends in which country in Europe you're based if there is a vat threshold or not. I don't know about the Netherlands. Here for that kind of work you would pay vat on every centessimo.
In UK I'm certain that one would be exempt being below the annual turnover of £80,000 plus. Vat is a pain in the nether regions of that there's no doubt. And, if Brussels had their way we in Europe would all be paying more than 30%vat on all goods and services. Which would mean here that only 19% of self employed income would be "take home pay!"
 
Forget about the treshold. It is just for the UK VAT, not for EU-wide VAT. Say you have customers just in the UK, you could sell products up to £81,000 without charging VAT from your customers. But with the new VAT system, you need to pay VAT in Germany, France, Denmark, Italy etc. - there's no minimum treshold anymore!

Amanda Tickel, tax partner at KPMG UK, says: “It’s important to understand that the UK threshold of £81,000 is not being removed and micro-businesses selling digital services to customers in the UK can still trade VAT free as long as they are below that threshold.

“What is changing is that all sales of relevant digital services to EU customers outside the UK will be subject to the local VAT regardless of the value of the sales as there is no minimum threshold.”
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Source: the guardian
 
To quote Francois again from the same SOH thread:–

With the new rules I need to calculate 75 different tax rates depending on where a customer lives and what he buys...... 29 rates at the very minimum. My current shop software can only calculate 3, and I cannot change that.

But in addition I need to be able to show TWO bits of proof regarding every customer's location, his/her full credentials and address, IP address and all order details.

I need to do this twice. Once for the regular VAT for citizens of my own country, and then once for all other EU customers separately.

Furthermore I have only 20 days (was 30) to report after end of quarter, I need to have a special permit for it AND I need to keep all records for 10 years.
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I don't think he's kidding.
 
Helifan123 said:
Forget about the treshold. It is just for the UK VAT, not for EU-wide VAT. Say you have customers just in the UK, you could sell products up to £81,000 without charging VAT from your customers. But with the new VAT system, you need to pay VAT in Germany, France, Denmark, Italy etc. - there's no minimum treshold anymore!



Source: the guardian
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Not quite! Selling into the uk from the rest of the EU will attract vat at a zero threshold. The £81,000 limit applies only from within the uk.
 
It appears that FSAddon will be able to continue without any european customers - except those in the Netherlands.
 
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