On Jan 1, changes in the EU VAT law comes into effect: regardless of whether you are VAT-registered or not, for digital services (e.g. image/video downloads) sold to consumers, VAT applies and the VAT rate is the customer's country's rate. Previously, if you were VAT-registered, your own country's VAT rate was the one to apply.
These changes don't apply to sales within your own country, nor to sales of physical goods (e.g. prints).
What should I do now?
If this change applies to you and you haven't done so yet, it is important that you register to the Mini One-Stop Shop (MOSS) system, that allows you to report your EU VAT sales to a single portal in your country. If you don't do that BEFORE THE END OF THE YEAR, you'll have to report sales to every country you're selling to, which is obviously something you'll want to avoid.
In addition, you should also create a new, separate tax profile for your downloads/stock sales (downloads and stock) to the EU, and apply it to the relevant pricing profiles when the year changes.
How does PhotoDeck help?
- We've created for you a new tax profile template with all current VAT rates pre-filled. You simply have to de-activate the VAT exemption for companies in your own country (as previously, companies with a valid EU VAT number shouldn't have to pay VAT except if they are in the same country as you). If you're not VAT-registered, you probably want to completely remove the VAT for your own country.
- As part of this law change, to avoid abuses the seller (the photographer) is required to keep 2 pieces of proof of the customer's country, and these 2 pieces should agree. These 2 pieces can be the billing address, and the buyer's IP address, which we've now added to your admin space for each order. Note that if these don't agree, we don't block the sale -- you will simply have to followup with your customer to have him confirm his location.
PhotoDeck is not qualified to provide tax advice: for more information and to make sure you comply with the law, please contact your accountant or your local tax office!