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[StrayCatRock]

As the year is ending, 2015 is coming and with it we get a new EU law about VAT.

At the moment, your VAT is calculated at the rate of the country where you're operating and this rate is applied to all your customers. Example: I apply the Belgian rate (21%) on all EU customers regardless of their country.

In 2015, the VAT on B2C transactions will be calculated at the rate of the customer's country. Example : I live in Belgium but for Hungarian customers, I'll have to apply a 27% rate and for Cypriot ones that will be a 15% rate.

For those around here who runs a business (as an individual or as a company), it's important to take this into account because the taxman can be unforgiving  Depending on how you sell your games, you should make sure that your download/payment service complies with the the following requirements:

    *Identify EU and Non-EU transactions
    *Collect & store customer location evidence
    *Validate B2B/B2C transactions
    *Calculate & apply VAT liability
    *Create and submit quarterly VAT returns
    *Provide audit files for Tax Authorities
    *Securely store data for 10 years, as mandated

That was a copy/paste from the paymill blog:
https://blog.paymill.com/2015-eu-vat-rules/

The official texts:
http://ec.europa.eu/taxation_customs/taxation/vat/traders/e-commerce/index_en.htm
A more comprehensive page on VAT in telecoms and e-commerces:
http://ec.europa.eu/taxation_customs/taxation/vat/how_vat_works/telecom/index_en.htm#one_stop

An Irish explanation page about the Mini One Stop Shop (aka MOSS)
http://www.revenue.ie/en/tax/vat/leaflets/mini-one-stop-shop.html

Updated Google Play page about taxes:
https://support.google.com/googleplay/android-developer/answer/138000?hl=en

If for example, you're a musician and sell through bandcamp, be afraid of those kind of lines:
"It is your responsibility and solely your responsibility to remit the appropriate taxes (income, sales, VAT, property, estate or otherwise) to the appropriate taxing agency."
https://bandcamp.com/help/selling

Bottom Line
Check how your business partners handle that change. Discuss it with an accountant if you can afford it. Feel free to give some infos, insights or useful details in this thread. After all, it would be stupid to work a lot and getting ripped by the taxmen because of some mistakes 

[knifeySpoonie]

unnngggg Thanks EU... for adding more bureaucracy with little to no value...

thanks for your post thought it's very useful for people like myself about to go through the rigours of self employment and selling our own games in the near future. Cheers.

[WildFactor]

I think they made this change because big company cheat the system by being on the lowest VAT country to operate...
So now small guy like us pay the price now

[1kW]

unnngggg Thanks EU... for adding more bureaucracy with little to no value...

I'm livin' in Europe too and my experience says the politicians are greedy, not morrons

[Sik]

Well, politicians (worldwide) seem very good at completely ignoring on-line business, or even digital for that matter (how come we should apply the same rules to something that isn't physical and thereby inherently can't be handled the same way?).

[oahda]

vat is VAT

[Netsu]

So... now when selling anything online you need a separate price tag for every country people might be buying from? That is assuming you want the same return from every buyer.

[StrayCatRock]

So... now when selling anything online you need a separate price tag for every country people might be buying from? That is assuming you want the same return from every buyer.

Don't take my following words as authority as I don't have my business license yet...

To get the same return from every buyer, your price should be tagged without VAT and so, it pretty much depends through which service you sell your game.

I'll take "Loren The Amazon Princess" from Winter Wolves as example:

Through BMT Micro, the base price is 19,99€ and the local VAT is added during the purchase process so as a Belgian customer, I'll pay 24,19€. 4,20€ goes to the VAT and 19,99€ goes to the dev (without calculating transaction fees of course). So, with this system, you're sure to always get the same return per purchase.

Through Steam, every price is VAT included. Loren is shown at 19,99€ on steam page. So, you substract 21% (Belgian VAT rate), it leaves you with 16,52€. As in 2015, EU VAT will vary, you'll always have varying rates and incomes from different EU customers, you'll need to double your spreadsheets (one for the different VAT's to pay and one for the different net incomes). By the way, don't forget the 30% steam share cut...

As you see, it's much easier to keep track of accountability if you choose the "VAT not included" model. Maybe steam has the option to do this but I've never seen it as a customer.

TeeGee sells Cinders both through BMT Micro and Steam so maybe you could ask him how he foresees this situation.

EDIT: Well, you can also put different price tags for every EU country with locat VAT rate included if you want to keep your net income constant per customer but I think it will get confusing.

[Sik]

The problem with regional pricing is that then people will find a way to get the price from the cheapest region (which incidentally is one of the main reasons why region lockout exists).

Also I'm wondering, countries outside the EU probably are not going to accept the idea of the VAT going to another country either, so chances are you may end up with a double VAT (one from your country, one from the EU country). Enjoy the mess.

[Netsu]

I heard TeeGee saying the income from Steam was miserable as it was, I believe it will only get worse this way.

And paying double VAT is already a reality, when buying physical goods abroad I often had to pay American VAT, Polish VAT AND customs. Was still worth it with 2008's dollar prices.

[TeeGee]

From what I understand, not much should change if you're selling through Steam or BMT Micro. They both already account for VAT in customer's country. BMT Micro adds it to the price, Steam subtracts it from the dev's share.

This will affect people who sell through something like itch.io, as those services are payment platforms, not actual re-sellers - they just handle the payment/delivery system for you, but nothing else.

[Chris Koźmik]

Wasn't it always like that? Whenever I was buying (and I meant like 10 years ago) via BMTmicro/Plimus I was charged VAT according to my country of residence.

As for double VAT, please do not spread the rumours. I have never heard about double VAT. Even if your contry does not have no-double-tax treaty. It's simply not working this way.

[RudyTheDev]

What some above said.

EU businesses have been paying VAT at their country's rate since like 2003. Now they have to charge according to their customer's country (and regardless if they are VAT-registered in that country). So you can't register in 15% VAT country and charge only 15% to a customer from a 25% rate country. But now they also apply this to outside EU, so hell knows how they are going to verify everything.

Some companies like BMTMicro already charge per country. Others, like Steam, used a flat 20% rate.

[gimymblert]

VAT retro satanas :/