If you are reading this, you are probably in the tech business. That is because new tax rules come into force on January 1, 2015 in the EU that relate to the sale of various types of digital products and services. It is a big change.
The tax rules relate to value added tax or “VAT”. Europe, and the EU love the VAT. It is essentially a sales tax. And they could not help but notice that certain digital providers were avoiding VAT by selling stuff from low VAT countries. These bad boys got away with it because the rules said impose the VAT based on where you sell from. Got that?
Good. Because that is what will change on January 1, 2015. As of that date, the affected digital product sales will have to include VAT charges based on where the customer is located. Not where you as the seller are located, but where your thousands of EU clients are located. Yikes!
The purpose here is to get the bad boys to cut it out. The effects are to have lots of digital entrepreneurs ghashing their teeth and wondering what the hell they are going to do. You can find advice online.But you will have to decide what to do soon.