[Question] Out of Interest - VAT on Digital Goods / Data

[lewskannen]

I just have a quick question in regards to the new VAT on digital goods or access to data.

Firstly, does this VAT apply to digital goods or paid member services too?

Should you go and register for VAT, even if you earn less than a million per year, in order to pay this? How does one go about?

[Dave A]

I'm fascinated as to how exactly this is going to work too.

Just to add fuel to the fire, we're not alone and the technicalities of registering might be the least of the challenges ahead with this...

Apparently Europe is also heading towards Value Added Taxes being based on the location of the buyer, (as opposed to the location of the seller as it is currently). Their target implementation date is Jan 2015.

Aah - just found the article that caught my interest a couple of weeks ago - VAT change to online sales: not just a tax concern

It's going to be an interesting transition, methinks.

[lewskannen]

I'm fascinated as to how exactly this is going to work too.

Just to add fuel to the fire, we're not alone and the technicalities of registering might be the least of the challenges ahead with this...

Apparently Europe is also heading towards Value Added Taxes being based on the location of the buyer, (as opposed to the location of the seller as it is currently). Their target implementation date is Jan 2015.

Aah - just found the article that caught my interest a couple of weeks ago - VAT change to online sales: not just a tax concern

It's going to be an interesting transition, methinks.

Dave, I agree 100%.

Since many of my clients are from US, UK and Europe, I am not sure where or what I should start doing. Let alone what needs to be done here in SA.

It will indeed be interesting...

[sterne.law@gmail.com]

Ecommerce is raising all sorts of challenges, not least being tax and VAT.
Part of it is the paper trail - it can be no existent.
Then cyberspace is not a jurisdiction.
Then location where a deal occurred is challenging.
A person could sit in one country, transact through a server in another, and the seller is in a third and funds may move from a fourth country.
A deal is concluded on different occasions depending on web site set up. Click wrap, return email etc etc.

You also have the issue of residence. Residence is defined differently, so a mover could never be resident. They have used residence as a factor because it is much easier to gauge than where a transaction took place.

Throw in country jurisdiction and collecting becomes a challenge. All very well that location of customer gets the VAT, but he paid to someone else. How does country A collect from the guy in country B

[Dave A]

Let's all keep our eye out for any useful information and share it here...