I'm afraid I'm totally ignorant of these tax regulation changes - could some kind soul give me a precis?
(Does this affect eg. PDFs downloaded from the Innsmouth House store, for instance?)
I will attempt one, but am no expert.
To tackle multinational tax evasion, the EU is changing rules on VAT for digital services. They now will be charged on the customer's country, rather than the supplier - the aim being to stop Amazon et al. from "providing" all their digital services from a small cardboard box in Luxembourg. A laudable aim.
Unfortunately, this means suppliers of paid-for digital stuff are being required to register for VAT in every single country where their products are bought. A hack offered by HMRC was to avoid all the admin by using a one-stop service VATMOSS; however, using this would automatically make you liable for VAT no matter how small your turnover. The normal threshold is £81k so that's a pretty massive difference!
(An early build would have forced you to pay VAT on UK sales despite the threshold; this has now been returned to the normal threshold, but non-UK sales remain a problem.)
So selling digital stuff within the EU will incur a potentially massive admin headache and substantial costs dealing with that, but it's also very difficult to avoid if you're an online seller. Also, everyone hates region restrictions and you're not exactly going to make friends by telling potential customers that you won't sell to them because of where they live. The compliance looks like a nightmare (2 proofs of address to buy a PDF?) and suggested workarounds are not really feasible for small traders, who are often one-person or family businesses. So while Amazon etc. will hopefully be affected, in some ways big companies will manage much better under these rules.
Edited by Shimmin Beg, 04 December 2014 - 01:00 PM.