|
|
|
|
|
|
by speleding
4203 days ago
|
|
|
Good points, awareness certainly is an issue. I found out a few months ago and just finished updating the payment system for my site. I have learned a few more interesting gotchas: - You are responsible for verifying the location of your buyer (how? who knows!) - It is not enough to know the country code of your buyer. For example the Canary Islands have country code ES but have a different VAT rate from mainland Spain - Some VAT rates can be fractional, so you can run into problems if you were using integer calculations in cents to prevent rounding errors (thankfully, for digital services all VAT numbers are round number starting this year, let's hope it stays that way) - If you register for a MOSS then you pay VAT in euros, but you may have charged your customer in a local currency (GBP, DKK, CZK or SEK). You need to use the exchange rate at the day of the sale This is just the top of my head, there are probably a bunch of minor issues I forgot. |
|
|
I'm not sure this is exactly correct. For the UK, the guidance[1] at the moment says:
"If you charge or invoice customers in a currency other than the one used by the MSI and you record that price in your accounts in the foreign currency, you must:
- convert it into the MSI currency at the end of each quarter
- use the conversion rate published by the European Central Bank (ECB) on the last working day of the quarter
However, if to meet VAT invoicing or other accounting requirements you convert the foreign currency into the MSI currency using an agreed published daily or monthly conversion rate, you can use this converted figure when completing your quarterly VAT MOSS return."
In the above, "Member State of Identification (MSI) is the state in which you’ve registered for VAT MOSS."
So it looks as though there are three possibilities here:
1. If you charge customers in your own native currency, then you just have to apply their location's tax rate on the transaction, instead of applying your local tax rate as at present.
2. If you charge customers in their own currency (or any other that isn't your native one) then you have two options:
2a. You convert the amount charged to your native currency at the time of the charge, and use that figure and the customer location's tax rate to calculate the tax due.
2b. You record the transaction in its actual currency at the time of the charge, and then later you convert to your native currency according to the standardised exchange rate published by the ECB at the end of each quarter, use that figure to calculate the tax due, and use these figures when you file your MOSS return for the quarter that just finished.
But I'm not an accountant, and like many here I've spent too much time in recent weeks just trying to get straight answers and figure out what all the "guidance" really means, not to mention trying to find out minor details like what the current tax rates to use for each location actually are (including variations within individual member states) and how we're supposed to keep up with any changes in the future. So don't take my word for anything, I'm just trying to interpret some official guidance like everyone else...
[1] https://www.gov.uk/government/publications/vat-supplying-dig...