[lukeredpath]

As I mention in my post below, if you're a non-EU company selling digital goods and services to EU customers, then strictly speaking these new rules don't change much - it's was already the case that non-EU suppliers that supply electronically supplied services to EU customers (B2C transactions, not B2B) should be charging the customer VAT at their local rate.

Businesses could choose to register in each state or a single one using the VoES (VAT on e-services) system. These rules have been in place since 2003.

However I imagine that a lot of non-EU companies didn't bother with this either out of ignorance or simply because they didn't care or thought it could be enforced.

Under these new rules, MOSS replaces VoES but it's practically the same thing. This mostly affects EU businesses who now have to charge the rate where the customer belongs, not where the supplier belongs.

[wbond]

I think ignorance is almost exclusively why non-EU companies didn't use VoES. I never heard of it until this fall when I started hearing rumblings of VAT MOSS.

When starting a small business where you sell digital goods, one of the last things you are thinking about is researching tax laws for the 250 countries around the world (or trying to find an accountant versed in tax laws around the world). Instead, you worry about laws based on where you operate from.

I realize that the EU implemented VoES since it is easier to enforce tax collection on businesses than individual consumers, but it is pretty messed up from a conceptual standpoint. Making every business that could possibly ever sell a non-physical good from a website have to register in foreign countries, deal with making international wire transfers, generate invoices based on laws in 28 different countries, etc. The alternative being consumers pay the appropriate tax to the country they already pay taxes in…

[symfrog]

In many countries consumers are already supposed to pay over the VAT component on foreign purchases. It turns out, that almost no consumers ever did that, and now the collection liability is being shifted to companies instead.

[Taxamo]

Hey, JP here from Taxamo. A few points. These new EU rules are effectively seen as the template for the taxation of the digital economy. The OECD has stated that a simplified online registration scheme (such as MOSS), is "the only viable option for applying taxes to e-commerce sales by non-resident traders to private consumers (so-called B2C)." Tax authorities around the globe are looking at how these new rules work out as numerous countries (e.g. Japan, South Africa, Australia, Canada) are either planning to introduce similar rules, or have already revealed plans. The VAT is now due in the country where the digital service is supplied. It is that country's tax, the companies are vehicles for the collection of this tax from their end users. But there's so much more to these new rules than evidence collection or invoicing. That's why we have created a solution that covers all elements of the new rules. Take a look for yourself: http://www.taxamo.com/how-it-works/

[symfrog]

Taxamo seems to be purely focussed on EU compliance. Do you know of any other countries that have already or are about to put in place similar sales tax regulations? Would Taxamo add timely support for new countries and regions or will the focus remain only EU?

Also if you limit sales to businesses (and verify their business status) in the EU region and therefore have no VAT on your invoices do you still have to file a zero value VAT submission via MOSS?