I’m sure we don’t need to explain the problems and impact VAT MOSS will have on authors around the world. A lot of very smart people have already written about this but the main change is that VAT will be due in the country that the purchaser is located rather than seller. This is to stop companies like Amazon, Google, Apple etc from enjoying a low VAT rate as they base their digital content services in Luxembourg, tax loophole closed.
After considering the problems faced by authors and a lot of other small businesses we couldn’t just stand there and expect authors to handle this mess themselves. So we decided to change our business model altogether to handle VAT on behalf of our authors.
As of the 1st of January 2015 Payhip will become a true distributor of ebooks and other digital items. Our terms and conditions will change to state that Payhip will buy a license from you as an author to give us permission to resell your books for you at your chosen price. No exclusivity and you can cancel this license at any time by just removing your ebook from Payhip.
This allows us to take on the legal burden of handling VAT and reporting it to HMRC (UK). You don’t have to do anything apart from choosing whether you want to include or exclude VAT in your ebook price when we sell to European readers for you. This setting will be available from the 1st of January.
We will also be providing full reports on all your transactions and those transactions that included VAT. These reports will also be useful for those authors that need to report their income to their respective government departments (not VAT). The first report will be available at the end of January and every month thereafter.
Well, that’s that then! Forget about the VAT MESS and enjoy your holidays! :-)