Not a great way to start the New Year…

On January 1, 2015 a European Union (EU) Vat (Value Added Tax) change that affects every seller of digital goods worldwide will come into effect. If you don’t know about the change in the Vat law, please read Jean Power’s blog for more clarification: http://www.jeanpower.com/blog/2014/11/21/

Although Etsy should be considered a third-party marketplace, their present policy regarding the new law is that the burden of collecting and reporting the Vat for the twenty-eight countries comprising the EU lies on the seller. Etsy does not have implementation in place to make this an easy task. To make matters worse, on January 1, 2016, the EU will be including all physical goods under this law. Because micro-businesses haven’t the ability to deal with all the red tape involved in the tax law change, many will be forced out of business. Some have already closed their shops. Others will lose sales because they will be forced to exclude buyers from countries that impose these rules. This is truly a sad state of affairs for artists wishing to sell digital tutorials, ebooks, and software as well as for buyers wishing to purchase them.

Due to the implementation of the European Union (EU) Vat changes regarding the transmission of digital services, rather than offering digital downloads, I will be offering only hard copies of my tutorials as of January 1, 2015 in my Etsy shop to EU countries: Austria, Belgium, Bulgaria, Croatia, Republic of Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden and the UK. This is an inconvenience to both seller and buyer as it will require the printing and shipping of hardcopy tutorials at additional expense. The shipping rates to some countries is exorbitant. Sales will drop resulting in lost revenue to the seller. The EU buyer will no longer be able to view the tutorial on their computer or tablet. Both seller and buyer will be negatively affected by this legislation. Thankfully, Digital tutorials will still be available within the United States, but because Etsy does not have a tool set up to limit immediate digital downloads to a particular country, I will have to manually upload each digital tutorial purchased via email, which entails extra time and expense for me as uploading will eat into my data plan and the buyer will have to wait longer to receive their tutorial because downloading will no longer be “instant”. We can only hope that the Vat law will be reversed or amended in favor of the small entrepreneur after it has proven to be a catastrophic hassle for everyone worldwide!

~ by BarbaraBriggsDesigns on December 29, 2014.

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