Andy Pink

Why do Cycling 74, an American company, charge VAT?

v-a-t

I hope you guys in Cycling '74 are paying your Corporation Tax in full. If not we'll unleash Margaret Hodge. It won't be pretty.

As from today if you live in the EU all fully digital sales now attract VAT. This means artists making a pittance from say Bandcamp will have to fill out quarterly VAT returns or incur the wrath of the tax collecting bureaucrats. It is fucking nuts.

As from today if you live in the EU all fully digital sales now attract VAT. This means artists making a pittance from say Bandcamp will have to fill out quarterly VAT returns or incur the wrath of the tax collecting  bureaucrats. It is fucking nuts.


Even in the US, if you buy downloadable software from companies with a presence in your state, you'll get charged sales tax. I bought Quickbooks upgrade as a download from Amazon yesterday and got charged sales tax. Nothing new here. The only problem with VAT is it's way too high IMO.

Even in the US, if you buy downloadable software from companies with a presence in your state, you'll get charged sales tax. I bought Quickbooks upgrade as a download  from Amazon yesterday and got charged sales tax. Nothing new here. The only problem with VAT is it's way too high IMO.


@FOLDH: BandCamp has announced that they will handle VAT. Which is right and proper. Kagi has been handling European VAT for years.

According to EU directives and as implemented by national law in member states, VAT is a tax on the consumer and is due where the sale is made. Up to 2015 some companies were able to use a loophole in sales of digital goods that allowed them to charge lower VAT by claiming that the sale was made in an EU state with lower rates (or possibly completely outside the EU). That loophole is now closed, and sales are reckoned as being made in the country where the consumer is resident.

The paperwork for VAT is, indeed, daunting and an undue burden on small vendors. That's one of the 

 for having services like BandCamp and Kagi to handle the bureaucracy.

As far as VAT rates (@DHJ) go, it is true that European VAT rates are higher than American sales tax rates. OTOH, in many countries the rates are much lower than what they used to be before EU harmonization of the beast. As I recall, France used to have VAT at over 30%. OTOH, given that VAT (and sales tax) are, in essence, regressive taxes, I would argue that any non-null VAT rate is way too high. But as Ben Franklin reminded us, death and taxes, my friend.

The paperwork for VAT is, indeed, daunting and an undue burden on small vendors. That's one of the raisons d'être for having services like BandCamp and Kagi to handle the bureaucracy. 

As far as VAT rates (@DHJ) go, it is true that European VAT rates are higher than American sales tax rates. OTOH, in many countries the rates are much lower than what they used to be before EU harmonization of the beast. As I recall, France used to have VAT at over 30%. OTOH, given that VAT (and sales tax) are, in essence, regressive taxes, I would argue that any non-null VAT rate is way too high. But as Ben Franklin reminded us, death and taxes, my friend.


Thanks for the info Peter - good news indeed!

V.A.T. ??