Sales Tax or VAT on Membership
 

Hi, I have been running a adult website from Europe and I use ccbill EU. What are your plans when the new EU laws starts from 2015 where you are responsible for being registered and paying VAT to every country you get a member from in EU?

I recently moved to the States and I am considering starting up a new company in Delaware or Nevada, and run the website from here.

How are you dealing with this, and is the US a good place to run a adult membership website from?

ccbill is responsible for that since they are those who collect the money

Read this: http://www.forbes.com/sites/janetnov...-and-services/

unfortunately CCBill has never been any help with this

with Paysite Cash I receive a weekly statement with all single purchases and whether VAT applies or not

Even american companies will have to pay this, so going to the US won´t make a difference, just ask AFF.....

Do you have some more information about this law, source for it, etc? There is now that kind of oblication too, but only if the amonts exceed minimum sum defined by country to country (usually about 35 000 euros).

If you have purely American company that doesn't actively advertise to Europe, etc., why it would apply?

Thats the new law, any money made in the us forces the company to pay sales tax over it. This will definitely make some changes since lots of US companies never filed anything in Europe, now with the new law they´ll become targets.

Imagine Germany, they´re "missing" out on a lot of VAT revenues and I´m sure they´d love the extra money.

According to the Forbes article:

OK, but this doesn't sound like new law (2003). What about the other "new" law?

And how do you pay these VATS? I have looked for some countrie's tax websites and those are not even in English. I found that UK has this done best, online forms and such, but otherwise I found it impossible to do without some representative in particular countries. And there are 28 EU countries.

Looks like the new law will be more strict?

Welcome to EU bureaucracy :D And believe me it gets worse when you have to deal with new EU members - eastern countries.

Ukraine should enter in the EU :winkwink: :upsidedow

No, but really, how do you pay the VATs? I have paid VATs just to my home country.

They should make some one EU VAT/tax paying site/system, shouldn't be that hard these days.

In fact we need to divide EU and non EU sales by hand from the different stats of the different billers we use, and this cost lots of hours and accountant to us. Then we pay this VAT. Some billers (especially EU ones) already report separately the VAT sales, this saves us a lot of time.

PS: We pay all the VAT we should since day 1 which is lots of years ago. That's lots of money (like we earn 10% less than we would...), but, we got tax inspections (the netherlands company) and they made us compliments for how we accounted it so well. That's something!

How does this affect a camsite when the company is in the state but the servers outside the country?

Location of server or of company does not matter, location of customer matters, if customer is european union citizen, VAT tax should be added to price, and given back to european government so they use it to build hospitals and schools in europe.

You forgot to add to feed widows and orphans :1orglaugh

http://www.anorak.co.uk/wp-content/u...coni-india.jpg

Right now, purchases at websites in the USA for people from the EU cost 25% more because of the current exchange rate and with the VAT tax added, another 18%-25% on that. No matter, the devalued Euro makes this conversation hypothetical.

What changed is that before you could register to pay VAT in any given EU country and pay the VAT rate for that country for all your sales within the EU.

Since all countries have different rates this was "abused" because people would setup their company in whatever country had the lowest VAT rate for your product (the VAT can be different based on the product / service you are selling)

The law changed to stop that "abuse" so now everyone has to pay VAT based on the billing / shipping address of the customer.

I'm just thinking out loud here but this VAT issue is really a sour topic.

But doesn't this VAT include taxation on Electronic Services which is why many believe they may fall under the VAT requirement? You can define electronic services any which way you want and their is mostly "acceptable" definitions to the term. But what you will find when you go looking for the definition is that part of it will include verbage that Electronic Services must, in part, include mostly an automated type system.

You can argue that cam performers do NOT fall under anything automated as the success of the chat session relies entirely on human interaction and so should the sale. Human Interaction type sales are exempt from this VAT and therefore any purchase of tokens for the purpose of chat should be as well.

Now, of course the EU countries triple dipping for this VAT will say otherwise, but does it really matter? If they were ever to come after you for the VAT money they would have to convince a judge in your area to impose any penalties. Any lawyer could argue the basis for not paying VAT as it is entirely based upon the 100% need for human interaction.

Just my thinking.

"This definition contains two main components:

It is a service capable of delivery from a remote location that is actually supplied over the internet or other electronic network and that cannot be obtained without the use of information technology.
The supply of the service must essentially be automated (involve a minimum of human intervention)."

fuck all that.. launder bro, it's the porn way .CH, .PA, .CY etc.

I guess I will link to this page which may help explain why it is important that you are NOT an electronic service provider.

Distance selling EU VAT thresholds - Avalara VATLive

Because the big change is no threshold limit on electronic services:
"Note, there are no distance selling thresholds for electronic or digital services to consumers under the new 2015 MOSS VAT rules."

And if you consider your business to not fall under that category, you can assume that to stay compliant with VAT, you don't need to pay it if under the limit. And the limits are between 35,000 Euro and 100,000 Euro, per country. Most small businesses can stay under those limits.
Do a search of sales by country, per calender year. I'm fairly certain companies billing out 100K/month would be under those limits in most VAT countries. And even if they go over, the VAT only applies to the overage (if you even care to accommodate VAT in the first place).
That's my research on the subject.

A quote in that article:

"2. There are no de minimis exceptions to the VAT registration requirement for nonresident sellers.

The nonresident seller?s obligation to file VAT returns and pay VAT due arises with the very first Euro the nonresident seller earns on sales of its digital goods and services in the EU consumer market. There are no exceptions to these VAT obligations, no de minimis thresholds related to sales revenue or transaction volumes."

Is in direct contradiction of what this website article says:
Distance selling EU VAT thresholds - Avalara VATLive

"Note, there are no distance selling thresholds for electronic or digital services to consumers under the new 2015 MOSS VAT rules."

The above quote suggests there were threshold limits prior 2015. Then my entire argument about what is, and what isn't, considered "electronic service".

How can anyone take this serious if nobody knows what in the world the rules are? Sounds more like hush money... send what you can. But if you start sending, we will continue to molest you for the life of your business.

Enforcement stands a snowball's chance in Hell of success in the US courts.
The EU directives have no juristiction.

The EU VAT laws have jurisdiction only within the EU Community. Otherwise, Uganda could force EU companies to charge Ugandan VAT (or General Sales Tax, as the case may be) on digital sales from EU member state sellers to Ugandan citizens -- to think this international taxation scheme is wise is ludicrous.

The are 62 state tax jurisdictions in the USA alone and internationally hundreds more. They may all demand a piece of this action. Be careful of what you ask for you might just get it.

That's a red herring argument -- Labor is taxed under the EU VAT laws (in general).

If you combine my first 2 repliea it makes sense. It's not to avoid it, it is to qualify for threshold min. Which adds up to a lot of coin spread over 28 countries, and most small to mid size cam platforms won't need yo worry about it. And even if they did, it's only on the over.

It's ludicrous non the less, just rrying to use logic to a eu law that follows no logic. It's like the eu telling me I have to use the word whilst simply because they do.

Here is a Norway's definition of Electronic Services:

VOES Norway - Definition of the term ?electronic services?

Pay attention to this example. It is the closest example I can find relating specifically to cam sessions:

"Correspondingly, an educational service that is obtained via the internet in the form of a teacher providing tuition by means of video via the internet will be a service capable of delivery from a remote location that is delivered via the internet and that cannot be provided without the use of information technology. The service will nonetheless not be regarded as an ‘electronic service’ because it cannot be regarded as essentially automated."

''an educational service that is obtained via the internet in the form of a teacher providing tuition'' stop right there.

If you are a business selling to a consumer a digital service, a b2c sale, it is VAT taxable, if your business domicile is in the EU. There are some Article 98 exceptions granted by individual EU member states, but they are narrowly drafted to specific instances -- such as what you quoted -- educational tuition services. Camgirls teaching customers to fap better won't fly as ''educational tutoring.''

Threshold minimums apply to all VAT taxable sales. So, you don't need loopholes -- just annual sales under the minimum thresholds of each member state.

I didn't get that from the example, at all, to apply to "educational tuition". The very next statement said the basis for the decision which was (and should certainly be read):

"The service will nonetheless not be regarded as an ?electronic service? because it cannot be regarded as essentially automated."

By that reasoning cam sales fall under the same line of thinking, you cannot have a cam session without human interaction the entire time. And for the life of me I can not find where they talk about Human Interaction type sales not falling under electronic sales umbrella. I just was researching this today though and came across several links so it's somewhere in my history.

Listen, I'm with you, the EU is entirely stepping over their boundaries and I don't think they can do a damn thing to US citizens. I don't know what happened with AFF but I'm sure it is more complicated.

But Barry, not even you seem to understand this law. Because the big deal from this website...

Distance selling EU VAT thresholds - Avalara VATLive

Is that digital/electronic sales have NO minimum. I quoted it twice in this thread already. No minimum, pay for every sale starting in 2015.

For every lawyer out there that will defend this VAT there will be two more to tear it down... and an argument about if digital services meets the "definition" of what the merchant believes is digital/electronic is certainly up for debate.

Personally and IMO, I see very few US judges taking the EU VAT side over US business owners.

FYI, VAT threshhold for the Netherlands is an insanely low 1883 euro. o_O Just found this out when I got the joy to figure out invoices to businesses in other countries.

I understand how the tax office thinks and changes its decisions and promulgates new rules -- from personal experience. These new EU ''VAT Tax Harmonization Rules'' are just a continuation of the mentality. Just remember, if the Tax Authorities can get jurisdiction over you: a Court will have to accept your defense pleadings based on your concoction of the wording of the tax law, get a tax lawyer. Tax Courts will interpret the most narrow meaning and enforce their rules to the letter usually -- anywhere.

This also should serve as an example of the ''States Rights'' advocates here in the USA. These new EU ''VAT Tax Harmonization Rules'' are are a prime example of the states in a confederation's bickering and "I want mine!" mentality. The problem is that the EU member states rely heavily on the VAT Tax revenue for their touted free social services. Luxembourg had a 4% Digital Goods VAT Tax rate and in contrast with the VAT rate of your home state it was advantageous to move your business' domicile from France, Germany or other high VAT rate member states.

What the EU does on taxation within its own territory between member states is its juristiction. What EU persons pay in taxation to their respective member states is their own business. That is called sovereignty. The EU will find it is not sovereign with jurisdiction in the US courts the same as the US authorities have no sovereign juristiction in EU courts, see: JSTOR:Harvard Law Review (1923) this is basic international law and they know it. They are bluffing. I hope they try in the US courts just to get shut down and create some precedence. In contrast, US digital sellers are not required by state laws to collect sales tax if they have no nexus (physical facilities) in that state. https://www.law.cornell.edu/supct/html/91-0194.ZO.html there is no parallel code to plead and no basis in US law for cross border sale taxation (like VAT is) -- you are dead in the water.

US global corporations that have nexus in the EU they will have to comply. There is a new dispute in the EU developing that corporations may be required to pay income taxes proportionately to there profits earned in each member state at that member state's income tax rate. Example: a German automaker sells cars in Romania and Romania gets to tax the earnings. Absurd? Navigating Nexus

AAF has nexus in the EU is my understanding to answer your question.

The foregoing statements are my personal opinions and do not constitute Legal, Accountancy or Tax advice

Yes it is insane.

Move your domicile and nexus if the VAT tax makes your business unable to compete. A 100K ? threshold for us is exceeded in almost all EU countries so thresholds offer us no benefit.

You will be stuck between a rock and a hard place if you have to raise your prices to add the VAT taxes for each country's rates -- you will anger your customers and lose some sales to outside of EU competitors that do not collect VAT Tax.