Collis, what about this:
If you operate a digital platform through which third parties sell e-services you are liable to account for the VAT on those sales unless every one of the following conditions are met:
- the digital platform and everyone else involved in the supply must identify who the supplier is in their contractual arrangements
- the invoice, bill or sales receipt must identify that supplier and the service supplied
- the digital platform must not authorise the charge to the consumer
- the digital platform must not authorise the delivery
- the digital platform must not set the general terms and conditions of the sale
If you do not meet all of these conditions, you must treat the sales of third party e-services as if they were your own and declare the VAT due.
Correct me if I am wrong, but wouldn’t some authors (in the case that we were actually selling directly to the buyer) have to add sales tax to all purchases made by buyers coming from the same country/state as the author? Or somehow factor this percentage in?
You’re right but Envato “forgot” about that and Collis said they’ll adjust current invoices in near future. Very professional.
Cocomero saidI’m guessing that act is not adapted to reality in our cases.
Under EU law they are the reseller. There’s an EU-wide legislation which classify them as re-seller so in my and my accountant opinion changes don’t affect us especially when invoices issued by Envato are invalid. If Envato will issue valid invoices (for all EU countries, not just for a few like now) then there will be possibility to handle it as they want, however there’s another problem – e.g. in my country there’s nothing like “VAT agent” as Envato would like to be and I’d be forced to pay VAT by myself for every single sale.
There is a possibility to have “VAT Agent” however it has to be a company from the same country (Poland) and Author cannot be an active VAT payer.If Author is an active VAT payer then he has be responsible to manage VAT himself and cannot allow anyone to do VAT stuff on his behalf. (this is how I understand Art 18 ustawy o VAT).
Under EU law they are the reseller. There’s an EU-wide legislation which classify them as re-seller so in my and my accountant opinion changes don’t affect us especially when invoices issued by Envato are invalid.
If Envato will issue valid invoices (for all EU countries, not just for a few like now) then there will be possibility to handle it as they want, however there’s another problem – e.g. in my country there’s nothing like “VAT agent” as Envato would like to be and I’d be forced to pay VAT by myself for every single sale.
Kriesi saidHere’s EU-wide legislation (page 24 point 3.4.2): http://ec.europa.eu/taxation_customs/resources/documents/ taxation/vat/how_vat_works/telecom/explanatory_notes_2015_en.pdf
Ok, got a few questions, and I figured since the answers might be interesting for everyone here I ask in the forum instead of sending a mail to email@example.com:
1.) You tell us Envato Marketplaces are a platform and you are not the seller. Yet I have a legal document issued by the Austrian Federal Ministry of Finance that basically says you are the seller, based on the way you operate.
It unfortunately seems to be only available in german but its easy enough for me to offer a sufficient translation.
Under section 3a.13.1 it says that it is assumed that an appstore (or similar service) is not the seller if you only process the payments and do nothing else. Otherwise it is assumed that you are the ones getting the full revenue of a transaction and then pay others a commission. Since Envato offers a lot more than simply being a payment provider you would need to qualify for each of the following statements in order to not be the seller:
Last one is key here: Since Envato reviews all items I upload and also sets the price you dont qualify for the last item on the list. And because of that austria considers you the seller.
- All invoices to customers need to contain my name (check I suppose, with the new invoices)
- We got a contractual agreement that says you are not the seller (check, its now in your TOS)
- You neither authorize the service I offer, nor do you dictate the terms on which they are offered (not even close to check)
Here’s document issued by the Polish Ministry of Finance which refers to EU directive 1042/2013 linked above (page 2, point 1): http://www.mf.gov.pl/documents/766655/1402295/Broszura+MOSS+styczen+2015.pdf
If anyone of Polish authors want, you can show that to your accountant / tax advisor.
@Enabled I wouldn’t be so sure. My accountant said these invoices can’t be accepted in Hungary, because important info such as addresses and VAT info is missed. What should i do next? I believe my logic has nothing to do with EU laws. Another thing i completely don’t understand. Item price is $27, invoice is for $21.60, balance shows $18.90. Why my actual balance is DIFFERENT from the amount stated in invoice?
There’ll be next VAT rollout. Well, the question is when? Here’s Collis’ answer http://themeforest.net/forums/thread/envato-market-the-platform/159256?message_id=1203321&page=8#1203321
Enabled saidWhere did I say that I’m only searching Google and didn’t go to the specialist? I’m glad your accountant / tax advisor gave you answers to all the questions. Unfortunately I’ll be probably forced to write an application for tax law interpretation so all things like EU wide legislations linked here are helpful.
From my point of view. One thing is surely clear. STOP searching Google for these kinds of answers. It’s like buyers telling us how that they’re 16 year old kid can make a better product just by downloading some tutorials. Go to a specialist.
Cocomero saidEnabled, there where I live talking with accoutant isn’t enough because in some things IRS may thinks differently.
For crying out loud guys!
I agree. We need official interpretations to keep safe. Crying is waste of time.Enabled said
Again, Envato is a multi-million dollar business online in plain sight for everyone to see! They are not laundering your money, they are not doing anything that is illegal.
Things legal in Australia can be illegal in EU.
Because Envato is multi-million they are strong. They are far far away. They are not affraid. While Authors are small businesses. They are weak and in confrontation with local IRS they are lost.
This is why people here are so nervous.Enabled saidWhat country? Have you got his opinion on a paper?
Use your logic people. If Envato would do that and ONE author would sue them for a million dollars they would INSTANTLY win. Stop being experts in fields you’re not and go consult experts!
Sue for what? And how? Who has the money to sue company in another part of the world? Author who sold items for $10 000?Enabled said
this was NOT a rant, just my opinion. I talked to my specialist in the matter, things are absolutely fine and dandy!
(2) The invoices aren’t valid for VAT
You’re correct, and we have a second VAT rollout that is coming right after this one. Just for clarity though, the VAT collection/etc will be handled and remitted by Envato. We are working with the relevant EU member state authorities to make this happen. After the rollout the VAT charged will be added to existing prices, and in the meantime where applicable, it’s worn by Envato.
I’m so disappointed. It should be done before 01.01.2015.