Posts by bqworks

38 posts
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bqworks
says

@randomnoise, you raise a very important issue and I’ve posted on the topic of who is the actual seller/supplier a few pages back, but my post was ignored so far. I’ll post my message again:

I’ve seen it mentioned several times that this is a 2015 change in the EU law, which I don’t think is quite correct. The actual 2015 change in the EU law refers to the place of supply: whether the supplier’s location is considered to be the place of supply or the buyer’s location is considered to be the place of supply. Before 2015, the supplier’s place was considered to be the place of supply, so VAT had to be charged at the rate of the country where the supplier is registered, but, as of 2015, the buyer’s place is considered to be the place of supply, so VAT has to be charged at the rate of the country where the buyer resides.

Who is considered to be the actual supplier is not changed by the new law, there are only some new clarifications. Article 28 from Directive 2006/112/EC of 28 November 2006 states this: “Where a taxable person acting in his own name but on behalf of another person takes part in a supply of services, he shall be deemed to have received and supplied those services himself.” So, from my understanding, even according to the old law, Envato is considered the supplier. In the new law, there are some additions that elaborate on Article 28 from the old law:

For the application of Article 28 of Directive 2006/112/EC, where electronically supplied services are supplied through a telecommunications network, an interface or a portal such as a marketplace for applications, a taxable person taking part in that supply shall be presumed to be acting in his own name but on behalf of the provider of those services unless that provider is explicitly indicated as the supplier by that taxable person and that is reflected in the contractual arrangements between the parties. In order to regard the provider of electronically supplied services as being explicitly indicated as the supplier of those services by the taxable person, the following conditions shall be met:

(a) the invoice issued or made available by each taxable person taking part in the supply of the electronically supplied services must identify such services and the supplier thereof;

(b) the bill or receipt issued or made available to the customer must identify the electronically supplied services and the supplier thereof.

For the purposes of this paragraph, a taxable person who, with regard to a supply of electronically supplied services, authorises the charge to the customer or the delivery of the services, or sets the general terms and conditions of the supply, shall not be permitted to explicitly indicate another person as the supplier of those services.

The text can be found here, in Article 1 > Article 9a.

The current invoices don’t follow the law, in my opinion, because they still indicate (in a very confusing way) that the author is the seller/supplier, which the law explicitly prohibits in the passage I posted above.

38 posts
  • Has sold $250,000+ on Envato Market
  • Elite Author: Sold more than $75,000 on Envato Market
  • Made it to the Authors' Hall of Fame
  • Sells items exclusively on Envato Market
+3 more
bqworks
says

I’ve seen it mentioned several times that this is a 2015 change in the EU law, which I don’t think is quite correct. The actual 2015 change in the EU law refers to the place of supply: whether the supplier’s location is considered to be the place of supply or the buyer’s location is considered to be the place of supply. Before 2015, the supplier’s place was considered to be the place of supply, so VAT had to be charged at the rate of the country where the supplier is registered, but, as of 2015, the buyer’s place is considered to be the place of supply, so VAT has to be charged at the rate of the country where the buyer resides.

Who is considered to be the actual supplier is not changed by the new law, there are only some new clarifications. Article 28 from Directive 2006/112/EC of 28 November 2006 states this: “Where a taxable person acting in his own name but on behalf of another person takes part in a supply of services, he shall be deemed to have received and supplied those services himself.” So, from my understanding, even according to the old law, Envato is considered the supplier. In the new law, there are some additions that elaborate on Article 28 from the old law:

For the application of Article 28 of Directive 2006/112/EC, where electronically supplied services are supplied through a telecommunications network, an interface or a portal such as a marketplace for applications, a taxable person taking part in that supply shall be presumed to be acting in his own name but on behalf of the provider of those services unless that provider is explicitly indicated as the supplier by that taxable person and that is reflected in the contractual arrangements between the parties. In order to regard the provider of electronically supplied services as being explicitly indicated as the supplier of those services by the taxable person, the following conditions shall be met:

(a) the invoice issued or made available by each taxable person taking part in the supply of the electronically supplied services must identify such services and the supplier thereof;

(b) the bill or receipt issued or made available to the customer must identify the electronically supplied services and the supplier thereof.

For the purposes of this paragraph, a taxable person who, with regard to a supply of electronically supplied services, authorises the charge to the customer or the delivery of the services, or sets the general terms and conditions of the supply, shall not be permitted to explicitly indicate another person as the supplier of those services.

The text can be found here, in Article 1 > Article 9a.

38 posts
  • Has sold $250,000+ on Envato Market
  • Elite Author: Sold more than $75,000 on Envato Market
  • Made it to the Authors' Hall of Fame
  • Sells items exclusively on Envato Market
+3 more
bqworks
says

The way it should be is described in this document (pages 22 to 44). The document is also available in italian. However, it seems that Envato’s invoices reflect a transaction flow that’s different from how EU sees things: for EU, we supply services to Envato and Envato supplies services to buyers, yet some of the invoices created by Envato suggest that we supply directly to buyers (based only on what’s written in the Author Terms). An interesting question would be whether we can do our accounting according to EU law while, at the same time, Envato does a different accounting, with different invoices. The whole situation is very strange.

38 posts
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  • Elite Author: Sold more than $75,000 on Envato Market
  • Made it to the Authors' Hall of Fame
  • Sells items exclusively on Envato Market
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bqworks
says

Great! Thanks a lot my friend! :)

No problem :)

38 posts
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bqworks
says

There is a german version of the same document here (pages 25 to 49 are the most relevant for our discussion). It’s a really helpful document because it contains examples and diagrams.

38 posts
  • Has sold $250,000+ on Envato Market
  • Elite Author: Sold more than $75,000 on Envato Market
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  • Sells items exclusively on Envato Market
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bqworks
says

I’m confused. I’ll ask the real cognoscenti Varoufakis and Berlusconi what they would do. :D

I highly recommend reading this document, pages 22 to 44.

38 posts
  • Has sold $250,000+ on Envato Market
  • Elite Author: Sold more than $75,000 on Envato Market
  • Made it to the Authors' Hall of Fame
  • Sells items exclusively on Envato Market
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bqworks
says

As we have contradicting opinions here, I’d say it is best to mention your country when making those statements. For example: a specialist in Country x said they are (not) legal in Country x.

I’m Romanian. I haven’t consulted a specialist yet, only read the law. Also, from what I’ve read, EU law applies in all EU member states and when there is a conflict between national laws and EU law or when the national law doesn’t implement the EU law, the EU law has supremacy.

38 posts
  • Has sold $250,000+ on Envato Market
  • Elite Author: Sold more than $75,000 on Envato Market
  • Made it to the Authors' Hall of Fame
  • Sells items exclusively on Envato Market
+3 more
bqworks
says

Yep! They’re all good! Consulted a specialist! :)

Is that irony or do you actually mean that the Envato invoices are fine? :)


No, these invoices by Envato are totally useless. We’re still invoicing Envato since they are the seller according to any EU country.. As Enabled, we’ve consulted a specialist.

That’s my opinion as well. The invoices are useless, not necessarily because they would lack some information, as I’ve seen other EU authors complaining about, but because they shouldn’t exist at all.

There is no such thing as “supplier for VAT purposes”, only supplier. The EU regulation determines who is considered to be the actual supplier, not only who has the obligation to handle VAT. Article 9a from the new law, states that ”...a taxable person who, with regard to a supply of electronically supplied services, authorises the charge to the customer or the delivery of the services, or sets the general terms and conditions of the supply, shall not be permitted to explicitly indicate another person as the supplier of those services.” The obligation of handling VAT only comes as a consequence of being the supplier. Since Envato is considered the supplier in this case, there shouldn’t be “author to buyer” invoices, only “Envato to buyer” and “author to Envato”.

I’m curious what advice received the EU authors who plan to use the Envato invoices in their accounting. Any law references would be helpful.

38 posts
  • Has sold $250,000+ on Envato Market
  • Elite Author: Sold more than $75,000 on Envato Market
  • Made it to the Authors' Hall of Fame
  • Sells items exclusively on Envato Market
+3 more
bqworks
says

Question for EU authors: are you using the invoices provided by Envato in your accounting or do you still account only for the withdrawn amount? My understanding of the law is that EU sees Envato as the supplier (not only for VAT purposes—at least I don’t see any reference in the law for being a supplier only for VAT purposes), so Envato needs to invoice the buyer and authors need to invoice Envato, yet we have these invoices that seem to contradict how EU sees things. Has anyone talked to the local tax office about this?

38 posts
  • Has sold $250,000+ on Envato Market
  • Elite Author: Sold more than $75,000 on Envato Market
  • Made it to the Authors' Hall of Fame
  • Sells items exclusively on Envato Market
+3 more
bqworks
says

+1 for Developer license.

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