Is there any update on how past VAT issues will be handled? (By ‘past’ I mean transactions before January 1st 2015).
I admit – I (like maybe most other EU authors) am still confused about the whole thing and it might well be that I misunderstand all of this completely – so please (please!) correct me if I’m wrong.
But here’s my question:
I’m an author from Germany and I’m VAT registered. That means (and always meant) I have to charge VAT for all my customers from Germany and for EU customers who don’t provide a valid VAT ID (I’m talking of custom jobs here, sending invoices directly).
Envato recently took the liberty to decide that authors always had been the direct seller of their digital goods on Envato Markets. We can go on arguing about this as much as we want (and my position on this question is clear – Envato always was and still is the seller and just declaring otherwise doesn’t change the facts) – but since Envato refuses to back down from their ‘decision’ this discussion doesn’t lead anywhere. Envato says it is so – we have to deal with it or stop selling here.
So – if I can’t prove to German tax authorities that Envato always was (and still is) the direct seller (because they refuse to admit this), authorities will ask me a legitimate question:
As a German author, selling ‘directly’ to German customers (and EU customers without VAT ID) I should have collected VAT on any past sale to those customers. Question: Where is this VAT? Who’s gonna pay?
What I’m afraid of is this: They might force ME to retroactively pay this VAT for past sales, simply by assuming that VAT was included in the item price of past sales.
Obviously for past sales I can’t even tell which ones went to German buyers (or EU buyers without VAT ID). So this might make things even more confusing when dealing with German authorities.
However – I refuse to accept that I’m responsible for this past VAT at all. I acted (for good reasons) under the assumption that Envato is the seller. I had no way of knowing who my buyers were and no possibility to charge VAT.
I know – Envato has said before that they’re ‘working on resolving past VAT issues’.
But I’m still waiting for ANY precise answer to this question.
So – what’s the situation regarding past VAT? Will we get any proper document, signed by Envato, that clearly states that Envato takes ALL responsibility for past VAT?
Don’t get me wrong: I’m glad that Envato handles VAT from now on. But as long as I don’t know how exactly past VAT issues will be handled, I won’t find any reason to feel eased about this.
Or maybe there isn’t any issue at all and I’m just confused? Please Envato – enlighten me.
You’re right, they don’t have to be like 1, 2, 3, 4, etc.But if my business uses invoice numbers like <year><invoice> like 20150001, 20150002 and so on, I can’t have invoices like ABC12345 (as shown in the screenshots from the announcement blog post) in between.
I don’t think that’s true as well.http://www.gruenderlexikon.de/magazin/welcher-nummernkreis-fur-die-rechnungsnummer-ist-zulassig
Invoice numbers have to be unique – that’s it. You can be as creative as you want with your invoice numbers – just make sure they don’t repeat.
Please don’t get me wrong – I’m not defending Envato here for the galactic mess they’re creating. Just want to clear this particular aspect up.
My own biggest concern regarding the new invoicing system is the fact that we as authors don’t get ANY written statement about what happened to the VAT (for those invoices that shoud have VAT on them).
If there’s an invoice in my name that by law should have the VAT amount and percentage on it – and this is nowhere to be found – I’m simply wondering how on earth I could exlplain this to my (german) tax authorities.
Just say “Envato takes care of this…”? Really? That’s ridiculous. They’ll think I’m from outer space.
In addition to all those invoices we need documents that clearly state what happened to VAT.
Those invoices are not legal here in Germany. They miss the adress of both parties, as well as tax-ids.
It true that here in Germany legal invoices have to include a full address of both parties and, as far as I know, at least the sellers TAX-ID (and VAT-ID, if available).
Even further, all invoices that I, as an individual or as a company, issue need to have a “Fortlaufende Rechnungsnummer” (they need to be numbered consecutively) in order to be legal.That means I cannot use the invoices you provide in my name for my own book keeping, since the numbers don’t line up with the numbers of my “outsite-of-Envato” invoices. In fact, I would have to write an own invoice for every single item I sold by hand. But, due to the lack of full qualified addresses etc. I can’t even do that.
As far as i know – your statement about consecutively numbered invoices in Germany is not true. Invoice number have to be unique – but not consecutively numbered.http://www.akademie.de/wissen/fortlaufende-rechnungsnummer
Eric, Thanks for the response. One problem you are going to have with your licensing is that when people license music based on audience size they ALWAYS think in terms of DMA or audience reach. I sold television advertising for years and it is ALWAYS sold on audience reach not audience cum. 99.9% of advertising producers will look at the total number and assume it is the market DMA or audience reach not the cumulative audience views because buying based on estimated cum is not a common concept. I think you will have many advertisers buying the $18 license because they honestly believe they are purchasing the correct license based on how the industry works. (By the way one of my best friends produces one of the #1 radio shows in the us and ALL of their add sales are based on audience reach/DMA).
Well put. That’s what I thought, too…
At least try to address this point and make it absolutely clear to the buyer, what is meant by “audience size”.
Still – I don’t see why you don’t just get rid of the broadcast use for the first tier altogether. This would be a simple solution to an obvious problem.
Who could those buyers be that would be left out if you remove the broadcast use from the 18$ license?
Please, don’t launch with broadcasting in the first tier.
Didn’t realize the effects of including broadcast licenses in the first tier until now.
That’s a HUGE disappointment and obviously the opposite of what authors were hoping for.
Thanks to Tim for analysing the issue so thoroughly and eloquently.
There’s an important difference between… a) actual audience size / b) intended audience size / c) potential audience size
+1While this is OUTSTANDING news, I also question this portion. What would stop the average customer from simply choosing the basic $18 license by stating that he or she doesn’t “intend” to have a million+ audience? What’s the course of action when said video gets several million views?
In the downloadable FAQ pdf it says the following.
Q: What happens if I need to exceed the limitations of my license in the future? Can I upgrade my license to a higher tier?
A: Yes. You will be able to contact support for assistance with upgrading your existing license.
Just to clarify: I was never talking about Youtube… The terms regarding Youtube views in the Standard Muisic License are crystal-clear:
Apart from the limitations in clause 4, there are no restrictions on views or impressions of an End Product containing the Item. For example, there can be unlimited Internet views or page impressions of an End Product.
Example: your home video uploaded to a user-generated video-sharing platform goes viral and gets over 1,000,000 views. Relax and enjoy the fame, you’re still covered by this license.
In my post I was referring to broadcast / TV usage.
This really is great news…!
However – I think you should be more specific regarding the term ‘audience size’.
In the license PDFs you already specify by using the term ‘intended total audience size’. That’s a lot better!
I’d even go further and use the term ‘potential total audience size’. And I think it would be important to use these specific terms in all short overview texts for any license.
What I mean is simply this:
There’s an important difference between…
a) actual audience size / b) intended audience size / c) potential audience size
I think you should avoid any confusion for the buyer here… When a buyer selects a license for braodcast use he/she should be aware that it’s the potential audience of the tv station that counts here.
Awesome track, Sascha! Hope this feature gives it the boost it deserves!
Check this thread:http://audiojungle.net/forums/thread/top-new-authors/44886