SHORT STORY: it looks like they are changing the regulations for items sold on-line (patterns in my case) and because of the enormous amount of work I would have to do to keep track of VAT for sales done in EU, it makes more sense for me to shut down my little online shop and stop selling my patterns on Craftsy (from 1/1/2015).
I came across this blog post by Beth @ evapaigequiltdesigns where she explains her experience about the changes in the VAT regulations in Europe and how that would affect her small business. She also mentions that she contacted Craftsy but didn't get much help or support (unlike Ravelry that found a way to manage the situation, see links below).
My situation is even simpler than Beth's.
- I have very few patterns for sale, and very few sales (but still I like the idea that I can buy few extra crafty goodies without affecting my finances).
- I don't have time (nor desire) to keep track where my patterns are sold.
I am supposed to collect 2 non-contradictory pieces of evidence to determine where the customer is located, and keep a record of that for ten years O_o o_O
I don't even know if that is possible from Craftsy... especially because I need 2 pieces of evidence so even if out get the address from Paypal, where do you get the second one? the IP? O_o
- I don't have time (nor desire) to register myself for VAT and to submit taxes money to other countries.
So since this new regulation seem to have no minimum threshold in terms of sales, only one single pattern sold to an EU customer would force me to do all these crazy things!! for few cents?? are we insane??
I guess that then the solution is to close my pattern shop!
I don't know if by the end of the year Craftsy will address the issue, and I hope it will (for the sake of many people that uses this as a way to have an additional income).
If you have any information about this issue and you want to share it with me, please add a comment below! I am going to be off-line for a while so the comment will not be automatically posted, but they will be stored safely in my inbox for when I come back!!
If you want to know more, these are few interesting links I found (again, not sure about the accuracy of the information, but they look reasonable).
If any information that you find here, I am sorry, I am not a tax expert!! Plus I don't have time to further investigate the situation, but it looks a pretty serious issue that will become reality very soon so I think it's better to share! :)
- Beth's post about her situation
- Similar issue for other e-services
- EU VAT rules (from Nov)
- Impact of these regulations on small businesses (Etsy is also mentioned there!!)
- Ravelry and Loveknitting solution for the selling pattern issue!
ETA: I contacted Craftsy and this is part of their response " Our team is activity discussing how these new laws affect Craftsy and thus you. We'll be meeting next week to discuss how this will affect us going forward and what actions we can take". That's the exactly same response I saw on other blogs and I doubt that they will meet for Xmas to discuss this ;) but maybe they will... let's wait and see.