Monday, December 29, 2014

The VAT and you, what American Etsy sellers need to know

Did you know that starting January 1st all sellers of digital goods who sell to European countries will be required to pay a VAT tax to that country?  Did you know that as of January 1 2016 any US sellers of physical goods will also be required to pay a VAT tax to that country?  What's worse is there is no minimum.  If I sell one crochet pattern all year for 4.50 cents I have to apply for a VAT tax ID number and pay 1.50 or whatever that tax rate is in that country to that country in order to stay legal.  Now as a freedom loving American this doesn't sit right with me.  Why should I be required to pay a tax to another country's government that has absolutely NOTHING to do with my intellectual property.  It's not owning the site that I sell on.  It's not in charge of the site where I get paid from.  It's simply the country that my buyer happens to live in.  What???

So as of January 1st my patterns will no longer be available to buyers in other countries.  I feel bad for the people who live in these other countries as I am sure they still want my product, most of my buyers of patterns are from other countries, however I am out that income.  I don't even make enough to be charged taxes in my own country I refuse to pay taxes to other governments in order to sell my products.  And as if Etsy couldn't possibly make this harder on its sellers. .

It is up to the SELLER to prove where these buyers are coming from.  When you sell digital items on Etsy, it doesn't tell you where these buyers come from.  If you only sell one item a day you can figure it out by the map but what about sellers that all they sell is digital items?  How are they supposed to know what product went to what country?  Also since there's no way to add the tax onto the purchase as of right now the taxes are coming OUT OF YOUR EARNINGS.  So you can either raise the price on all of your items because the average VAT tax for the country of randomness is about 25% or you can just loose money.  Some VATS are as high as one third of your price.  Also from what I am looking at online the VAT seems to change every year so  .. . your never going to get a current real time cost of VAT you can guess and try and make up for the revenue loss but yeah this is just bad.

One step closer to a world currency and a world government.  Not to sound like a crazy person but this is just another sign of the end times.  This is the part that bothers me  most.  Why did our government allow this to happen?  Why did Etsy not even tell us about this?  Had I not been on an amazing team that told me about this I still would be in the dark.  Please share and reshare this with anyone you know who sells digital items (prints, patterns, ebooks) on Etsy or any other global platform.  Please don't shoot the messenger. . ..