AlexRag wrote: What impact will this have for buyers outside Europe, like North America?
Are the price increases you are referring to the VAT or are you considering increasing the base cost as well?
TL;DR: Yes, it impacts non-EU customers too.
In details:
As a general reply to the problematic:
- For the most numerous smallest e-service web-sites which sell with a single paypal button at a single price "VAT inclusive", they will have to adjust their prices worldwide to take into account for the cases where they have to pay for VAT (or they will have to swallow the VAT themselves if they don't increase the price).
- For small shops, they will also have added general and administration costs, not only VAT, and usually general costs are included in sales prices, so there too probably a small increase will be seen for non-EU sales (or if not, they will lower their margin too).
- Medium shops using third-party services (outside EU of course to avoid the VAT problematic with the third-party service) will have an added handling cost of around 10+% for all sales (+VAT in EU). So there too there is an impact.
From discussion reports at high EU levels it seems very clear that EU ignored completely the problematic of very small, small and medium-sized companies when designing #EUVAT in cooperation with Internet giants.
So to answer your question, we are currently seeing following scenarios happening:
- smallest shops without infrastructure and revenue/time to cover the setup-expenses and time will either stop selling to EU customers or if in EU where that would probably be illegal have to close temporarily on 1.1.2015 at least until EU Commission gets its acts together. Or change to delivery by post, or change their business model to include a manual process in their online delivery to workaround. This small cartoon shows the solutions for e.g. a small UK business:
Invalid consumer key/secret in configuration
- medium shops will either use a third-party "Reseller" service at 10+% upcost for everyone or have a 10-20% added cost internally with accounting/IT and so on.
- larger shops will probably register themselves to pay VAT with around 5-10% added cost internally.
- large corporations are those who will see the least %-cost, as they have the accounting and IT infrastructure already in place anyway, and 10k€-20k€ implementation cost + 1-2k€ quarterly costs will have a low impact on their cost structure.
Hope that answers your general question.
EDIT:
More details are in this 92-pages document from EU Commission:
ec.europa.eu/taxation_customs/resources/documents/taxation/vat/how_vat_works/telecom/explanatory_notes_2015_en.pdf
(which by its size shows how little the EU Commission understands about the available time for administrative burden in the smallest companies).
nant
