New EU VAT Rules Regarding Our Digital Products

What are the new EU regulations?

On the 1st of January 2015 the European Union implemented a rule change around the EU VAT place of supply of services, affecting the sale of digital goods and services from a business to a consumer.

Where digital services are supplied on a business to consumer basis, the supplier is responsible for accounting for VAT on the supply to the tax authority, at the VAT rate applicable, in the consumer’s EU member state.

What does this mean for us?

Until now European businesses selling to digital goods and services to European consumers have charged VAT based on where their business is located. Now the VAT must be charged based on where the consumer of the service/goods is located.

As a supplier of digital goods we now have to add on VAT to purchases of these products by law. This applies to all of our video and audio tutorial products. The amount of VAT added depends on the country you, the buyer, reside in. 

We have recently migrated all our digital products to a new service and payment provider Gumroad. They are responsible for collecting the VAT on purchases of our digital goods.

Example of added VAT at the checkout

How does this affect you?

If you live in a country that charges VAT on purchases you will now see VAT automatically for your purchase added at the checkout. The amount of VAT added depends on your countries tax rate.

For example a buyer located in the United Kingdom will have VAT added to their order at a rate of 20% (see image).

If you live in a country that does not charge VAT on purchases, for example the United States, you should see no additional charges added to your order.

The total price, including any applicable amount of VAT added, will always be shown at the final stage of the checkout process (see image). We are simply unable to show it earlier due to the fact that we do not know which country you reside in and so what rate of VAT to add until you reach the final checkout stage.

More information can be found on the following links:
European Commission /  EUVATACTION / UK Government