Gumroad Solve The EU VAT problem

As of January 1st I was hit with a problem, a new rule came into play concerning selling downloadable digital content to other countries in the EU (things like ebooks, music and training materials). As I do sell some training materials (3D lessons and useful files) it affected me. I was forced into halting all sales of my content in EU countries (excluding the UK).

From my understanding the rule, the implications for me meant that any product I sold to an EU based country I would then have to pay VAT at the rate of the country the sale came from. It was brought in to stop the likes of Amazon claiming their base as Luxembourg and subsequently paying a hell of a lot less tax then they really should be. What Amazon (and other similarly sized companies) were doing was legal, but it was pretty wrong.

Unfortunately for me and many others, this left a lot of small businesses struggling to know what to do and quite how to go about dealing with things. I myself left it very late in the day to take any action, partly through lack of understanding but also it wasn’t particularly communicated very well. Certainly not to me anyway, had it not been for Twitter, I doubt that I would have ever even known.

This morning I woke up to some great news from Gumroad, the provider I use to sell and distribute my content. Gumroad are now collecting VAT as required and remitting it to the EU. The beauty of this is that I don’t have to do anything. Nothing to register for and no forms to fill in, and perhaps even more importantly, *Gumroad are absorbing the costs.

Problem solved!*

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