Updated: New Tax Rules Affect Those Selling Digital Media in the EU (But Not Bandcamp Users)

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Updated 12/30/14 1:30 PM PST: Within the past hour, Bandcamp has changed their policy. Bandcamp will now handle all VAT payments and reporting, and the additional steps that they said users would need to take are no longer needed.

A change in European Union tax regulation will affect everyone that sells digital products online to customers in the EU.

As of January 1st 2015, VAT (value-added tax) will be based on the country of the buyer, not of the seller. The change was meant to address tech companies that base their operations in countries with low VAT rates, like Luxembourg .

However, this will affect everyone that sells music, films, games, e-books, and other digital items to customers in the region directly online.

Previously, there were exemption rates for those that don’t sell massive amounts of product. These exemption rates will no longer apply when the buyer and seller are in different EU countries.

This change will also affect musicians who sell their work on Bandcamp, as money goes directly from the buyer to the seller. The VAT will be automatically added on by Bandcamp.

Bandcamp is updating their policies to make the change as easy as possible for sellers. In March 2015 Bandcamp will provide downloadable VAT reports, but there arestill other hoops to go through.

Sellers will have to sign up for MOSS (Mini One Stop Shop) to report and pay the VAT. Sellers have to turn in the report and pay the taxes every quarter. Bandcamp users will be able to download a report, but those selling their music directly will have a lot more work to do.

Bandcamp plans to eventually route money for digital sales through their platform, which would allow them to handle VAT payments for sellers.


Nina Ulloa covers breaking news, tech, and more. Follow her on Twitter: @nine_u

Image by PT Money, licensed under Creative Commons Attribution 2.0 Generic (CC BY 2.0).

19 Responses

  1. john

    communist scum making the world shittier for people with any initiative every second.

      • another misleading headline

        “Updated: New Tax Rules Affect Those Selling Digital Media in the EU (But Not Bandcamp Users)”

        Nina, your headline says that bandcamp users are not affected by the new tax rules. i.e. that bandcamp users have been granted an exemption from this new tax.

        Is that what you meant it to say? Or just an ‘accident’ to drive more attention to your current crush, bandcamp?

        • Nina Ulloa

          Bandcamp users have absolutely 0 changes to make when it comes to this. As I stated, Bandcamp will charge the tax when applicable and will handle all reporting and payments.

          • Holy crap

            This IS news!

            I can’t believe that bandcamp is actually PAYING the VAT tax for their artists. For everyone that has been holding out, NOW is the time to join Bandcamp. Nina says that this new tax scheme will NOT be applied to bands who use bandcamp! For example, if you use bandcamp, you WON’T be TAXED at all!

            Hooray Bandcamp!!!!! Not sure how you pulled this off, but the headline is right “New Tax Rules Affect Those Selling Digital Media in the EU (But Not Bandcamp Users)”!

            Thanks so much, Nina for pointing this out. I was not sure of this at first, but I am telling every band I know that bandcamp is picking up the tab on taxes for the EU. Huge props to them! I am a convert. I will be contacting bandcamp customer service asap to make sure I don’t pay any EU taxes, and that they pay them for us.

            Special thanks to Paul Resnikoff for running this blog. Its now saving me thousands!


  2. Anonymous

    getting to the point of not even being worth distributing music anymore…

    just make it and enjoy the process and the mastery of many crafts, but the business of music is just a waste of time and energy…

    shame really…

  3. john

    nina, you may want to reread their faq section, see this recent update:

    Does Bandcamp handle European Union VAT (Value Added Tax) for digital goods?
    If you’ve seen the recent news of changes to EU tax law, you may be wondering how this affects you as an artist or label selling on Bandcamp. The good news is that for digital sales, there is no need for you to register for VAT, submit quarterly reports, and so on. We will take care of all of that for you.

    If you happened to see our earlier help item about this, we planned to roll out a temporary solution where artists submitted the tax themselves. We’ve decided to accelerate the changes to our system such that the interim step is unnecessary.

  4. Anonymous

    So if I’m in a little indie band in Vermont, and we set up our own website and sell even a single download to someone in Italy, for example – the Euro-weenies imagine we’re going to register a VAT account with them, file a quarterly sales tax return to a foreign government, and collect and store personal information about this fan for a freakin’ decade just in case they want to fly over here to my mom’s house and audit us?!?!?! For a single two-dollar download? And for a decade? Who knows where the heck we’ll all be in a decade. When the band splits up ’cause someone’s gettin’ married – who gets the honor of keeping this crap in their garage for another 7 years just in case some foreign pencil-neck in Brussels wants to see it?

    Do these people really think they’re Gods of the earth or what? Like it’s not already hard enough to sell even a single two-buck dowload – you wanna turn every musician on the planet into freakin european tax accountants? Cause just wait – next it’ll be the Chinese VAT, then the South American VAT, then…….and for every song you post for download on your site, there’ll be two weeks of paperwork for FOREIGN governments. I got enough paperwork to do for my OWN government, thank you very much – now FOREIGN governments imagine they can require me to do more paperwork for them??? And the tax collected won’t even be spent on making society better in the USA – they seem to imagine I’m gonna get an accounting degree for THEIR benefit and turn us all into tax collectors for Europe.

    Or – we’re left with no choice but to sell through a big corporate online retailer with the resources to handle this stuff – and big corporate business gets the monopoly on doing business on the web. Great – European taxation kills the very kind of indie micro-business the web was supposed to enable. Good work, socialist scum-buckets.

    Hey, Euro-commies – tax your OWN citizens all you want.

    But are American musicians really going to stand for this blatant attack on American sovereignty and independent business?

      • Anonymous

        You make it sound like specifically American companies did something underhanded. Ireland was awash in decentralized European and Asian “head offices” until the crash. And all they did was act rationally – and legally – within the framework offered by the Europeans. “If you locate here, you pay X% VAT, or pay Y% over here.” Surprise – ordinarily intelligent CFO’s didn’t choose to locate in higher tax states. It just so happens that a few American digital companies were the biggest, and make good targets.

        They could have just applied this new rule to businesses located in the EU. But I’m sure they reasoned that ordinarily intelligent CFO’s would quickly figure out they just have to move out of the EU – and they really want to collect tax on digital downloads. So – to ensure Europe gets to tax Amazon and iTunes to pay for Europe’s socialist regimes, every little band on the planet must be burdened with European taxation and paperwork.

        • Nina Ulloa

          I don’t disagree. The comment I was replying to made it sound like American companies had nothing to do with the cause, when they had everything to do with it.

    • b

      Actually, if you are based outside EU (like you are in USA) and sell your music through your website to EU customers…absolutely nothing changes for you. You were supposed to charge VAT since 2003. The fact that you and probably almost anybody else did that is another matter. Point being this is nothing for non EU based sellers.

  5. Manion

    This is just so bloody confusing. I need a simpler description like the one on https://www.vpnranks.com/. For starters, why are there different rates for people living in different regions. If the EU comes up with new tax regulations they should be unanimously applied. This wasn’t my government’s independent decision. Furthermore, this will end the anonymity I desire when I’m online. I don’t want e merchandisers knowing I’m purchasing from China or from the east end. If i remain anonymous I’m now breaking the law. If i’m not, then I’m openly inviting you to invade my privacy. This will be the death of online purchases.

    • Paul Resnikoff

      For starters, why are there different rates for people living in different regions. If the EU comes up with new tax regulations they should be unanimously applied.

      That was my impression as well. After all, isn’t the underlying charter of the EU a more uniform set of principles, taxes, and rules for exchange?

  6. The maravers

    Dont understand what’s the problem. Except, ok, things are going tough for small artists.
    This is ONLY for people selling their music from EU. I’m selling music so now I have to add a “VAT line” in my report. That’s it.
    I don’t want e merchandisers knowing I’m purchasing from China or from the east end.
    Wow… You need to check a little about IP’s&standards about the internet surfing. Except using a VPN, or some specific tools (like TOR, etc.) all time : you are exposed.

    Now back to the topic.
    My 2cents : most of the time companies are adding new charge directly to customers, most of music sellers will simply do the same and this affect the business in a serious way.
    I won’t.
    I’m ok to earn a litlle less since I’m not in the business for money.
    May be I would reat differently if I was a serious seller, can’t tell.

  7. Inigo

    I just test it on Bootcamp: I’m from France and when I bought, say, a 9€ digital album, I have to pay an extra 1-2€ tax.
    Ok now the problem is that if I use a VPN extension (I suggest “Hola” for Chrome) I can buy the very same album but trick the website into thinking I’m “from the USA” and pay NO TAX.