There is, thank goodness, talk about a threshold or maybe even an exemption for small businesses regarding the VATMOSS registration, as hinted at in a recent PR paper from the European Union.
It says there are plans for
Introducing a common EU-wide simplification measure - VAT threshold - to help small start-up e-commerce businesses.
However, right above that it also says
Extending the current single electronic registration and payment mechanism to cross-border online sales of physical goods.People. Please. There's been issue after issue after issue with the Digital VAT rules, and lots and lots of small businesses are suffering. I have stopped selling my pdf knitting pattern and have scrapped plans to offer more pdf instructions or patterns in the future - even though there are lots of customers who would prefer a pdf pattern and will not buy the physical version, and offering printed patterns (if you want to do that in an appropriately high quality) means a significant expense, and a need for storage space, and more logistics in getting it to the customer.
There are a few points in that memo that make me scared silly for my future as a small business entrepreneur. This one, for example:
I get a twitch when I read "level playing field". Oh you people making up these plans, please be aware that the level you will most easily achieve is that where all the small businesses give up.
How will the Commission make e-commerce easier?The Commission will put forward clear contractual rules for online sales of both physical goods like shoes or furniture and digital content, like e-books or apps. It will fill in the existing legislative gap at EU level regarding digital content and will harmonise a key set of rules for physical goods. This will create a level-playing field for businesses, allow them to take full advantage of the Digital Single Market and sell with confidence across borders. At the same time, it will boost consumer trust in online purchases. Consumers will have even more solid and effective rights. For example, if the e-book you just bought is defective, it will be easier for you to obtain a remedy against the trader. Europeans will be able to shop in other EU countries as easily as in their home countries and get the best products at the best price.
I can tell you, from my own experience of having a small business based in Germany that there are already so many rules and regulations to follow, I'm glad if I manage to keep up with all the changes. And I'm one of the people trying hard to do so! I know a good number of colleagues in similar small businesses who do not know about many of the rules, and just ignore them, or have heard about them and still ignore them, hoping for the best. Because trying to conform to them would break their backs with bureaucracy, or would mean hiring help that would cost so much that all their profit goes into conforming with rules. Many of these rules are just stupid, too. Case in point? A while ago, it became obligatory to exchange the text on your "buy now" button in the online shop from "kaufen" (buy) or something similar to things like "zahlungspflichtig bestellen" (order with an obligation to pay). If you don't do that, technically your customer can renege the contract because it is not considered valid. Or some law sharks can serve notice and fine you because you do not conform to law.
When I learned about contracts for buying and selling in school, I got taught that the agreement between two parties is sufficient. How is "buy now" less of an agreement than "order with the obligation to pay"? (I'm waiting for the day when something similar will be required for buying a bread roll from your baker, or a sausage from your butcher. How about a little ritualistic dance after ordering, before paying, such as twirling around your own axis three times, then stomping your right foot thrice while declaring in a sing-song voice "Yes, I spend my money now, yes I buy I buy I buy, here you go, I do declare!" I think that would match the ridiculousness nicely.)
For textile stuff, there are things like a special law on how to mark your skeins of yarn that you sell. Which means, as my dyeing friend tells me, that sometimes you are not allowed to give your customer all the information they might want to have because you may only declare things in this or that way, and if you want to tell them the additional info that might be crucial to them, you have to hide it in the name of the yarn, or tell them (knowing that anything just told, not written on the band, will be forgotten soon).
Then there's so many grey areas, and things where someone tells you one thing and the next guy (professional, mind you!) tells you another one. A few years ago I actually shelled out money for counseling by a lawyer, who instructed me in how I could file the allowance money for any days spent travelling due to job reasons. (There are quite a few days per year for me.) I did that - and received my tax statement back with the allowances cancelled and the explanation that this was not an available option for me. So who was right? The lawyer, specialising in that field? Or the state official who was filing my taxes? And would it have been worth it to contact the lawyer again, and the tax official, to find out who was really right, spending more time (and possibly money) on the issue? (I didn't. I just accepted that and stopped filing allowances.)
And that's just three tiny bits of the current situation, from personal experience or immediate contacts. Don't even get me started on the vaguenesses that you will encounter in book-keeping. (Is it "Werbekosten" or "sonstige Ausgaben"? Is it "computer hardware" or "office supplies"?)
So. Will these "clear contractual rules" REPLACE all the rules that we have now? Is that even possible, for so many countries, so many different structures? Or will I have to keep up with an additional set of rules, themselves as complicated as the domestic rules? There is a point where keeping up with all that stuff is nigh impossible for a single person. This point has already been reached for Germany - if anything more is added, there will be even less compliance. Not because we don't care, or we don't try, but because we just cannot keep up.
There's more, though. Continued in part II.