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Avoiding The Ugly MOSS Mess

Michelle Dale - Thursday, February 12, 2015

There's one thing I loath in business, that's accounting. So when the nice people in the government introduce something like VAT MOSS, I look for the quickest, easiest and most cost-effective way to not let it become a huge headache, and essentially find my way around having to deal with it.

Disclaimer! I am not a legal, tax or financial advisor, this is what my take on it is and I'm sharing with you my solution as to what I'm going to do...

VAT MOSS are the new measures put in place by the EU for selling digital products. These include online programmes, courses, ebooks, images etc... basically anything of a totally automated nature where no human being is involved in the process of the sale.

In layman terms, the best way I can explain it (from my understanding) is that they want businesses (globally and of any size with any turnover) to charge their customers VAT on sales in the EU and then pay that VAT back to the specific EU country in question, this is whether you're in the EU or not.

But that's not all, they also want you to make sure you get a couple of forms of evidence that you know exactly where the customer is purchasing from, like an IP address or phone number and they have to be non-contradictory (like if I'm travelling and buying in Peru and my IP shows up as Peru, but I enter my address as China, that's contradictory), you also have to keep the records for at least a decade.

So you say to yourself, well, I'll stop selling to the EU... But, you're still a criminal because according to EU legislation we're not allowed to discriminate against EU consumers of services with regard to what country they live in, or their nationality.

At this point I've completely thrown in the towel with even attempting to handle this myself for the following reasons.

a) Too expensive (paying for someone to help me with this).

b) Too time consuming, it's already wasted a lot of my time and I haven't even really done anything.

c) I have better things to do with my time.

So my solution is simple, I already sell a majority of my products through Clickbank, and I'm going to move the rest of them in there. Because they handle the VAT, and that makes the commission fee I pay to them for processing my payments all the more worthwhile.

There are also other online payment processors who will do the same for you, so I'm encouraging small business clients to look at other options, such as:

Fast Spring
Amazon
iTunes
Udemy
Digital River
Cleverbridge

It is what it is folks, which in my opinion is a huge mess... you can either close shop or invest valuable time getting your head around it (or paying your bookkeeper to handle it), or let a payment processor handle it...

P.S. It should be noted that this whole MOSS things only applies to B2C (that's Business to Customers) if you sell your digital products B2B (Business to Business) then the rules don't apply. So you could still keep selling by PayPal for example, as long as you're selling to a business and not an individual.


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Hi I'm Michelle, an entrepreneur specialising in virtual assistance, a digital and real world nomad, and a down-to-earth mother of three.



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