How to sell digital products worldwide

[eclipse]

Hi, does anyone have any experience of international online digital sales? I’m interested in selling e-books and digital 3d printing files of my own product designs. It sounds easy on the surface, but the more I look into it, it looks so complicated regarding tax for every different country (and state in the USA!) that will purchase from me. My accountant has no knowledge in this field and I don’t know anyone to ask who is doing this. Does anyone have any experience or is anyone already doing something similar and can give me some advice? Or can point me in the right direction? Many thanks in advance!

 

[fisicx]

If you pay tax in the UK you do t need to worry about tax anywhere else. People from other countries will pay you and you tell HMRC how much you earned. Nothing more complicated than that.

 

[eclipse]

Thanks

If you pay tax in the UK you do t need to worry about tax anywhere else. People from other countries will pay you and you tell HMRC how much you earned. Nothing more complicated than that.

Thanks, that's also what I thought but it seems if you sell into Europe you have to be VAT registered which i'm not and if you sell into the USA you have to abide by each states tax laws and register for each state? Just selling in the UK would be easier but most of my market will be in Europe and the USA so it all gets very confusing.

 

[fisicx]

I sell all over the world and have never had to worry about VAT. Your money doesn't cross the border so there is no need to worry about someone else's tax laws.

They pay money into your bank account. You send them a link to a digital download. That's it. Nothing else to do.

 

[Frank the Insurance guy]

You invoice them from the UK and they pay into a UK account - UK regulations and tax applies.

That is totally different from you invoicing inside the US where you would be subject to local regulations on tax etc.

I think you are over complicating things.

 

[antropy]

If you pay tax in the UK you do t need to worry about tax anywhere else. People from other countries will pay you and you tell HMRC how much you earned. Nothing more complicated than that.

Are you sure?

VAT rules for supplies of digital services to consumers

Find out about the VAT place of supply rules if your business sells digital services to private consumers.

www.gov.uk

Paul.

 

[eclipse]

Thanks for your answers everyone, however on the gov.uk website its says:

The place of supply of digital services​

If you are a business making supplies of digital services to UK consumers, those supplies are liable to UK VAT. If you make supplies of digital services to consumers outside the UK these are not liable to UK VAT. They may be liable to VAT in the country where the consumer is based. If you supply digital services to consumers via a third party platform or marketplace, the digital platform is responsible for accounting for VAT on the supply instead of you.

This is where I get confused: "If you make supplies of digital services to consumers outside the UK these are not liable to UK VAT. They may be liable to VAT in the country where the consumer is based"

Does this mean that if I have a UK website selling digital downloads globally, I may have to pay VAT on them only in the UK? (I'm not VAT registered but obviously if I go over the threshold I need to register)

I was told by my accountant that if people in the EU buy my digital downloads I need to pay VAT in Europe and register for VAT in the EU? also if someone from the USA buys one on my digital downloads I will have to pay tax in that individual state so I need to keep records of where they are sold.

If I am selling inside from another country, yes I am sure I would be liable for tax in that country then, but I would be selling from the UK.

Maybe I am being told the wrong info, but my local business enterprise agency also said something similar so I am very confused?

 

[antropy]

I was told by my accountant that if people in the EU buy my digital downloads I need to pay VAT in Europe and register for VAT in the EU?

I think you've been misinformed by some of the others above.

I'm not an accountant but as far as I know you would indeed need to pay VAT in any EU country you sell to. The UK government have created "MOSS" Mini-One-Stop-Shop to handle that for you:

New EU VAT Rules 2015 - Antropy - OpenCart Developers

You may be aware that some rather onerous new tax rules will come in to force from January 1st 2015 to do with the way that VAT is charged in the EU....

www.antropy.co.uk

It's all so complex it's almost not worth doing.

Paul.

 

[eclipse]

I think you've been misinformed by some of the others above.

I'm not an accountant but as far as I know you would indeed need to pay VAT in any EU country you sell to. The UK government have created "MOSS" Mini-One-Stop-Shop to handle that for you:

New EU VAT Rules 2015 - Antropy - OpenCart Developers

You may be aware that some rather onerous new tax rules will come in to force from January 1st 2015 to do with the way that VAT is charged in the EU....

www.antropy.co.uk

It's all so complex it's almost not worth doing.

Paul.

Thanks Paul, yes the more I look into it the more complicated it seems and as you say I am not sure it is worth doing. It may be better for me to sell through a third party and let them deal with that side and take a small loss on the commission they charge. Why do governments make everything so complicated, surely a more simpler tax system and global system would encourage more people to start businesses and make money which means they pay more tax and bring money into the country, rather than discouraging people. Thanks very much for taking the time to reply, you have been very helpful ?

 

[antropy]

Thanks Paul, yes the more I look into it the more complicated it seems and as you say I am not sure it is worth doing. It may be better for me to sell through a third party and let them deal with that side and take a small loss on the commission they charge.

Yes not a bad idea, we sell through here and they handle the rest: https://www.opencart.com/index.php?route=marketplace/extension

Why do governments make everything so complicated, surely a more simpler tax system and global system would encourage more people to start businesses and make money which means they pay more tax and bring money into the country, rather than discouraging people. Thanks very much for taking the time to reply, you have been very helpful ?

It is ridiculous. It sounds like most people above simply ignore the rules, which is an option I guess but not really one I'd recommend.

Paul.

 

[eclipse]

Yes not a bad idea, we sell through here and they handle the rest: https://www.opencart.com/index.php?route=marketplace/extension


It is ridiculous. It sounds like most people above simply ignore the rules, which is an option I guess but not really one I'd recommend.

Paul.

Thanks for the link, yes I would rather set this up properly and deal with it the right way rather than ignoring the rules and then getting a huge tax bill somewhere down the line for unpaid taxes, thanks again for your help ?

 

[ValenDigital]

We have a few clients that have fallen into this 'grey' area. the simplest and easiest way they worked around this was (believe it or not) is create an etsy shop! Job done.

 

[eclipse]

We have a few clients that have fallen into this 'grey' area. the simplest and easiest way they worked around this was (believe it or not) is create an etsy shop! Job done.

Thank you for your response, I actually have a website made using WIX and I upgraded to their VIP e-commerce package as they were doing a 50% off deal but It seems like they still don't deal with all the tax issues, so yes I looked at Etsy but they take a massive commission, so I may look at something similar and if that doesn't work, maybe Etsy! Shame it's such a grey area and overly complicated! Thanks again for your helpful reply!

 

[ValenDigital]

Thank you for your response, I actually have a website made using WIX and I upgraded to their VIP e-commerce package as they were doing a 50% off deal but It seems like they still don't deal with all the tax issues, so yes I looked at Etsy but they take a massive commission, so I may look at something similar and if that doesn't work, maybe Etsy! Shame it's such a grey area and overly complicated! Thanks again for your helpful reply!

Yea, they actually increased the commission rates a few weeks back. Not impressed at all but hey for the headache of factoring in the vat at multiple different locations it may well be worth the hassle.

Regarding WIX.... well... wont say much about that apart from get yourself onto WordPress + Woo at the very least. That way at least you own ALL the code and data and not at the mercy of a SAAS provider. You also get the benefit of fully controlling all your SEO not to mention market place integrations (free G shops) and full FB integration to benefits from ads all of which can be done free.

Sure it may be a hassle (learning curve) but if your budget is tight those types of integrations are free. That will help you release some funds to sepnd on the vat factoring IF you went down 'I own my site' route. Defo something to think about ?

 

[eclipse]

Yea, they actually increased the commission rates a few weeks back. Not impressed at all but hey for the headache of factoring in the vat at multiple different locations it may well be worth the hassle.

Regarding WIX.... well... wont say much about that apart from get yourself onto WordPress + Woo at the very least. That way at least you own ALL the code and data and not at the mercy of a SAAS provider. You also get the benefit of fully controlling all your SEO not to mention market place integrations (free G shops) and full FB integration to benefits from ads all of which can be done free.

Sure it may be a hassle (learning curve) but if your budget is tight those types of integrations are free. That will help you release some funds to sepnd on the vat factoring IF you went down 'I own my site' route. Defo something to think about ?

Yes, I always have a lot on my plate so the thought of dealing with individual countries with their tax and VAT does not appeal to me so I would happily pay some commission to avoid this rather than give up on the idea completely. I only have a basic website so Wix works for me. I am trying to learn so many things at the moment and I have heard good things about Wordpress but just not sure I have the time to learn something else, although out of curiosity I will maybe watch some YouTube tutorials on it to see how easy it would be to learn.

 

[14Steve14]

Before we left the EU I stopped selling downloads to customers in the EU member countries. It was too complicated and required registration with VAT MOSS and lots of monthly papework. Where as in this country we have a threshold before VAT is due, in the EU it was1 Euro before you have to register. It was also all the information you have to keep to prove country of sale and delivery that put us off.

No idea if things have changed since brexit, I doubt it.

 

[eclipse]

Before we left the EU I stopped selling downloads to customers in the EU member countries. It was too complicated and required registration with VAT MOSS and lots of monthly paperwork. Where as in this country we have a threshold before VAT is due, in the EU it was1 Euro before you have to register. It was also all the information you have to keep to prove country of sale and delivery that put us off.

No idea if things have changed since brexit, I doubt it.

Thanks, yes it does seem all very complicated, I've actually been researching this all day, it's exhausting! I have been looking at Etsy, Shopify, Podia, Sellfy, Sendowl etc... The best online platform I have found so far I have found is Payhip, it looks like they deal with the VAT MOSS from what I read here anyway: https://payhip.com/eu-vat
Are you still selling downloads into other countries around the world? and do you find that is easy to manage?

Thanks

 

[Solve My Problem]

I sell all over the world and have never had to worry about VAT. Your money doesn't cross the border so there is no need to worry about someone else's tax laws.

They pay money into your bank account. You send them a link to a digital download. That's it. Nothing else to do. use myshopify

That's not correct with the new EU VAT regulations

 

[myresellerhome]

There are a few things you need to do in order to sell digital products worldwide. First, make sure your product is available in as many languages as possible. Second, create a well-designed website that is easy to navigate and looks professional. Third, make sure your product has clear and concise instructions on how to use it. Fourth, be sure to include social media links on your website and blog so potential buyers can connect with you and learn more about the product. Fifth, put together a strong marketing campaign that will help generate interest in your product among buyers everywhere. Sixth, be prepared to answer any questions buyers may have about the product.

 

[eclipse]

There are a few things you need to do in order to sell digital products worldwide. First, make sure your product is available in as many languages as possible. Second, create a well-designed website that is easy to navigate and looks professional. Third, make sure your product has clear and concise instructions on how to use it. Fourth, be sure to include social media links on your website and blog so potential buyers can connect with you and learn more about the product. Fifth, put together a strong marketing campaign that will help generate interest in your product among buyers everywhere. Sixth, be prepared to answer any questions buyers may have about the product.

Thank you very much for your reply, that's great advice.

 

[fisicx]

Thank you very much for your reply, that's great advice.

Not really, it can apply to any business and is wrong at points three and four.