VAT and other taxes?

Discussion in 'Indie Business' started by Reives Freebird, Dec 8, 2011.

  1. Reives Freebird

    Reives Freebird New Member

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    Ack, I started selling games for the first time a month ago and I have 0 idea what I'm supposed to do about the taxes at the moment, hahah. . .

    e.g. I'm selling soundtracks via Bandcamp, and according to the polices, we are supposed to handle all the taxes including VAT ourselves.

    Apparently different places have different rates too; do I just use the US's rate since Bandcamp's there? And are there any other vendor taxes to worry about?

    Many thanks in advance!
     
  2. hippocoder

    Indie Author

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    Get an accountant.
     
  3. lennard

    Moderator Original Member Indie Author

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    A couple of hours of an accountants time can easily chew up everything a first time release makes...

    I'd look at BMTMicro and TrialPay as they handle it all for you.
     
  4. Applewood

    Moderator Original Member Indie Author

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    +1 for the accountant. A first consultation is usually free anyway and you're under no obligation.
     
  5. Nutter2000

    Original Member Indie Author

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    +2 for an accountant. Don't know where you're based but here in the UK there are several small business focused accountants around that only deal with companies under £1m turnover and who don't charge the earth.

    However, at the risk of sticking my neck out and be aware that I AM NOT AN ACCOUNTANT, LAWYER OR A.N.OTHER SIMILAR PROFESSION ;) ...
    ... in my experience, assuming your in the EU, VAT is charged at your local rate IF you're selling within the EU because a) you're selling within the EC and b) you're the one selling the service/product and therefore must charge VAT at your local rate
    Selling outside the EU, is 0 rated VAT so long as you're selling from your own website (this is where it all gets a bit hazy and hand-wavey), it's only if you have your business registered in the US or have a significant part of your business in the US such as employees, then you would need to charge local US sales tax (I think).

    In general, selling from your own website to outsie the EU means there's no tax to pay.

    Personally, in practice, we just sell at one price to the customer and deduct VAT where applicable so the customer never sees it.

    However, I stress ask an accountant who knows these things in more detail ;-)

    Like Lennard says most reputable payment processors will handle that for you if you want but it is best to get an accountant so that you know yourself and you don't get a nasty shock from the tax man!
     
  6. Gary Preston

    Original Member

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    Nutter: I thought you only charged VAT if you're VAT registered which is optional until you hit a specific sales figure in a year? Can't remember what that figure is off-hand but 60-70k rings a bell.

    Accountant is certainly the best advice though, it doesn't take long before they save you more than they cost too :)
     
  7. Desktop Gaming

    Moderator Original Member Indie Author

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    It's currently £73,000 but this increases year on year.
     
  8. Nutter2000

    Original Member Indie Author

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    Yes you're dead right, I am assuming that you're VAT registered otherwise you basically don't have to worry about it really.
     
  9. DanFromFastSpring.com

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    Try a full service solution like FastSpring that handles global tax management and other painful issues for you so you can focus on growing your business.
     
  10. luggage

    Moderator Original Member Indie Author

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    Don't forget your personal taxes as well. Any income you take has to be declared and tax paid on that assuming you earn above the tax free income threshold.
     
  11. Nutter2000

    Original Member Indie Author

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    Hahaha sound advice from Dan as always (just don't forget to consider the source :p)
     
  12. Thomas@BMT

    Thomas@BMT New Member

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    I didn't say anything because I know you all know we've been doing it for almost 20 years. :)

    <sorry, couldn't resist..>
     
  13. Nutter2000

    Original Member Indie Author

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    Sorry? who are you again? :p

    (couldn't resist either ;))
     
  14. Thomas@BMT

    Thomas@BMT New Member

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    :) Nothing's worse than posting a message and not being able to delete it.

    But anyway, back to the topic - collecting VAT and sales tax, making the reports, and beaming the money around takes some time even when the calculations are done at the push of a button.

    This is waaaaay off topic and just a comment but my current nightmares are about the euro being dissolved. I can't imagine the issues that would create for us....
     
  15. lennard

    Moderator Original Member Indie Author

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    I was talking to a friend today and it would seem like PayPal must also deal with these issues for the dev. - for one thing, why would they care if a payment was for a good or a service if they didn't?
     
  16. Nexic

    Indie Author

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    As far as VAT goes, you can set PayPal to add a percentage tax for certain countries, but that's it. You still have to file your VAT returns and pay the money yourself. I believe the goods or services selection is mainly for them to comply to money laundering regulations.
     
  17. Nutter2000

    Original Member Indie Author

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    I think also the services selection was to provide a way for recurring payments
     
  18. lennard

    Moderator Original Member Indie Author

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    VAT, must be one of those EU things... I will look into it further but I suspect I only need to charge sales tax on British Columbia sales.
     
  19. Nutter2000

    Original Member Indie Author

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    It's not just EU & Britain but it is mainly EU & Britain. You shouldn't need to worry about it if you're outside of the EU.
     
  20. gamer247

    gamer247 New Member

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    You gotta pay VAT, doesnt matter if you sell from outside of EU or US or whatever country you are in, you do not pay VAT your customer does. So you can add VAT yourself and do all the paper crap or let BMT do it for you. VAT is charged by your own goverment. So EU can charge you guys to death for all I care.
     

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