Businesses selling digital goods must pay VAT (value-added tax) according to a customer's location. This policy is mainly aimed at large companies avoiding higher taxes, but unfortunately, it also puts a burden on independent creators who sell to customers in Europe.
Who does this impact?
Anyone making a sale to customers in the EU, beginning January 1, 2015. The countries included in this tax are Belgium, Bulgaria, Czech Republic, Denmark, Germany, Estonia, Ireland, Greece, Spain, France, Croatia, Italy, Cyprus, Latvia, Lithuania, Luxembourg, Hungary, Malta, Netherlands, Austria, Poland, Portugal, Romania, Slovenia, Slovakia, Finland, Sweden, & United Kingdom.
What Vimeo OTT is doing
We want to simplify things for our sellers, so Vimeo will take on the liability of calculating and remitting VAT when selling to EU-based customers. We have built-in functionality to automatically collect the appropriate VAT from customers starting June 1st, 2015.
What this means for you
Publishers don't have to make any changes in order to comply with these new regulations. Focus on the most important stuff — your work!
What this means for your customers
Your EU-based customers will have the correct VAT added to their purchases, and it will state this as such on the checkout form.
For example, if you're selling your content for $10 and a UK customer purchases the item, they will be charged $12 ($10 for the item & $2 for VAT tax). A Swedish customer will be charged $12.50 ($10 for the item & $2.50 for VAT). VAT is always charged on top of the price, and cannot be included in the advertised price.
Vimeo OTT will not be charging fees on the tax collection, so this adjustment will not impact your margins.
If you want to read all the fine print here are some resources: