[lukeredpath]

As I mention in my post below, if you're a non-EU company selling digital goods and services to EU customers, then strictly speaking these new rules don't change much - it's was already the case that non-EU suppliers that supply electronically supplied services to EU customers (B2C transactions, not B2B) should be charging the customer VAT at their local rate.

Businesses could choose to register in each state or a single one using the VoES (VAT on e-services) system. These rules have been in place since 2003.

However I imagine that a lot of non-EU companies didn't bother with this either out of ignorance or simply because they didn't care or thought it could be enforced.

Under these new rules, MOSS replaces VoES but it's practically the same thing. This mostly affects EU businesses who now have to charge the rate where the customer belongs, not where the supplier belongs.

[wbond]

I think ignorance is almost exclusively why non-EU companies didn't use VoES. I never heard of it until this fall when I started hearing rumblings of VAT MOSS.

When starting a small business where you sell digital goods, one of the last things you are thinking about is researching tax laws for the 250 countries around the world (or trying to find an accountant versed in tax laws around the world). Instead, you worry about laws based on where you operate from.

I realize that the EU implemented VoES since it is easier to enforce tax collection on businesses than individual consumers, but it is pretty messed up from a conceptual standpoint. Making every business that could possibly ever sell a non-physical good from a website have to register in foreign countries, deal with making international wire transfers, generate invoices based on laws in 28 different countries, etc. The alternative being consumers pay the appropriate tax to the country they already pay taxes in…

[symfrog]

In many countries consumers are already supposed to pay over the VAT component on foreign purchases. It turns out, that almost no consumers ever did that, and now the collection liability is being shifted to companies instead.