I haven't really seen anyone talk about this yet, and I'm having difficulty wrapping my head around this VAT MOSS bullshit. I'm completely inept with things like international tax laws, and being on a mixture of antibiotics and hydrocodone might be making me even dumber about this stuff, so apologies if I've gotten this entirely wrong.

So, what is VAT MOSS? As far as I can tell, it's a new European regulation put in place (effective as of January 1st 2015) that targets big corporations that try to divert sales through low-VAT (Value Added Tax) countries in the EU. It's a tax on digital goods sold in the EU, BUT it's determinant upon the location of the consumer, and not the seller. This means that, even though I am a Canadian resident, I would have to pay this tax on any business transaction of digital goods with anybody from the EU. It's so carelessly implemented - and the EU is being very stubborn about not having a VAT threshold in place - that it affects sole traders and very small companies.

Now, just paying the tax itself is already bad enough, when people are often-times already charging below minimum wage rates on commissions, (personally, I price my work at an estimated rate of $10/hour, and minimum wage here is $11/hour) but that's far from the worst part. The real issue is all the hoops you have to jump through and all the paperwork you have to keep on top of. As an example of the kinds of things that would be required of me to be VAT MOSS compliant, here's a snippet taken from a community weblog (http://www.metafilter.com/145004/In-which-the-EU-unintentionally-declares-war-on-knitting-designers):

"You're now responsible for paying taxes to the European country in which that person lives. You must register for a tax number in an EU country (you can pick which one) and then register for a MOSS account. You must collect three non-contradictory pieces of evidence that prove where the person lives. You must store that information for ten years, and you must follow EU privacy laws when you store that information, which includes a requirement that you use a server based in the EU. You must keep track of the VAT rates in each of the 28 EU member states and make sure you pay the correct rate."

So, basically, as an independent, I am pretty much never ever going to be VAT MOSS compliant. Does this mean that now I have to pretty much say no to any European clients for commissions? That sure seems to be the case at the moment, and would be the case for a lot of artists, here and elsewhere.

The other issue this raises is Patreon. They've received some rather dubious tax advice from PwC (PricewaterhouseCoopers) regarding VAT MOSS, and are just not dealing with it at all. A lot of people are panicking and assuming this means the onus is on non-EU creators to do the above with each and every payment from every EU patron. VAT MOSS has specific exemptions for people selling through third-party platforms, but this is only if that platform themselves deal with VAT MOSS for you (which Patreon currently refuses to do.) However, it seems rather strange to me that Patreon creators would be held liable if this issue was ever raised by the HMRC (Her Majesty's Revenue and Customs.)

According to a blog on the subject (http://demonarchives.com/vatmoss-webcomics-patreon/), this is not the case at all.

"How this applies to you as a Patreon user is subject to some complication.

The complication arises from the fact that, in many cases, you are not supplying any goods or services to your customers, but instead receiving donations to support your endeavours.

If however you are supplying content that is not freely available elsewhere, including early access to content that will later be freely available, then you are deemed to be supplying goods and services to which VAT applies.

This does not however mean that you are responsible for paying or managing the VAT on these products. This is because you are not directly receiving payments from those customers, nor supplying content to them.

You are supplying content to Patreon, which accepts users’ subscriptions to that content and pays you based on the number and level of subscriptions that they receive.

This means that Patreon is the merchant as regards taxable transactions and is therefore the entity responsible for managing and paying that tax to the relevant tax offices.

—As a side note, this would not be difficult for them to do, a simple script set up on their subscription pages could apply the appropriate amount of VAT to reward tiers for the user’s region. Patreon would then only have to make one payment, per country, per month, provided that they stored the relevant data on a secure third party server within the EU—"

If anybody has any clarifications or corrections to anything here, it'd be greatly appreciated! This whole mess is extremely confusing to me and it's making my head hurt just thinking about it.