How the New VAT Tax Laws Affect US Business Owners

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Recently there has been a lot of hype over the new VAT tax laws that are going into effect on January 1, 2015. So I decided to do some major digging and research and see what I can find out and how this relates to our American businesses and put it in as simple terms as possible.

VAT tax laws

The VAT (value added tax) tax laws have really only applied to those in Europe since they have been implemented way back when. And it was aimed directly at those who sold products in Europe, or the business owners. It wasn‘t based on the consumers, where they lived or how the consumers did business. But that is the part that is changing on January 1, 2015. If you sell products and services to anyone who is located in any EU country, these laws will affect you. It doesn’t matter where you live. You could live in the United States, Canada, Australia or even Japan. If you have a customer who lives in the European Union, then you are responsible for paying the VAT tax on your DIGITAL PRODUCTS.

The new VAT tax laws are only going into effect on digital products because the EU has realized that they have lost so much income on not taxing digital products over the past 12 years, that they are going to now start taxing them effective January 1, 2015.

So what do we consider digital products?


Basically anything that is delivered through the internet without human interaction. If you offer an ecourse, that is just videos, worksheets, etc and that is it, then that is considered a digital product. If you offer downloads of meditations or ebooks or similar from your website, those are digital products.

I am not suggesting that you immediately take all of your digital products down from your online store or place notices that you aren’t going to sell to anyone located in the EU. You really do need to do what works for you and your business model.

But there are things you can do to add human interaction to your offerings
so they are not subject to pay the VAT tax.

For your ecourses that you just offer videos, workbooks, etc, you can create a Facebook group and have interactive chats in that Facebook group. There is live interaction. Or you can could a discussion board on a site like Ning to have the option to chat. Ning will also allow you to deliver your content for your course through it’s system as well.

You could also add in a private session with yourself and now the ecourse has coaching as a part of the package and again, there is human interaction in the course and it is not a purely digital product.

In regards to items you sell that are ebooks or meditations or other forms of audio tracks, you can bundle them together and offer them with services like coaching with you or as part of an ecourse that you are now going to have a live Facebook group for.

I’m not telling you how to run your business, I am just giving you some ideas that you can use to change up your business model, as a US business so that you don’t have to register and pay for VAT tax, or post notices that you no longer sell your services to anyone who lives in the EU.

Again, this tax is going into effect for companies that sell digital products to anyone who LIVES in the EU. It does not matter where the business itself is located, or even what type of business you have. It is the business’s responsibility to register for and pay this VAT tax that is due. It may be one heck of a process to find out if a US based sole proprietor company has sold a digital product to someone living in the EU, but believe me, I know how taxes work and they will hunt you down, send you a bill and that bill will have interest on it because it will be years before this bill comes to you.

They really aren’t making this process easy for anyone, but it’s a new tax law that everyone has to abide by.

So you can either make it easy for yourself before the law goes into effect, or you can keep doing what you are doing and have problems down the road.

As I’ve mentioned, this law is to tax digital products. Any product – coaching, ecourses, etc., that has human interaction, as in your physically talk, chat, message on Facebook your clients regarding the course or coaching they have purchased from you, then you are not being forced to pay this tax.

I would encourage you to do your own research, just like I have to make sure what I am talking about makes complete sense to you as well. And always make sure to continue to watch this process as it evolves more and more down the road, because just like any new process, especially with taxes, it is going to continue to change and evolve as time goes on to make it easier and simpler for the man collecting the tax.

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photoClarissa is a very well educated woman with 3 college degrees – a Bachelor’s in Accounting, an MBA in Forensic Accounting, and an MSA in Forensic Accounting. She is also a Reiki Master, Certified Crystal Healer and an all around energy healer. Most of her energy healing work has been self taught in taking techniques that worked and tweaking them to work a little bit better for her. And because of this, she has developed her Zone of Genius – being able to tune into the energy of businesses and do some amazing clearing energy work on those businesses.

Clarissa is an old soul with a lot of life experience despite her very young age. But she only does things she absolutely loves and follows the advice the universe gives her.

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About the Author Clarissa

Clarissa Wilson is a financial strategist and online educator who holds two master’s degrees in Forensic Accounting. Also creative and spiritual, she is an intuitive empath and introvert. Clarissa is the host of The Prosper + Profit Podcast, where money conversations occur on a daily basis -- as she believes that money shouldn’t be a taboo subject. After growing up on a dairy farmand learning to work hard for money, Clarissa awakened to a path that allowed wealth to flow easily to her. Clarissa currently lives in Pennsylvania with her two cats.

  • Sierra says:

    Thank you for this Clarissa! I’ve been wondering about the VAT stuff and everything I’ve read confused me to no end. I’ll probably do the facebook group add-in for all my workbooks. This will help add value so I think it will make things better. Woot! Thanks for the clarity!

  • Clarissa says:

    You are welcome. But please be careful about selling just an ebook and then having a FB group to go along with it. There is a difference there as the way you said it, you sell individual ebooks. If that is the case, then you may want to use a service like Amazon Kindle or Payhip where they deal with the whole VAT stuff for you.

  • Sierra says:

    I will keep that in mind! Thank you again 🙂

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