Editor’s note: This is a guest post by Carlos Hernandez, founder of Quaderno
The new VAT rules in the EU came into force in January 2015, and they’re piling more paperwork and stress on startups and small businesses. Just to remind you: the new VAT rules mean you have to charge VAT based on where your customers are located, not where your business is located, a change that could see you dealing with 28 different rates of VAT.
In the past, VAT was charged at the rate of the vendor’s home country. Making the VAT you pay dependent on your country meant that large companies like Amazon and Apple would register corporate headquarters in virtually-taxless Luxembourg, which is a big reason for the new rules.
From January 2015 on, VAT has to be charged at the rate of the purchaser’s home country. Not such a big change, right? Well, before your online business only had to charge VAT at one rate. Since some EU countries have different VAT rates for different items there are potentially 28 VAT rates across the EU, and if you sell a digital product or service (a category which includes software, ebooks, and more) you have to be ready to charge them all.
That’s not even the tough part.
EU data protection rules mean you have to keep data on your customers, proving where they’re paying from (their word isn’t enough, or everyone would just say ‘Luxembourg’) – and hold on to that data for 10 years. At the end of each quarter you have to send out a VAT statement to each EU country you have customers in, then pay the statement.
Since that’s a crushing bind that many startups and SMBs don’t carry the hardware or the staff for, the new EU VAT rules are pretty unpopular. Some companies are just pulling out of European operations. Others are looking for someone to take the load off their backs so they can serve their customers in peace, knowing it’s all taken care of.
Enter PAYMILL and Quaderno.
Yes, it’s a weight off knowing you can just integrate your PAYMILL account with Quaderno and everything around the back gets taken care of. Invoicing? No problem. We can deal with that. Refunds? Same. Send your customer a credit note automatically. But what we’re most proud of is that a PAYMILL customer who wants to remain VAT compliant across the EU can now do that, simply and easily.
If you have any questions, please let us know. We’ll be happy to help you to make your invoicing easier.
About Quaderno. Quaderno provides a easy-to-use solution to automate your invoicing and comply with EU VAT rules. Quaderno integrates seamlessly with PAYMILL. It calculates taxes on the fly and automatically sends beautifully designed invoices to your customers. Transparent, easy to use, and pleasing to the eye. For more information visit quaderno.io or follow us on Twitter.