Have you heard about the EU VAT law's that are going into effect on January 1, 2015? As in 2 days from now? Will, just Google it and you'll find loads of confusing information.
Basically it means that any seller of digital items sold to a consumer located in the participating European countries, must pay a VAT (value added tax) to the country where the digital item was purchased. In order to do so, the seller must provide two forms of evidence of the location of the buyer, and pay the taxes, which vary by country, every quarter. The seller must also keep this information for ten years. Basically this is a LOT of work that is nearly impossible for small businesses like myself. Way more expensive than the $1-5 I might owe in a given year.
How this effects me:
I sell most of my patterns on Craftsy. Craftsy is not doing anything to provide the needed information to the pattern sellers to be able to pay the tax if we wanted to do it ourselves, and will not be handling the VAT for us.
What this means for Craftsy: I will be removing all of my paid patterns for their site. I'm not sure how this will affect them, as many shops have already closed and will be closing shop before the 1st. I'm assuming they will lose a lot of business, as people won't be referring their customers to their site to buy patterns. The ideal thing would be that this hurts them tremendously, and they decide to help us out!! Even if that means they start charging a small fee to sell patterns on their site. We'll see. (Not that I want them to be hurt by this, as I wish everyone success, but sometimes a little incentive helps the masses).
Etsy: is sitting this out as well. Even though it seems they should be responsible, they have stated that they will not be. Supposedly they will sometime in the year provide information to shop owners to deal with VAT, but who knows when that will be. A lot of people will be discontinuing the instant download feature for their shops and emailing patterns personally. Though this is only a solution for UK buyers, and not for buyers in other EU countries. I personally don't have time to do that anyway. My customer service would go down the drain!! I believe I have found a solution that I can sell patterns to those outside of EU, and can still include the instant download feature, using CraftHub.me, which works with Etsy, and actually had better features than Etsy for instant downloads. I'm still looking into it and don't have everything figured out completely. But I'm hoping it will work as smoothly as is like. If it doesn't, I may just increase shipping costs to $100 to EU buyers to deter them from purchasing from me.
That sounds horrible and that's what I hate most about this!! Reading so many discussions and comments, and so much talk of people simply restricting sales to the EU. My heart breaks for everyone who will be facing a possible storage of patterns to choose from!! Not awesome!! I am looking into working with a different website to host my patterns, that will take care of all fees and VAT stuff for me. I will update you with this info as it comes together. This will make all my patterns available to all EU customers!! Wahoo!! I'm not about to leave you out!! :)
As for bigcartel, I'm pretty sure they are not doing anything about this, and I will be looking into another solution for selling my patterns, perhaps on my website, or a similar host as bigcartel, that will cover the VAT fees.
So what's the story for right now???
Starting January 1, 2015, I will be closing all my pattern shops. I think I'll be able to get them back up and available the quickest for US customers. It will take the longest for European countries, and probably all other countries??? I'm not sure how long it will take.
If you have been wanting to buy any of my patterns, nows you're chance, until, I'm not sure when. There are solutions, and I am going to find them. Hopefully it will be a smooth and quick transition, but really, it's just a mess right now for everyone.
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Thanks for all your support!! I hope you are having a wonderful holiday!!
I'll keep you updated! :)