Since the 1st of January, a few significant changes in international tax law have been made, something that should especially be taken into account by providers of digital services like online shops, software or e-book downloads, as well as online communities and web hosters. The changes will particularly affect providers from the European Union and companies from outside the EU whose clients are situated in an EU country. With certain exceptions, coworking spaces won’t be affected, but it’s possible that some of your coworkers will be. An example of the aforementioned coworking space exception would be if services your space provides are something like a virtual community, including paid services like a newsletter or voice over IP services. Here’s a short summary of what needs to be noted:
With the beginning of the new year, the EU has passed the new directive 2008/8/EG, which says that from now on, providers (business-to-consumer / B2C) must pay taxes in the country where they sell their products or services. For example, if a French customer buys an e-book from a German online shop, the German retailer has to pay taxes in France rather than in Germany, as it was until now. Furthermore, the German provider has to report their sales to the federal central tax office, the Bundeszentralamt für Steuern.
So according to the new law, as a B2C-provider, you not only have to be registered in every country you are selling your product in, but it’s also your duty to know the tax rules from your relevant sales markets. This sounds complex, but hopefully will be simplified long-term. An exact date has yet to be announced, but a standard sales tax summary report is planned for all countries in the EU sometime in the near future. At that point, you will have to hand in this form to your local tax office. In turn, they will pass it on to the tax offices in your sales markets, which will charge the tax automatically.
If you are affected by this amendment, we highly recommend taking legal advice and getting more detailed information from a tax advisor or lawyer for international tax law.