Learn how and where to find out what you need to know about VAT
for: artists and art teachers, art exhibition and competition organisers, museums and galleries, 

PLUS VAT on art supplied or sold by artists in UK and/or EU

VAT for Artists - Contents

QUICK START BASICS - ABOUT VAT

• VAT Basics:
  • ​What is VAT;
    
  • VAT Tariff Rates;
    
  • VAT Registration Thresholds
• VAT on Art and when VAT is not applicable
• VAT on exemptions

​
ABOUT VAT AND THE ART BUSINESS

• artists' business activity
• art education
• art museums
• commercial art galleries
• online galleries
• open exhibitions and art competitions
• digital art services and digital art supplies
• selling art supplies and art across borders 
• distance selling of art
• digital supplies and ecommerce platforms

Who needs to know about VAT?
​

Value Added Tax (VAT) is a topic of interest to:

• artists living in the UK and/or European Union (EU) who are making sales as:
  • professional artists 
  • artists selling art online 
  • anybody selling digital goods and services relating to art in the UK and/or EU
• Non-established taxable persons (e.g. international artists who do not live in the UK or EU who are importing art for exhibitions and//or sale in the UK or EU);
• art societies and competitions wanting to
  
  • hold exhibitions involving international artists
  • sell art online
• art galleries wanting to sell work by international artists in the UK and by UK artists to customers within the EU.
• art schools charging for tuition and employing tutors

This page is a WORK IN PROGRESS for the foreseeable future ​
​- VAT updates all the time!
HOWEVER I am not a VAT specialist and you MUST NOT assume I'm up to date with all the updates!
LAST UPDATED: 11 JUNE 2022

IMPORTANT DISCLAIMER

Those who need to know about VAT need to start somewhere.....

NONE of the information on this page is definitive, comprehensive or complete. 
NONE of the advice on this page should be treated as professional advice.
Information and advice may also be out of date. 

That's because it's absolutely impossible to keep up with all the changes unless you are a qualified professional practitioner who is doing VAT full-time and there's no way I'm going to do that!  

However I do reference and link to relevant government and EU guidance where I can
Official guidance is always a good place to start when checking any aspect of VAT.
It also helps frame specific questions to professionals which can then reduce fees due for advice given.
​
This page also references advice and guidance from one firm which does appear to know what it is talking about in relation to the EU regime in different countries and cross border sales- and I have found few equivalents. I'm not averse to hearing about more!

BREXIT: I've still not updated all sections of this page for Brexit - because the agreement was so late and because the advice has been slow to emerge - and is still emerging! ​See Brexit - New Rules are Here

FIND OUT ABOUT VAT
​

This section concerns ABOUT VAT BASICS

• What is Value Added Tax (VAT)?​
• VAT Tariff Rates
• VAT on Art
• VAT on exemptions​

Then

• VAT registration Thresholds - IN THE UK
• Making Tax Digital (VAT)
  

I'm based in the UK, a lot of my readers are based in the UK and this section is UK biased. How I do reference the EU countries and arrangements and try to make the information accessible for those living in countries without VAT.

DO PLEASE READ official government guidance.
​My words is not the law - and their words are!

 For a transaction to be subject to VAT three conditions must all be met:
1 The transaction must be a supply.
2 The supply must be made in the course or furtherance of a business activity.
3 It must not be an exempt supply.
​Tax issues for arts organisations made simple | Sayer Vincent

What is Value Added Tax?
​

VAT in the UK: REFERENCE
​

Value Added Tax (VAT) is a form of sales tax. 
​
VAT is a tax applicable to all goods and services SUPPLIED in all countries within the UK and European Union.
It is applied in ways which are defined by both the UK and EU and the government of individual countries in the UK and EU.

IN SUMMARY - for artists:

• IF your TURNOVER (gross sales) of taxable supplies exceeds the VAT THRESHOLD
  • you MUST register for VAT; and 
  • you must charge VAT on art you sell (as a business) (see VAT Thresholds for direct sales and distance selling - below) 
  • you can then reclaim VAT on goods and services supplied to you
• if your total business turnover does NOT exceed the VAT threshold  (i.e. you do not generate enough sales to register and do not have any other sources of income for your business) 
  • you do NOT need to register or charge VAT (which is why leisure artists don't charge VAT)
  • you cannot reclaim VAT on goods and services supplied to you
  • EXCEPT if you make digital supplies (see below)
• If you sell digital goods and service (e.g. art instruction videos on DVD)  you must register for VAT in the EU countries where your customers live - and the threshold is ZERO (i.e. it applies to all sales)
• If you opt to register for VAT, you can reclaim VAT charged and paid on the supplies you buy  ​
• All VAT registered businesses need to keep digital records and submit VAT Returns to HMRC using compatible software.
  

REFERENCE:
HM Revenue & Customs (UK) - FAQs and VAT Notices

​Business Tax: VAT Detailed Information

• Business Tax: VAT Detailed Information - lists all items covered on the HMRC website

How do I find out more about VAT?

• VAT Notice 700: the VAT guide (January 2015; last updated: 31 December 2020)

Why register for VAT?

• VAT Notice 700/1: should I be registered for VAT? (February 2014; last updated: 31 December 2020)

Below you will find the relevant VAT Publication for frequently asked questions relating to VAT.

​What VAT records do I need to keep?

• VAT Notice 700/21: keeping VAT records
• VAT Notice 700/22: Making Tax Digital for VAT

​How do I get a refund?

• VAT Notice 723A: refunds of VAT in the European Community for EC and non-EC businesses

REFERENCE: Other sources

• ​Wikipedia - Value Added Tax (UK)
• ​Tax issues for arts organisations made simple | Sayer Vincent - includes a simple explanation of how VAT works

The VAT Tariff Rate
​

The different VAT Rates

The tariff is the rate at which VAT is levied.
​
There are three different basic rates and then a class of exempt goods and service. The principle is that the default standard rate should always be charged unless approval has been given by the EU to vary it or the country has raised the standard rate above the default.

• The Standard Rate - applied to most goods and services unless they are eligible for a reduced or zero rate.
  
  • The default minimum rate across the EU is now 15%.
    
  • In the UK the standard rate of VAT increased to 20% on 4 January 2011 (from 17.5%). ​
• The Reduced Rate - applied to some goods and services where the case has been made for a reduction for the public good
• The Zero Rate - reserved for defined essentials including books (but not digital ebooks)
• Exempt - goods and services on which no VAT can be levied
• Outside the scope - these are items on which VAT will not be levied

REFERENCE: UK Government Guidance

• VAT rates on different goods and services - this is the government website which states the VAT rates
• Businesses and charging VAT - the rates a business charges depends on the hature of the business and the goods and services produced (see Is an artist a business? below)
• VAT rates on different goods and services - A government list of different goods and services showing which rates of VAT apply in the UK and which items are exempt or outside the scope of VAT. The VAT Rate on art IMPORTED into this country is 5%

UK Example:

• ​The standard rate of VAT on most goods and services in the UK is 20%. This is mandatory for all businesses selling art who are above the VAT threshold i.e. MUST be VAT registered
• The VAT Rate on art IMPORTED into this country is 5%
• The zero rate is reserved for essentials such as food and books (but NOT digital e-books).
• Art can be exempt in specific circumstances - see VAT on Works of Art section below

Different VAT rates in different countries
​
The reality is that the VAT tax tariff rate - and what it is chargeable on - can vary from country to country within the European Union. 

The intention was that a single rate would be applicable across all countries.

• The notion was that harmonisation of tax regimes would make trade easier and enhance bonds between countries.
• HOWEVER some countries chose to have a lower standard rate and this has distorted the market eg Amazon is based in Luxembourg because its 3% tax rate on ebooks helped make Amazon prices very low across all the EU
  

In recent times the EU has been tackling issues of differentiation and trying to harmonise VAT across the EU e.g.

• the minimum standard rate of VAT is now 15% everywhere and
  
• matters relating to digital transactions are being brought into line.

REFERENCE: Government Guidance

• VAT: European Law on VAT Rates | House of Commons Library - this covers the history of the EU's VAT Strategy over the years and different moves made to improve harmonisation
• HMRC VIDEO - Tax and VAT issues when trading with other countries using the Internet

EU Commission May 2016

• Commission proposes new e-commerce rules to help consumers and companies reap full benefit of Single Market
• Boosting e-Commerce in the EU - a Fact Sheet - this identifies what geoblocking is and the nature of the specific proposals being made by the EU to promote e-commerce across borders.

REFERENCE: Other Advice

• Tariff rates across the EU | Accordance VAT - EU countries have flexibility about what VAT rates they implement, however the lowest standard rate that can be applied is 15%.
• Distance Selling EU VAT Thresholds | Accordance VAT
• EU VAT Rates, Formats & Thresholds | VAT Global

When VAT is paid on Art (in the UK)

FACT: UK VAT rate on art or art services is 20%

IF ONE OF THE FOLLOWING APPLIES:

• you are in business to sell art (e.g. a gallery or art dealer or an artist selling direct to the public)
• your turnover (i.e. gross sales - NOT profit) in a rolling 12-month period exceeds the VAT registration threshold of £85,000 i.e. when it becomes mandatory to register and change VAT. (see below)
• your sales via distance selling in a calendar year (1 January - 31 December) exceed £70,000 (see distance selling below)
• your business activities are within the scope of VAT irrespective of turnover e.g. sales of Digital Goods (anything on a DVD or CD / digital download) and Digital Services relating to art)
• you have imported art to the UK and then sold it. VAT @ 20% applies at the point of sale.

UNLESS the art (goods or services) are exempt.

FACT: If you ever get your liability for VAT wrong you could: 

1. receive a sizeable tax bill and/or
2. incur penalties for tax evasion
3. face prison.

Most leisure artists and those who are not successfully pursuing art as a professional full-time business are unlikely to be affected if their turnover or activities do NOT exceed the threshold for VAT registration - unless they sell digital products.

REFERENCE: 

• VAT Rates on Different Goods and Services | HMRC
• VAT and overseas goods sold to customers in the UK using online marketplaces | HMRC
• Distance Selling | Gov UK
• Online Selling | Gov UK

When Art is EXEMPT from VAT (UK only)

FACT: Disposals of art are exempt from VAT - ONLY IF they are PRIVATE assets

• Art Assets sold - in a private sale - from a house used as a private residence i.e. does not charge for access (including house clearance sales) are not normally business assets (i.e. not bought in) and such sales are outside the scope of VAT. 
  • However artists with a studio at home need to take advice about when all sales from their home studio become vattable - because their activities constitute a business.
  • My assumption would be artists selling from home are OK so long as
    • their sales remain under the registration threshold
    • AND there is no suggestion they are running an art gallery to which the public have access
• Antiques, works of art or similar (as assets of historic houses) sold by private treaty to public collections are EXEMPT from VAT

Works of art are PRIVATE ASSETS (i.e. not business assets) and outside the scope of VAT ONLY IF 

• IF they are disposed of by private treaty sale,
• or disposed of in a way not involving a sale, to
  • a specified public collection
  • or other body and estate duty,
• Art can qualify for exemption from VAT if an object of national and historic interest. 
• THEN capital transfer tax, inheritance tax or capital gains tax is NOT chargeable on the disposal for acceptance in lieu of
  • estate duty,
  • capital transfer tax or
  • inheritance tax

REFERENCE: See VAT Notice 701/12

 VAT REGISTRATION thresholds / turnover

VAT Registration Thresholds - in the UK
​

The Threshold relates to TURNOVER - that is gross sales of all VATable goods and services supplied.

• It's NOT about profit and
• it applies even if you're NOT making a profit.

The threshold is based on your VAT taxable turnover - the total value of everything you sell or supply that isn’t VAT exempt.

​Below are the turnover thresholds defined by the UK government for (1) mandatory registration for VAT from 1 January 2021 (i.e. post Brexit)

• VAT registration including for small enterprises - More than £85,000
• Registration for distance selling in the UK - More than £70,000
• Registration for bringing goods into the UK from the EU - More than £85,000
• Deregistration threshold - Less than £83,000
• Completing simplified EC Sales List - £110,500 (i.e. more than the VAT Threshold + £25,000) or less and supplies to EU countries of £11,000 or less

There are also thresholds for joining a VAT accounting scheme 

​REFERENCE: Government Publications

• VAT Registration Thresholds | GOV.UK
  • The thresholds for registering for VAT or joining a VAT accounting scheme from 1 January 2021.
  • The Thresholds are periodically reviewed by government. 

The VAT Registration Thresholds - in EU Countries

The VAT Registration Thresholds can vary VERY SIGNIFICANTLY

• from country to country in the EU
• from year to year
  

For example, the 2021 VAT registration annual thresholds for resident companies in....

• Denmark DKK 50,000
• France Goods €85,800; Services €34,400
• Germany: €22,000
• Ireland​: Goods €75,000 | Services €37,500
• Italy €65,000
• Netherlands €20,000 (used to be NIL in 2019)
• Spain €NIL

The VAT Thresholds for anybody selling art in a country they are not resident in may be completely different.

• For example, if you sell art in France the threshold is NIL i.e. you need to be registered for VAT if a Non-French resident before you sell any.

The current registration threshold for taxable supplies is £85,000.
(UK) VAT Notice 700/1: supplement
​Updated 9 June 2021

​REFERENCE - EU Guidance

• European Official Statement of VAT Thresholds - for all the countries in Europe - as at July 2019 - this includes the thresholds for required registration special scheme for distance selling and the exemption for small enterprises
• EU VAT registration thresholds | Avalera VAT live

REFERENCE - EU Distance Selling Thresholds

• E-Commerce: Distance Selling VAT Registration Thresholds - you must register for VAT and file returns when thresholds are exceeded. Typical thresholds are €35,000
• Distance Selling EU VAT Registration Thresholds | VAT Live

REFERENCE - Ireland

• VAT and Artists | Visual Artists Ireland Artists - this text is a simple guide to VAT general rules and administration. Professional advice is advised for all large sums.

Validate a VAT Registration Number 
​

This is a SIMPLE VAT Checker: EU VAT number validation

VAT Fraud can involve companies which claim they are VAT registered - and charge VAT - but they are not.

Before conducting business with a new EU customer or supplier you should always verify their EU VAT number if they claim to be VAT registered.
​VAT Checker: EU VAT number validation | Avaleera

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VAT on Works of Art
​

VAT on artwork and paintings - new and old
​

In general the presumption is that art is exempt (see box)..
​
UNLESS its supply is related to business activities when art is standard rated.
See sections BELOW relating to:

• VAT and Artists' Business Activities
• VAT and Commercial Art Galleries
• VAT for Organisations holding art competitions, juried exhibitions 
• etc

UNLESS art is imported - VAT is paid @5% on all art IMPORTED into the UK. VAT is payable at differing rates on imported art in other countries within the European Union.
see section BELOW relating to VAT - Cross-border supplies and sales of Art and Distance Selling of Art

EXEMPTION FROM VAT
​
Official Exemption from VAT on ART 
Sales of paintings which are not related to generating income as a business activity can mean that certain artworks are exempt from VAT:

​EXEMPT Art Disposals

• Exempt VAT Notice 701/12 - Antiques, works of art or similar (as assets of historic houses) sold by private treaty to public collections
• Exempt VAT Notice 701/12 - Antiques, works of art or similar (as assets of historic houses) used to settle a tax or estate duty debt with HM Revenue & Customs

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ADVERT

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VAT and Artists' Business Activities

Is an artist a business?
​

Artists are a business subject to VAT when they SUPPLY goods and services e.g. try to sell their art and earn an income from it

Artists may not regard their art as a product but that doesn't mean VAT is not charged on art in certain contexts

An artist is "a business" IF:

• it is an occupation generally regarded as a trade, profession or vocations (i.e. Yes - an artist can be a business)
• an artist's activities involve supplying goods (e.g. paintings) or services (e.g. commercial advice) for money. This definition should include most artists - even if their supply is irregular and/or 'not for profit'.

ONLY those pursuing their art entirely as a leisure pursuit and/or making no sales have no cause for concern about VAT.

NOTE: Art Education can be EXEMPT from VAT if delivered:

• by an eligible organisation - ONLY as defined by relevant legislation and regulations
• as private tuition by an individual

(see specific section below - VAT on Art Education - eligible bodies and business activities - for more details and to check out your specific circumstances)

REFERENCE:
Artquest is one of a very few sources of articles about VAT

• Vexing Art Toll | Artquest - discusses how VAT applies to artists - however this is a seriously old article
• VAT Revisited | Artquest - A look at some of the problems associated with VAT and and at possible solutions to avoid costly penalties.
• VAT minus zero - no limit | Artquest - 

Do I supply 'goods and/or services'?
Supplies include sales, free gifts, loans, barters, exchange of services (but not given free of charge) made in the course of a 'business'. Artworks, art books and publications, lectures on or about art given for profit, will all be supplies for VAT purposes.
Vexing Art Toll | Artquest

EXEMPT FROM VAT

• Earnings from the Artist's Resale Right

The Artist’s Resale Right is exempt from VAT, so there are no VAT consequences of receiving a resale royalty. Any resale royalties you receive should not be included on your VAT return.
DACS | FAQs

RECOMMENDED REFERENCE:

• VAT considerations for artists | Mishcon de Reyer - covers
  • ​travelling with artwork in the EU
    
  • when an artist travels to repair an artwork - taking art materials with them (re. "Outward Processing Relief")
    
  • when an artist transports artwork back to their studio to repair
  • VAT payable in the EU on artwork on shipping to the UK for sale

​Calculate VAT taxable turnover
​

You must register for VAT if:
- you expect your VAT taxable turnover to be more than £85,000 in the next 30-day period
- your business had a VAT taxable turnover of more than £85,000 over the last 12 months
VAT Registration | HMRC

It is COMPULSORY to register for VAT when gross turnover exceeds the VAT Threshold for registration. 

​Below is the precise wording of government advice on how to calculate your taxable turnover. Goods and services in this context relate to your business activities as an artist (see above)

To check if you’ve gone over the threshold in any 12-month period,
add together the total value of your UK sales that are not VAT exempt, including:

• goods you hired or loaned to customers
• business goods used for personal reasons
• goods you bartered, part-exchanged or gave as gifts
• services you received from businesses in other countries that you had to ‘reverse charge’
• building work over £100,000 your business did for itself

Include any zero-rated items - only exclude VAT-exempt sales, and goods or services you supply outside of the UK.

VAT Registration in UK (2019) 
​THRESHOLD: More than £85,000
​
Registration for distance selling into the UK - THRESHOLD: More than £70,000
​

Late registration
If you register late, you must pay what you owe from when you should have registered.
​
You may get a penalty depending on how much you owe and how late your registration is

​REFERENCE - VAT REGISTRATION:

• VAT Registration | HMRC 
• VAT registration thresholds | HMRC - The thresholds for registering for VAT or joining a VAT accounting scheme from 1 April 2017.
• VAT Registration: Calculate VAT Taxable turnover | HMRC

Making Tax Digital - VAT in UK
​

All business who taxable turnover in excess of the VAT threshold
MUST comply with the mandatory requirement for DIGITAL REPORTING from 1st April 2019
​

VAT registered businesses with taxable turnover above the VAT registration threshold need to keep digital records and submit VAT Returns to HMRC using compatible software.

This applies to all art businesses registered for VAT. 

​HRMC’s Making Tax Digital for VAT requirements from 1st April 2019 are that VAT registered businesses

• need to adapt to new digital recording obligations
• must meet specific requirements to file on the new API platform
• must meet deadlines
• will be fined if they do not comply

HMRC Advice covers
1. Introduction
2. Check if you have to follow the Making Tax Digital rules
3. Exemption from Making Tax Digital
4. Digital record-keeping
5. Voluntary updates
6. Supplementary data
7. Agents
8. Examples of where a ‘digital link’ is required
9. Your rights and obligations
10. If you have a question about VAT, excise or customs duty
11. Putting things right
How HMRC uses your information

You can apply for an exemption if there are specific systems reasons why this cannot happen by the due date (i.e. you've neglected to read the VAT Notices and get this sorted is not a valid reason)

REFERENCE: OFFICIAL HMRC NOTICES AND GUIDANCE 

• ​VAT Notice 700/22: Making Tax Digital for VAT 17 October 2019
• Making Tax Digital: how VAT businesses and other VAT entities can get ready 
• Check when a business must follow the rules for Making Tax Digital for VAT
• Keep digital records for Making Tax Digital for VAT
• Find software that's compatible with Making Tax Digital for VAT 
• Apply for an exemption from Making Tax Digital for VAT (Guidance)

OTHER REFERENCES:

• VAT e-file spreadsheet | PWC - “I need to comply with HMRC's Making Tax Digital, but don't want to switch from using excel. Now I don't have to."
• Making Tax Digital for VAT | Charity Tax Group
• Making Tax Digital white paper | Avaleera (Free download)
• Death of the European VAT return | Avaleera - This white paper is a Country-by-Country guide explaining the trend for European countries to transition towards digital transaction reporting

VAT Margin Schemes - Art
​

Most items normally described as ‘works of art’ are eligible. There are some exceptions, eg technical drawings, scenery for theatres and hand-decorated manufactured items.
VAT Margin Schemes: Eligibility

You can use a VAT Margin Scheme

• if your GROSS TURNOVER (i.e. sales not profit) normally exceeds £79,000 (i.e. the threshold for VAT registration)

AND

• You are eligible to use the Margin Scheme. VAT Margin Schemes are available to those who sell second-hand goods, works of art, antiques or collectibles on which no VAT was paid when you bought them. Hence there is no VAT to reclaim.
• you account for VAT via A VAT Margin Scheme by charging the standard rate only on the difference between the price paid for an item and the price at which you sell it i.e. the margin. If you don't make a profit you don't pay any VAT.
• However, standard VAT accounting must be used for all other sales and purchases such as overheads.

REFERENCE:

• Overview of VAT Margin Schemes | gov.uk

• VAT Rates: ORIGINAL PAINTINGS (Works of art) | Irish Tax and Customs
• Art Gallery VAT | Accounting web - this includes the description of a transaction and the proposed treatment in terms of VAT. The recommendation is to conside the VAT Margin Scheme

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VAT on Art Education - eligible bodies and business activities
​

Education is exempt if it is supplied by an eligible body. VATEDU39000 gives guidance on the types of organisation that are eligible bodies for the purpose of the VAT Act 1994, Schedule 9, Group 6. You need to know whether a body qualifies as an eligible body before you can go on to establish the liability of the supplies it makes.
​

The critical issues are

• whether or not art education is provided by an eligible body and
  
• whether or not the activity is related to a business - even if the body is eligible

VAT should be charged on

• the supply of teachers employed by Art Schools which are NOT designated as eligible bodies
• all supplies that are not closely related and/or used in courses by eligible bodies

​In broad terms, establishments that don't normally charge for providing education are NOT a business activity and therefore are usually an eligible body.

Eligible bodies which charge for courses for overseas students or students over the age of 19 must charge VAT on those courses

EXEMPT FROM VAT - specific Education activities. These include:

• Art education courses delivered by ‘eligible bodies’ (but not teachers employed by an Art School unless ‘eligible’)
• Private art tuition – including any delivered online

Eligible bodies are:

• - any of the educational institutions listed in VATEDU28000;
• - local authorities;
• - central government bodies, for example, government departments, executive agencies and non-departmental public bodies and NHS bodies;
• - non-profit-making bodies that carry out duties of an essentially public nature similar to those carried out by a local authority or Government Department;
• - non-profit-making organisations that meet certain conditions; or
• - commercial providers of tuition in English as a foreign language - see VATEDU39600.
• Group 6 Item 1 Education, research and vocational training provided by eligible bodies: eligible bodies: how to identify an ‘eligible body’

A supply of education takes place where it is provided by way of business and in return for a consideration. For example, a fee-paying school makes supplies of education.

1. VATEDU26000

The guidance given in VATEDU26000, VATEDU26500, VATEDU27000 and VATEDU27500 will help you to decide whether the particular organisation is making supplies of education in the course or furtherance of business.

REFERENCE - UK Government Guidance

• HMRC internal manual | VAT Education Manual - ​Official  Guidance on resolving questions of VAT liability in the education sector
• VATEDU26500 | Is a business making supplies for consideration?: types of funding for education
• VATEDU26000 | Is a business making supplies for consideration?: is the education a supply for VAT purposes?
• VATEDU39000 | Group 6 Item 1 Education, research and vocational training provided by eligible bodies: eligible bodies: contents
• VATEDU39700 | Group 6 Item 1 Education, research and vocational training provided by eligible bodies: eligible bodies: other organisations
• VATEDU40000 | Group 6 Item 2 Private tuition and tutorial colleges: contents
• VATEDU51200 | Group 6 Item 4 Closely related supplies: meaning of ‘closely related’
• VATEDU51600 | Group 6 Item 4 Closely related supplies: goods and services that are not ‘closely related’ to supplies of education
• VAT Business/Non-Business Manual | HMRC

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VAT on Art Societies ("Clubs and Associations") & Membership Subscriptions
​

Which activities are business activities for VAT purposes
​
Business activities include:
- providing benefits to members in return for membership subscriptions 
- providing benefits to members in return for a separate charge
- making supplies to non-members for a charge
- admission to any premises for a charge
- providing catering, social and other facilities to non-members in return for a charge
​HMRC | Guidance: Clubs and associations' VAT responsibilities (VAT Notice 701/5) ​

​Professional associations
​
A professional association is a body which restricts its membership wholly or mainly to those who hold or are seeking a recognised qualification from it. Membership of the association must be obligatory, or at least customary, for those pursuing a career in that profession.
Clubs and associations' VAT responsibilities (VAT Notice 701/5)

If an organisation provides facilities or advantages to its members in return for a subscription or other consideration, the provision of membership supplies is deemed to be a business activity by section 94(2)(a) of the VAT Act 1994. See VBNB24000.

A critical issue for art societies is what sort of entity they are in legal terms. and how they frame benefits to members. ​

The UK Government makes a distinction between:

• those organisations (e.g. clubs and associations) where making membership supplies is deemed a business activity 
• those which do not have a business activity.

HMRC currently test whether or not a "not for profit" organisation is “in business” on a case-by-case basis. 

MEMBERSHIP SUBSCRIPTIONS

Membership subscriptions can be treated in different ways for VAT. They can be:

• Exempt
  
• Non-business (outside the scope of VAT)
  
• Taxable i.e. subject to standard or zero rat VAT
  
• A mixture of some or all of the above

Subscriptions will be standard rated unless they satisfy the conditions of the exemption.

Subscriptions that can be treated as VAT exempt include those charged by professional bodies, learned societies, trade unions, political parties and philanthropic organisations. 

​This can include "an association, the primary purpose of which is the advancement of a particular branch of knowledge, or the fostering of professional expertise, connected with the past or present professions or employments of its members." (Value Added Tax Act 1994)-

​HOWEVER this raises the issue of the PROFESSIONAL (past and present) occupations of the members paying the subscriptions.  Hobby artists would appear NOT to qualify.

By and large art societies in the UK are NOT "Approved professional organisations and learned societies"

• although a number of leading societies are charitable non-business organisations and hence exempt in relation to their charitable activities
• but NOT in relation to any trading / business activities they engage in. (Charitable bodies usually set up separate trading companies for this purpose - which then transfer profits to the charity)

The membership subscription is exempt from VAT, but with certain exclusions that are always standard-rated.
The following are excluded from the exemption:

- Any supplies that are not referable to the aims of the organisation as set out in its rules, articles of association, constitution etc;

 - The right of admission to any premises, event or performance (for example a conference) for which non-members have to pay;

- Any supplies that are not available without payment other than a membership subscription, that is, which are not provided automatically as part of the membership benefits and for which an additional sum is charged.
​Tax exemptions for membership organisations - are you taking advantage of them? (2012)

REFERENCE: OFFICIAL HMRC GUIDANCE

• Value Added Tax Act 1994 - Subscriptions to Trade unions, Professional and other public interest bodies - definition of which subscriptions are exempt
• HMRC | Guidance: Approved professional organisations and learned societies (Updated 28 September 2018) - identifies all those organisations which are "approved professional organisations" - which are VAT Exempt
• HMRC | Guidance: Clubs and associations' VAT responsibilities (VAT Notice 701/5) - the basic rules of VAT, how they apply to clubs and associations, and how to treat VAT on subscriptions and other payments.
• VBNB24000 | VAT Business and Non-Business activities: deemed business activities
• VBNB60300 | Clubs and associations: UK VAT law on membership supplies by clubs and associations ​

​REFERENCE - Chartered Accountants / expert advisers

• Tax exemptions for membership organisations - are you taking advantage of them? (2012) | Tim Stovold | Kingston Smith (PDF)
• Not for Profit Organisations: VAT Considerations | Grant Thornton (Ireland) (PDF)
• Tax issues for arts organisations made simple | Sayer Vincent - covers
  • VAT background
  • Background to Gift Aid
  • Buying, selling and renting property
  • Cultural admissions
  • Educational activities
  • Fundraising events
  • Supporter schemes
  • Sponsorship 

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VAT re. Charities and Not for Profit Organisations
​

Is a NFP organisation “in business” for VAT purposes? Deciding whether or not your NFP organisation is “in business” is critical to determining the VAT status of any income generated and the entitlement to deduct VAT on costs associated with this income. Such income could arise in the context of trading, fund raising or investment activities of your organisation. 

• Not for Profit Organisations: VAT Considerations | Grant Thornton (Ireland) (PDF)

Charities don’t pay VAT when buying some goods and services.

However a charity must register for VAT with HM Revenue and Customs (HMRC) if VAT taxable turnover is more than £85,000.

SEE VAT for Charities (re UK)

1. Overview
2. What qualifies for VAT relief
3. How to claim VAT relief
4. Charities and VAT registration​

REFERENCE - HMRC Publications

• VAT for Charities | HMRC​

REFERENCE - UK Charities

• VAT and Charities | NCVP Knowhow 

REFERENCE - Irish Tax Manual | Irish Tax and Customs

• VAT and Charities | Irish Tax Manual ​

​REFERENCE - Chartered Accountants / expert advisers

• Not for Profit Organisations: VAT Considerations | Grant Thornton (PDF)

In general, many of the activities carried out by Charities are considered to be either outside the scope of or exempt from, VAT. Charities engaged exclusively in such activities are neither obliged nor entitled to register and account for VAT on their income. In certain circumstances the activities of a charity may be considered to be in competition with commercial traders and the charity may then be required to register and account for VAT on these activities.
Vat and Charities | Irish Tax and Customs (PDF)

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VAT and Art Museums
​

Admission Charges

EXEMPT from VAT:  Admission charges by public authorities or eligible cultural bodies to certain cultural events such as visits to museums, art exhibitions, zoos and performances. 

How VAT applies to Museums and Galleries depends on:

• whether or not the cultural body is defined as eligible (there is a list!)
• whether they are national museums or galleries that make no charges for entry and that are eligible for refunds under the VAT Refund Scheme
• the extent to which activities are categorised under business, educational or charitable purposes.

All business activities by museums and art galleries and public bodies are always vatable.

OFFICIAL VAT NOTICES (UK)

• Exempt VAT Notice 701/47: culture (1.9.11) Admission charges to art exhibitions are exempt (however there are caveats)
• HMRC | VAT Notices 998: VAT refund Scheme for national museums and galleries - This notice applies to national museums or galleries that offer free admission, which are eligible for refunds under VAT refund Scheme. ​

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ADVERT

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VAT and art auctions
​

VAT can vary when charged at auctions depending on:

• whether the art is imported
• whether the dealer operates the Dealers Margin Scheme or not
• whether there is VAT charged on online live auctions

OFFICIAL VAT NOTICES (UK)

• VAT Notice 718/2: the auctioneers' scheme - This notice is about the Auctioneers’ Scheme, which is a variation on the VAT Margin Scheme for second-hand goods, antiques, works of art and collectors’ items. It tells you when you may use the Auctioneers’ Scheme to account for VAT on the supplies you make.
  

REFERENCE:

• Auctioneers and Auction-Sales - Revenue.ie (PDF) - explains how auction sales work in relation to VAT in Ireland
  

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VAT and Commercial Art Galleries
​

VAT on artwork in Gallery Exhibitions and Gallery Sales
​

One aspect of VAT which many artists find confusing is how VAT applies to works sold via a gallery. 

Problems arise because

• Either Galleries and/or the artist do NOT understand VAT (never ever assume a gallery understands VAT)
• and/or don't understand what can be done to reduce the VAT bill and increase the net benefit for artists.

Galleries by the very nature are in the business of showing and selling art - therefore VAT is applicable

• A commercial art gallery or a gallery selling art should be registered for VAT (i.e. if if they are a viable business they should be meeting the registration threshold for turnover).
• This means all artwork sold via the gallery MUST have VAT added to the price.

Questions about VAT tend to revolve around whether the Gallery is

• EITHER acting on behalf of the Principal (the artist) - The Gallery can act in the name of its principal i.e. the artist (as a disclosed agent)
• OR as an undisclosed Agent (of the artist) - The Gallery as an Agent can act in its own name (as an undisclosed agent) .

The VAT treatment of the sales depends on the type of agency applying as described in HMRC’sVAT Notice 700: The VAT Guide at sections

• 22.5 (disclosed agent) and 
• 22.6 (undisclosed agent).

BEFORE entering into a contractual agreement with a gallery

​If an artist is entering into a contractual relationship with a Gallery the artist is recommended to

• get the Gallery to put in writing to the artist EXACTLY how the VAT is dealt with. (eg worked example)
• this creates a record in the event of any dispute.
• plus it provides a written statement that can be checked out independently with somebody who knows how VAT is supposed to work in Galleries (for example HMRC).

REFERENCE: HMRC Government Guidance

VAT Notice 700:

• 22. Supplies made by or through agents: general rules
• 23. Supplies made by or through agents: invoicing arrangements
• 24. EU and international supplies involving UK undisclosed agents
• 25. Supplies made by or through agents: other situations

​

REFERENCE: Other Articles

• Is there a VAT liability when a gallery sells art on behalf of the artist? | Taxation (December 2014) - This relates to an artist renting space from a commercial VAT registered art gallery.
  
  • The gallery does not purchase the artist’s work and is acting as her agent for the sales to the customers.
    
  • The artist paid VAT on the rent but did not intend for VAT to be added to the sale of the artwork
• Taxation - VAT on Paintings A Q&A article about how VAT should be charged and may be avoided.
• VAT Revisited | ArtQuest - this covers
  
  • 'When should galleries charge VAT on sales?' and
    
  • 'When should galleries not charge VAT on sales?' and
    
  • 'What happens if the gallery gets it wrong?'
• VAT on paintings | Taxation Newsletter (7 November 2012) - comments on the vagaries of who owns a painting when an artist sells via a gallery and who has to raise VAT on what

VAT on Exhibitions and Art Fairs
​

Artists and organisers of art exhibitions need to be VERY careful about

• deemed business services relating to exhibitions and art fairs
• admission charges to exhibitions and whether or not they count for VAT or can be exempted or be charged at a reduced rate.
• VAT on art supplied by international artists (see VAT
  ​re. Cross-border supplies and sales of Art
  and Distance Selling of Art below)

REFERENCE:

• Admission charges to cultural events (VAT Notice 701/47) | HMRC - This notice explains when admission charges to certain cultural exhibitions and events can be exempted from VAT, and by whom. It also covers the exemption of fund raising events by certain cultural bodies.
• Events, Exhibitions and Conferences - Admission to events, exhibitions and conferences in the EU is subject to VAT in the country where the event takes place.. Relevant business services are admission, stand rental and catering services.

VAT and Online Galleries
​

The situation of online galleries will revolve around:

• whether or not they meet the VAT registration threshold on the basis of their annual turnover.
• whether the online gallery acts as Principal or Agent for any sale
• whether the artists are registered for VAT
• whether they are using a VAT Margin Scheme - see above

REFERENCE: 

• VAT for (Online) Galleries | UK Business Forums - note that this is a Forum Q&A which means it is not definitive - but also that the person asking the question has had conflicting advice from HMRC. The question revolves around the galleries role as Principal or Agent (i.e. they don't see the artwork but they do handle the sale)

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VAT
​re. Cross-border supplies and sales of Art
and Distance Selling of Art
​

From 1 December 2012, if you make any taxable supplies in the UK, you must register for VAT here, and account for any UK VAT to HMRC.

If you supply or sell art and trade across borders you will want to avoid major TAX BILLS AND FINES for not following the relevant rules on VAT.

This affects:

• artists living outside the EU who want to exhibit and sell their art in countries the EU
• all artists selling to buyers based in the EU
• galleries showing/selling art by Non-established taxable persons (NETPs) e.g. international artists who do not live in the EU who are importing art for exhibitions in the EU;
• galleries selling to buyers living in the EU and/or other countries
• those living outside the EU and paying VAT on art bought in the EU

You need to:

• be registered in all countries where VAT registration is relevant to your business activities
• find out about proof to keep and forms to complete.
• ensure you complete all VAT returns accurately for all relevant countries in line with reporting deadlines
• be mindful of all the various distance selling thresholds for business that is not conducted face to face and how these apply to cross-border sales

PLACE OF SUPPLY: 
​The crucial issue is the place of supply principle.
​

What ‘place of supply’ means
The place of supply is the place where a supply is made and where VAT may be charged and paid.

With services, deciding the place of supply can be complicated. There are various rules that apply, depending on:
- whether you have more than 1 business location
- the kind of service you provide
- the place where your business or your business customer ‘belongs’

Definition of 'Place of Supply' | VAT: how to work out your place of supply of services

Since 1 December 2012, the standard UK registration threshold has not been available to non-established taxable persons (NETPs). If you’re an NETP, you must register for VAT if you make any taxable supplies in the UK.​​

• ​VAT Notice 700/1: supplement

REFERENCE:
Government Guidance -  non-established taxable persons (NETPs)​​

• VAT Guide 700 - 6.2.3 Supplies by NETPs - defines who should register and why
• VAT Notice 700/1: should I be registered for VAT? - Further information about NETPs, relevant supplies and the meaning of business establishment and predecessor for these purposes
• ​VAT Notice 700/1: supplement (Updated 9 June 2021)

Government Guidance - Taxable Supplies / Place of Supply

• ​VAT Place of Supply (Goods) - 12 April 2016 | HMRC internal manual - Guidance on the place of supply of goods and its impact on the scope of VAT
• Including Which country's VAT rules to use when charging VAT on services
• VAT: exports, dispatches and supplying goods abroad | HMRC - VAT may be due if you sell, supply or transfer goods out of the UK. 
• VAT: how to work out your place of supply of services | HMRC - Understand the ‘place of supply’ and which country’s VAT rules to use when supplying services abroad.
• VAT Notice 704: VAT retail exports - relates to whether or not you have to charge VAT to people who do not live in the EU
• Tax on Shopping and Services - How to get a VAT Refund | GOV.UK - Not all retailers offer tax-free shopping and you can only get VAT refunds for goods bought within the last 3 months.

​REFERENCE: EU Guidance

• You can look up the different duty rates on importing art across many different countries - ​COM(2016) 320 final - Communication "A comprehensive approach to stimulating cross-border e-Commerce for Europe's citizens and businesses"  (435 KB)​

REFERENCE: Professional advice on VAT and cross-border sales
​
DISCLAIMER: Various people will purport to offer advice. You need to get references and/or check out all advisers if you intend to seek and pay for advice. What follows is for information only and does not constitute a recommendation

• Accordance - integrated VAT compliance and consulting services for trading across borders
• Accordance - EU Country VAT Profile Guides
• Accordance - Ecoomerce Distance Selling VAT Registration Thresholds
• Accordance - eCommerce VAT Guide 

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Distance Selling
​

Distance selling is the term used to describes supplies of goods from one Member State to a person in another Member State where

• - the customer is not registered for VAT, and
• - the supplier is responsible for delivery of the goods.

The recipients of distance sales will mainly be private individuals, but they can also include small unregistered businesses, businesses making only exempt supplies, charities and public bodies.

​Definition of Distance Selling | VAT Place of Supply (Goods)

DISTANCE SELLING - ACROSS BORDERS

In addition, if trade is done through distance selling (e-Commerce) then the (lower) Distance Selling VAT Registration Thresholds apply - which are usually different and lower than normal VAT Thresholds.

If the distance selling relates to digital goods and services relating to art then 

• the VAT threshold is ZERO 
• AND you have to register for VAT in the place where the customer lives (See VAT and Digital Supplies)

​

GEO-BLOCKING - FUTURE CHANGE IN THE EU

​In May 2016, the EU made a number of proposals about how it was going to tackle e-commerce within the EU and methods used for geo-blocking of transactions between different countries

REFERENCE: Other Articles

• VAT and Art {or how NOT to get on the wrong side of the VAT man} | Artonomy - discusses some important VAT issues facing artists and art businesses when selling art across international borders and highlights the need to stay on top of the paperwork

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VAT for Organisations, Exhibitions & Competitions
​

If you are a Non-Established Taxable Person (NETP), you must register for VAT in the UK and start to charge VAT if you make any taxable supplies here. For further information on NETPs see paragraph 6.2.3.
VAT Notice 700 -  The VAT Guide

OPEN EXHIBITIONS AND ART COMPETITIONS

Organisers of open exhibitions and art competitions accepting entries from artists who do not live or work in the country hosting the exhibition need to be fully conversant with the workings of VAT in relation to:

• import of art
• sale of art

[ NOTE: I THINK this applies irrespective of their status in relation to other matters relating to VAT. If in doubt seek professional advice. ]
 
VAT arrangements for those sending artwork to the UK for exhibition or a competition changed in December 2012

Those international artists defined as a Non-Established Taxable Person (NETP) now have to register for VAT and charge VAT if they make any supplies here.

This in turn changed the arrangements made by competition organisers for artwork received from international artists (people who don't live or work here for tax purposes) for exhibitions or art competitions.

REFERENCE:

​VAT Information (International Artists) (PDF) - notes for artists applying to exhibit at the Summer Exhibition of the Royal Academy of Art

VAT for non-UK artists and UK exhibition organisers | Making A Mark - This post provides an introduction to recent changes in Value Added Tax and VAT registration for both 

• artists living outside the UK who want to exhibit and sell their art in the UK; and 
• those selling art by overseas artists in the UK i.e. the managers of art galleries and art fairs, the Executive Committees of Art Societies and the organisers of Art Competitions.

If you are not normally resident in the UK, you must have a UK VAT registration number before your work(s) can be submitted. You must provide your UK VAT number when you submit.

• If you are not a UK resident and your work is sold at the exhibition you have a responsibility to register and account for UK VAT with H.M. Revenue & Customs at www.hmrc.gov.uk (HM Revenue & Customs Reference: Notice 700/1)
• Mall Galleries Notice to International Artists on all "Calls for Entries"

REFERENCE: Non-Established Taxable Person (NETP) and/or refunds - Government Guidance

• VAT Guide 700 - 6.2.3 Supplies by NETPs - defines who should register and why
• VAT Notice 700/1: should I be registered for VAT? - Further information about NETPs, relevant supplies and the meaning of business establishment and predecessor for these purposes
• ​VAT Notice 700/1: supplement
• ​VAT Notice 723A: refunds of VAT in the European Community for EC and non-EC businesses gives further information about the refund scheme.

Please address any questions you may have to

• the VAT Helpline on tel. no. 0845 010 9000
• or, if your call is from outside the UK, +44 2920501 261

REFERENCE: Articles by art organisations and societies

• Guidance and information for exhibitors who do not live in the UK or do not have a base in the UK - (Non-established taxable persons): Effect of the removal of the VAT (Value Added Tax) threshold | Society of Botanical Artists

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VAT and Digital Art Services and Art Supplies
​

THIS SECTION IS CURRENTLY BEING REVISED

DUE TO THE SCRAPPING OF
​VAT ON DIGITAL PUBLICATIONS
​ON 1 MAY 2020
​

Note: This is a very brief summary and will be expanded in future to clarify further what the implications of the change in rules are. ​See some of the official publications above.

Recently EU governments have expressed concern about multinational companies that choose to locate in specific countries so as to avoid paying tax on their trading in other EU countries. 
As a result changes were made to the VAT rules - and were implemented in the UK on 1 January 2015. 

This section considers key points followed by references to documents published by H.M. Revenue & Customs and articles and other publications providing information and advice

For UK businesses making cross-border supplies where the place of supply is another EU member state, there is no registration threshold and VAT is charged at the rate due in the consumer’s country.
Register for the VAT Mini One Stop Shop scheme

KEY POINTS:

All products supplied digitally (e.g. e-books, digital images; digital magazines ) are:

• now rated for VAT based on the place of consumption (i.e. where the buyer lives) 
• NOT on the place of supply (i.e. where the retailer is located for tax purposes). 

​
This now means that ALL retailers of digital products have to register for tax in all the countries that they supply to - irrespective of whether or not they meet the threshold for VAT in this country.  Unless they can find a third party to deal through who will also deal with all the VAT.

Guidance on what you need to consider when deciding whether your activity is ‘business’ is in the VAT Business/Non-Business Manual.

VAT chargeable Services within the European Union definition include the following:

• E-books (e.g. Amazon Kindle)
• Download and streaming videos
• Cloud computing, including software provided as a service (‘SaaS’)
• Streaming television
• Broadcast television and radio

Some may be surprised by what is and is not deemed a digital service - and therefore vattable (Source: VAT rules for supplies of digital services to consumers in the EU)

If your business turnover is below the UK VAT threshold
If you’re in business but your turnover is below the UK VAT threshold you’ll need to:

• register for VAT before you can register for Union VAT MOSS
• enter ‘Digital Services’ and select ‘Supplies of Digital Services (below UK VAT threshold) under VAT MOSS arrangements’ - when asked to search for a business activity as part of VAT registration

If you only register for UK VAT so you can use the VAT MOSS scheme, you’ll only need to submit nil VAT Returns.

​How does VAT apply to digital goods and services?
VAT: supplying digital services to private consumers (129 December 2014 | updated March 2015) - Changes to the place of supply rules for digital services

• See also the section later on this page

What's the VAT Mini One-Stop Shop?

• VAT Mini One Stop Shop - flowchart - an attempt to make the relationships between supplier and consumer clearer - in the context of the VAT Mini One Stop Shop (MOSS)
• Register for the VAT Mini One Stop Shop scheme Published 1 October 2014; updated 20 March 2015 AND 11 June 2015 Last updated 16 January 2018 — see all updates How to register and use the VAT Mini One Stop Shop (VAT MOSS) to report and pay VAT due on sales of digital services to consumers in the EU.

​NOTE: From 1st Jan 2015 registration to the VAT ON E-SERVICES site was suspended

Sales not affected by these rules
Using the internet, or some electronic means of communication, just to communicate or facilitate trading does not always mean that a business is supplying e-services. Using the internet for the following does not count:
- supplies of goods, where the order and processing is done electronically
- supplies of physical books, newsletters, newspapers or journals
- services of lawyers and financial consultants who advise clients through email
- booking services or tickets to entertainment events, hotel accommodation or car hire
- educational or professional courses, where the content is delivered by a teacher over the internet or an electronic - - network (in other words, using a remote link)
- offline physical repair services of computer equipment
- advertising services in newspapers, on posters and on television
VAT rules for supplies of digital services to consumers in the EU

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REFERENCE: Digital Supplies and HMRC Publications
​

Unless you sell digital services entirely through digital platforms or marketplaces, who take on responsibility for accounting for the VAT due, you must consider how you intend to account for VAT on supplies of digital services to consumers.
VAT rules for supplies of digital services to consumers in the EU

VAT on Digital Services in the EU - The history of updates is as follows:

• 19 November 2018 - The guidance has been updated with new information about invoicing, leaving the scheme and which VAT MOSS Return to use to declare VAT.
• 16 January 2018 - This guidance now includes a 'Get help' section.
• 12 April 2016 - Updates to the content under the VAT groups heading.
• 18 January 2016 - Small amendments to content under the 'Overview' and 'If your business turnover is below the UK VAT threshold' headings. This is to clarify that some people may not be classed as being 'in business' for the purposes of VAT MOSS.
• 11 June 2015 - Updated to incorporate information about correcting VAT MOSS returns.
• 20 March 2015 - How to complete VAT MOSS Returns and how to pay VAT MOSS bill.
• 19 December 2014 - This guidance has been updated to incorporate information for micro businesses interested in registering for VAT MOSS.
• 1 October 2014 - First published.

VAT on sales of digital services in the EU (VAT MOSS) Published 1 February 2016
​This collection brings together guidance and forms about VAT on the supply of digital services and the VAT Mini One Stop Shop (VAT MOSS).
Contents

1. VAT MOSS rules and guidance
2. VAT MOSS Returns
3. HMRC Online Services
4. Exchange rates

Register for the VAT Mini One Stop Shop scheme Published 1 October 2014 | Last updated 19 November 201 - 
CONTENTS

1. Overview
2. How the VAT MOSS scheme works
3. How to register
4. If you want to leave the scheme
5. VAT MOSS Returns
6. How to pay your VAT MOSS bill
7. Records you need to keep
8. How to reclaim VAT on business expenses and purchases
9. Audit and penalties
10. Get help

Guidance - VAT: businesses supplying digital services to private consumers - Published 19 December 2014 | Last updated 19 November 2018
This explains the changes to the place of supply rules for digital services
​CONTENTS

1. How to determine the place of supply and taxation
2. Businesses established in the UK
3. Businesses established outside the EU
4. VAT accounting options for UK businesses supplying digital services to consumers
5. VAT accounting options for non-EU businesses supplying digital services to EU consumers
6. Defining digital services
7. Sales not affected by these rules
8. Defining ‘electronically supplied’
9. Bundled or multiple supplies
10. How to determine whether the customer is in business (a taxable person) or is a private consumer
11. How to determine the location of the consumer
12. Support for VAT MOSS registered micro-businesses
13. Place of supply of educational services
14. VAT rates and obligations in other EU member states
15. Digital portals, platforms, gateways and marketplaces

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REFERENCE: Digital Supplies and eCommerce Platforms
​

It's in the interests of ecommerce platforms to make it easy for clients to deal with the digital product VAT changes - and some have.

Bottom line - if the e-commerce platforms are to keep their customers they need to ensure that those using their service can be compliant with the rules for charging VAT for digital products sold in the EU

That's not to say all are - and you need to check this!

If you're selling digital goods to customers in the EU, you should charge VAT based on your customers' locations.

It's your responsibility to make sure that you comply fully with tax laws wherever your business operates. You should familiarize yourself with EU VAT rules as they apply to you.
Shopify

REFERENCE: VAT Advice from E-commerce sites

Here's what they have to say on the topic:
Etsy

• How VAT works on Etsy
• Digital VAT on Etsy - Etsy provides a simple way to collect and remit digital VAT from customers in different countries. Cites examples of digital products - E-books; Digital patterns; Downloadable PDFs

Shopify

• Shopify: Charging VAT in the EU for digital goods - Useful summary of how the VAT rules apply and how to use the Shopify site to ensure compliance. Shopify is software used by independent retailers to set up an  e-commerce shop on their websites to process online sales, manage inventory/product listings and process payments

Create

• Create: EU Digital Services VAT FAQ The 2015 change to legislation only affects sellers whose customers purchase digital products or services within the EU. Create users who have the 'Downloadable Products' facility enabled on their account and are actively selling digital products must observe these laws.
• Create: How To Comply With 'EU Digital Services VAT' Rules - Create offer a FREE feature within your account to calculate the customer’s VAT rate based upon their resident state for all digital products (downloadable products). 

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REFERENCE: Advice from accountants & tax advisors

• Ernst and Young: Overview of EU VAT changes for digital products and
  services in 2015 - (pdf) - a campaign brochure for the services of a leading accountancy firm provides clearly structured advice to suppliers of digital goods anywhere in the world
  
• Digitalising VAT | Tax Adviser Magazine (1 October 2015) - The completion of the digital single market is cited as one of 10 political priorities for the European Commission. Within its strategy to achieve this, announced on 6 May, three core strands have been identified
  

REFERENCE: Other sources of advice and information about VAT, digital products and place of supply

• EU - VAT - run by Rachel Andrew on GitHub - one bookmark for all the information on VAT, digital products, the change of rules and how these affect small businesses
• EU - VAT - FAQs - Updated as matters become clearer
• The horrible implications of the EU VAT "Place of Supply" change | Rachel Andrew -  Uses sample case studies to illustrate how the changes in the rules affect micro-businesses such as artists and musicians
• How small companies and freelancers can deal with the VATMOSS EU VAT changes | Rachel Andrew -  these are the basics of what small business and freelancers need to know.
• VAT MOSS: the facts - updated with new info from the UK government | Digital Arts Magazine - In a document published in December 2014, the government issued a document offering clarification to who and what is affected by the new laws.
• VAT changes are a mere nuisance for huge retailers, but a real blow to self-published authors | The Guardian - The closure of the loophole whereby Amazon routed EU online sales through Luxembourg has had an unintended negative effect on writers
  

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DISCLAIMER

• I'm not a professionally qualified expert in this area.
• However everybody has to start somewhere and the aim of this website is to get you thinking about the right questions to think about and ask if and when you need to get professional advice.
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