Patreon and VATMOSS

I’ve been contacted by Heather Burns, one of the people campaigning against the new EU VAT rules on digital services, about the response to the new laws from Patreon. As you may recall, crowdfunding and patronage were two of the relatively new funding sources that the EU and Treasury mandarins completely failed to consider when bringing in the new legislation. As Heather reports, Patreon has decided to ignore the whole thing.

Of course Patreon has no obligation here. They are a US-based organization and they don’t have to collect taxes on behalf of the EU if they don’t want to. Their legal justification for not complying appears to be utter hogwash, but that isn’t really important. What is important is that anyone resident in the EU that wishes to use Patreon is now obliged to register for VAT and do all of the admin themselves. This is very different from, for example, Amazon, who do all of the work for you.

My guess is that many other non-EU platforms will follow Patreon’s lead, which rather makes a mockery of HMRC telling people that it is the platform’s duty to provide the necessary accounting services.

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2 Responses to Patreon and VATMOSS

  1. Thanks Cheryl.

    The US has, of course, imposed an extraterritorial tax law on the entire world (FATCA) and has left governments and banks with no choice but to comply. Very few Americans have heard of the law, but are aghast at extraterritorial taxation being imposed on to them. In that light, Patreon’s stance, like so much of the pseudo-patriotic criticism of VATMOSS coming out of the US, is rather rich.

    Regardless, it’s deeply saddening that the little guys are the casualties in this battle.

    • Cheryl says:

      It has been US policy for some time that all US law applies to the entire world. No one takes much notice of this unless the Americans are in a position to enforce the point.

      I can imagine the sort of comments you have been seeing, because there are quite a few Libertarians in America, and they have some very odd views. However, I don’t think getting patriotic back at them is terribly helpful. As you say, it is the little guys who are the victims, and that’s true on both sides of the Atlantic.

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