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Charity selling products to the EU

If anyone can give any advice on the following I would be very grateful

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I am a volunteer Treasurer at a small charity (CIO).  We produce books and music CDs which can be purchased as physical items or as downloads. The items we produce are of historical interest and we budget to break-even so each product pays for itself.  Some people who buy our products are from the EU.  My question is  -  do we need to pay the EU VAT on our digital downloads?  To emphasis we are very small - we sell perhaps 20 downloads to the EU each year and the items sell for between £4 - £25.   The gov.uk pages seem to suggest we do but all their advice is aimed at businesses whereas we are non-profit making.  I can't find anything specifically about this on the Charity Commisssion website.

Thank you so much for you time and trouble.

Replies (7)

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Scalloway Castle
By scalloway
26th Sep 2021 18:35

Being a not for profit organisation makes absolutely no difference to the VAT sitaution. The same rules apply to a charity as apply to a business.

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By ToffeeGhost
26th Sep 2021 21:06

Thank you so much, that's really helpful to know.

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By jonharris999
27th Sep 2021 06:43

On these kinds of numbers you are way under the threshold for worrying about this.

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By Matrix
27th Sep 2021 07:19

I thought the thresholds were nil.

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By jonharris999
27th Sep 2021 07:31

I'm not an expert here by any means, but it stuck in my mind that if you sell B2C into the EU, then past a certain level you would need to register for VAT in that country, or use the non-EU MOSS if that is still a thing? But there definitely are thresholds for both these things (ooooh - they might be nil in some particular countries, but they aren't nil in others).

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Jason Croke
By Jason Croke
27th Sep 2021 09:18

As Scalloway has posted, even if you are a charity and not for profit, you are selling things for money, so you are "in business".

The sale of physical goods (books/CDs) count towards the VAT registration threshold of £85,000 but doubt you'd get anywhere near that based on your original post. The shipping of these goods into the EU or anywhere in the world are zero rated exports, the customer is responsible for paying any import VAT on the goods when they arrive at the destination.

The sale of digital goods is explained in this link https://www.gov.uk/guidance/the-vat-rules-if-you-supply-digital-services... but in essence, there is a Nil threshold*, so the moment you sell one single download to an EU consumer, you are obliged to register for the "non-Union MOSS" scheme.
Link to EU website here https://ec.europa.eu/taxation_customs/business/vat/telecommunications-br...
*threshold used to €10,000 but since we left the EU that threshold is Nil.

The cost of complying with the Non-Union MOSS rules is likely to be cost prohibitive for your organisation (registration, regular submission of returns, etc) so it may be that you analyse the risk and decide to just sell physical goods or to continue to sell digital services to EU consumers but accept you are not complying with the MOSS rules (many "for profit" businesses didn't bother with MOSS), but as a charity you may have to discuss and minute the risks.

if you are only earning £500 from Eu consumers (£25 per item x 20 times per year) then it may be easier to not to sell to EU consumers (you can sell to rest of world no problem) on the basis the £500 lost can be made up elsewhere through for example, physical sale of goods (books), etc.

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Replying to Jason Croke:
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By ToffeeGhost
27th Sep 2021 12:50

Thank you so so much - that is terrifically helpful and completely answers my question.

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