The times they are a-changin’

Beginning January 1, 2015 the European Union (EU) VAT (value added tax) rules are changing to require sellers of electronic goods – which includes knitting pattern PDFs – to collect VAT based on the purchaser’s country and to submit those taxes as appropriate to the 28 member states of the EU.

Each of those 28 countries has their own set of rules as to the % VAT that is charged on particular items. Each purchase needs 2 non-conflicting pieces of evidence as proof of the purchaser’s location and that supporting data needs to be stored for 10 years. For micro-businesses this is a nightmare of administration.

There’s a good summary in thisย Knitty article, and huge chatter on Twitter and other forums. Applying rules that are meant to stop huge companies like Amazon and iTunes from sheltering in EU tax havens to micro- and nano-businesses makes no economic sense.

Ravelry has been spectacular at helping designer out by providing some options – a lot of work for them on such short notice! My admiration for these folks never ceases!! I am opting, as of January 1, 2015, to route all EU sales through LoveKnitting.com who will take care of the VAT collection and submissions. EU purchasers will still be able to store these patterns in their Ravelry library so I think it’s the best solution for me and my buyers. The sad part is that EU purchasers will have to pay more for their knitting patterns as of January 1, 2015 because the VAT rate for their country will be added to the pattern price on LoveKnitting.com. For this I am sorry but I really see no other solution.

As of this writing, Craftsy appears not to be offering any solutions for pattern sellers; therefore, effective January 1, 2015 Impeccable Knits patterns will no longer be available on Craftsy. This saddens me but I really see no other options.

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