Proactive Paul

iPhone app developers and the VAT question!

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VAT law is weird - it talks about “supplies”!

How do you account for VAT?

I’ve had this question a number of times recently. The problem applies to all suppliers of downloadable software, so I’ll give you the general picture, and then at the end, there’s a bit specifically for app developers who get paid by Apple.

You’re in business right? And you’re based in the UK, with a UK VAT number? If you just said “yes and yes” that’s good, read on, otherwise contact a local accountant in your part of the world.

Generally

Selling software is a case of “supplying goods”. They might be intangible goods, but they are goods. CD or download? Doesn’t matter! They are goods!

Writing the code for somebody else’s software is “supplying services” , and more importantly (for VAT purposes) that’s a supply of intellectual services.

In both cases (goods or intellectual services) you need to know where your customer is based, because the rate of VAT depends on their address and their VAT status. I recommend that your sales process includes two questions and requires the customer to answer both of them.

What is your billing address?
If you are based in the EU, what is your VAT number? State “none” if you don’t have an EU VAT number.

Armed with that information, this little flow chart tells you what rate of VAT to charge.

lib-om-vat-of-iphone-apps-201008251

You can check if an EU VAT number is valid by using this facility, it may or may not also give you the name and address. Try my VAT number (without any spaces) 690627612 . . .

http://ec.europa.eu/taxation_customs/vies/

At the time of writing, there are two VAT rates in the UK that you need to consider. The standard rate is currently 17.5%. And the zero rate is 0%. It’s important to say 0% when it’s relevant, because that is an actual VAT rate, and the amount of actual VAT is £0.00. Get it wrong (and use the wrong wording) and you might discover that you cannot reclaim any VAT on your costs!! There is no logic in tax law.

If you cannot establish the address and the VAT status of your customer then you could assume that they are UK resident and then suffer the VAT at the standard rate.

iPhone/iPad developers only

If you’re a UK VAT registered business, and you’re paid by iTunes, then you have just one customer and it is a Luxemourg resident, VAT registered business which is owned by Apple:

iTunes s.à r. l.
8 rue Heinrich Heine
L-1720 Luxembourg
TVA/VAT No.: LU20165772

Yes, Luxembourg is in the EU, and so if you follow the flow chart above, you charge iTunes 0% VAT!

Need a proforma? There’s one here.

Need more help? Call me - details here.

You should follow me on twitter here

Posted on 25 Aug 2010 by Proactive Paul

Posted 1 week, 5 days ago at 6:15 pm.
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Apply a little lubricant

This site is maintained by The Proactive Accountant Dot Com - link to this article directly by using the short URL http://bit.ly/cmsMF1

Use your imagination

I’m working on a new Wiki at the moment, and Benjamin Ellis has given me a useful idea! In a tweet from SXSW - that’s a big conference for geeks (and others), held every year in the USA - Benjamin said:

Now, whilst he was probably thinking in broader terms than I, it made me think a bit more about the nature of the Wikis which I’m running. All of the business ones and the one I have personally.

What are the Wikis for? If not to reduce friction? Anytime I have to tackle something new, like getting a Huawei stick to work on a Mac, I add a new page to the Wiki. That means that the next time I have to do that task, I don’t waste time and energy trying to work out the solution. I simply go and search the Wiki to find the notes that I wrote last time.

In business, areas of friction benefit from a bit of lubricating with a Wiki! We are always trying to make our credit control procedures a little better at Proactive. More effective, more of a regular routine and less of a daunting task! We work on that Wiki page regularly. And today it’s Tuesday, so it’s credit control phone call day. Did you get a statement from us yesterday?

You should follow me on twitter here

Posted on 16 Mar 2010 by Proactive Paul

Posted 5 months, 3 weeks ago at 5:03 am.
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German Engineering

World Affairs on Sunday

For some time now I have been keeping track of my business affairs on a Zoho wiki. It’s a great tool, and it allows me to check procedures and update my “scribble pad” from any computer that has internet access. At least that was true until last weekend. I was planning to do some work on the Wiki last Sunday morning (when things are quiet and there are no distractions) and unfortunately, Zoho had the same idea at the same time. The wiki engine was unavailable for 3 hours. Both my wikis (I also use another Zoho wiki for keeping track of some private matters) were down.

And that scheduled maintenance time made me think. I have a back up of everything on Zoho, but it’s not much use without the engine. What I really need is my own wiki under my own control. Don’t get me wrong, Zoho is great, it has whistles and bells that beat the competition, but they do fiddle around with fine tuning a lot. I just get used to one way of doing something and then it changes.

So the time has come to settle for a simpler offering from a smaller competitor. I have spent hours today working on this and here’s what I have learnt. There are 5 free products on the market which fit my criteria for:

PHP scripts - TXT or MYSQL backend - Access control

Bitweaver - more than just a wiki - a bit too big and complex to be honest
TikiWiki - site unavailable due to a “major revision”
Wikiwig - childish GUI - just didn’t look right
WackoWiki - great potential , but failed at the final installation step - “must be a wikiname” is not explained and I tried everything!
Dokuwiki - it’s simple, it’s effective and it works.

Now, I actually tried out Dokuwiki first, on one of my redundant web sites, and I did not like the syntax that I had to use, especially for tables. So I persevered with the others on my shortlist. All five wikis have had an equal chance, and I decided to implement access controlled wikis from Dokuwiki on two sites - one for business and one for private affairs. And guess what, Dokuwiki comes from Germany. As do many of the reliable goods and services that I buy!

And now that I have my own wiki engine, it will not change, so I will get used to the syntax. It will reside on my web servers, so it won’t go down (at least not for 3 hours in a row) and it is fully under my control. Given those advantages I can learn to live with a missing whistle or missing bell and some new syntax! Sorry Zoho!

Proactive Paul The Proactive Accountant Dot Com

Posted 1 year, 3 months ago at 7:47 pm.
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G20 or G2?

World Affairs on Sunday

The G20 summit came to London this week and apart from some disruption to the traffic, there is little tangible evidence that anything is happening. There is just anecdotal advice about the things that they say they are going to do, and an ever sceptical public is not yet convinced.

However, for the first time, a group of 20 heads of state have met to explore what is to be done about the global financial malaise. What happened to the G7 and the G8? And will the G20 continue to exist? I can name the countries in the G7, but not the G20. I can tell you that the G2 is where the real activity is going to happen. Whether the rest of us like it or not, the G2 will be the domimant players over the next 10 to 20 years. That’s the USA and China.

My local authority sometimes sends me questionairres and consultation documents about developments like roads, new shopping precincts and social housing. I am particularly interested in roads and traffic management. I have in the past been quite vocal on such matters and it has led me precisely nowhere. I believe that local and central goverment in the UK has a different definition of “consultation”, one that says “you can speak now, and then we will implement our plans anyway”. Do I feel sidelined?

There may never be a world summit of the G2 leaders, but I think you will find that the the USA and China will be making the decisions anyway.

Proactive Paul The Proactive Accountant Dot Com

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Proactive Paul

iPhone app developers and the VAT question!

Posted 1 week, 5 days ago at 6:15 pm.
Add a comment

Apply a little lubricant

Posted 5 months, 3 weeks ago at 5:03 am.
Add a comment

German Engineering

Posted 1 year, 3 months ago at 7:47 pm.
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G20 or G2?

Posted 1 year, 5 months ago at 6:30 am.
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Divisions

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Proactive Paul

iPhone app developers and the VAT question!

Posted 1 week, 5 days ago at 6:15 pm. Add a comment

Apply a little lubricant

Posted 5 months, 3 weeks ago at 5:03 am. Add a comment

German Engineering

Posted 1 year, 3 months ago at 7:47 pm. Add a comment

G20 or G2?

Posted 1 year, 5 months ago at 6:30 am. Add a comment

Divisions

Links

Posted 1 week, 5 days ago at 6:15 pm.
Add a comment

Posted 5 months, 3 weeks ago at 5:03 am.
Add a comment

Posted 1 year, 3 months ago at 7:47 pm.
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Posted 1 year, 5 months ago at 6:30 am.
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