Low Point, Bandcamp and the new EU VAT Regulations

From 1st January 2015, new regulations will come into place where VAT on digital products sold in the EU will be chargeable in the place of purchase rather than the place of supply.

Whilst the purpose of the new regulations being introduced is to stop large corporations such as Amazon, Apple, etc diverting sales through countries with lower rates of VAT, such as Luxembourg, unfortunately, the knock-on effect means that many thousands of small businesses and sole traders are also subject to the same regulations.

These regulations mean that any digital download sold via the Low Point Bandcamp store will require VAT adding for customers within the EU and traders will then be required by law to pay the added VAT back to the country of source. This would mean registering for VAT via the MOSS (Mini One Stop Shop) which will involve a great deal of paperwork.

These regulations would also mean that for every digital download sold, Low Point would be required to keep the billing address of the customer, the IP address of the device used, the location of the bank, the country code of SIM used by the customer and the location of the customer’s fixed land line through which the service is supplied to them and keep the data for 10 years. As this is a huge undertaking for a record label which is run by one person, Low Point will be unable to conform to these regulations.

With this in mind, from 1st January 2015 Low Point will no longer be selling digital downloads direct via the Low Point Bandcamp store. Please note that sales of physical releases (including the complimentary FREE digital download included with such sales) will be unaffected.

Currently the majority of the Low Point catalogue is available via the bigger digital distributors such as iTunes, etc, as these platforms already take care of VAT payments for us so Low Point will continue to use them, though this does mean that less money is returned to the label and more importantly, the artists themselves.

Meanwhile, Bandcamp have stated that “sometime” in 2015 they will handle VAT payments themselves, so when further clarity from Bandcamp is supplied, the situation will be reassessed.

Please continue to support your local independent record labels and businesses!

Gareth, Low Point 28th December 2014




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