Jean Galea

Health, Wealth, Relationships, Wisdom

Affiliate Income and EU MOSS VAT Treatment/Rules

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All businesses that are selling digital products in the EU are affected by the MOSS legislation regarding VAT payments.

The Mini One Stop Shop (MOSS) came into force on 1 January 2015 and allows taxable persons supplying telecommunication services, television and radio broadcasting services and electronically supplied services to non-taxable persons in Member States in which they do not have an establishment to account for the VAT due on those supplies via a web-portal in the Member State in which they are identified.

This scheme is optional, and is a simplification measure following the change to the VAT place of supply rules, in that the supply takes place in the Member State of the customer, and not the Member State of the supplier. This scheme allows these taxable persons to avoid registering in each Member State of consumption. The mini One Stop Shop mirrors the scheme in place until 2015 for supplies of electronically supplied services to non-taxable persons by suppliers not established in the European Union.

In practice, under the scheme, a taxable person that is registered for the Mini One Stop Shop in a Member State (the Member State of Identification) electronically submits quarterly mini One Stop Shop VAT returns detailing supplies of telecommunications, broadcasting and electronically supplied services to non-taxable persons in other Member States (the Member State(s) of consumption), along with the VAT due. These returns, along with the VAT paid, are then transmitted by the Member State of Identification to the corresponding Member States of consumption via a secure communications network.

The Mini One Stop Shop VAT returns are additional to the VAT returns a taxable person renders to its Member State under its domestic VAT obligations.

The Mini One Stop Shop is available to taxable persons who are established in the EU (the Union scheme), as well as taxable persons which are not established within the EU (the nonUnion scheme). Without the mini One Stop Shop, the supplier would be required to register in each Member State in which he supplies services to his customers.

The Mini One Stop Shop scheme is optional for taxable persons. However, in choosing to use the mini One Stop Shop the taxable person must apply the scheme in all relevant Member States. It is not an optional scheme on an individual Member State basis.

More information about the new legislation can be found in this PDF document.

Also the following:

What is a digital product?

The European Commission has four criteria that will determine whether something is a digital product:

  • It is not a physical, tangible good.
  • It’s essentially based on IT. The offering could not exist without technology.
  • It’s provided via the Internet or an electronic network.
  • It’s fully automated or involves minimal human intervention.

You’re probably consuming and using digital products all day long, whether or not you realize it. Here are some common ones on the market today:

  • E-books, images, movies, and videos, whether buying a copy from Shopify or using a service like Netflix. In tax language, these products are in a category usually called, “Audio, visual, or audio-visual products.”
  • Downloadable and streaming music, whether buying an MP3 or using a service like SoundCloud or Spotify. Of course, these products also fall in the audio category.
  • Cloud-based software and as-a-Service products, such as Software-as-a-Service (SaaS), Platform-as-a-Service (PaaS), and Infrastructure-as-a-Service (IaaS).
  • Websites, site hosting services, and internet service providers.
  • Online ads and affiliate marketing. Income from these services can be considered taxable under digital tax policies.

Heads up: you might also hear digital goods referred to as “digital services,” “e-goods,” or “e-services.” All of these terms refer to the same thing.

MOSS and Affiliate Payments

If you engage in affiliate marketing and promote other people’s products or services you get a commission for it. The marketer who pays you a commission is your customer. And if this marketer is an EU person, you may have to apply the MOSS VAT rules on these commissions.

Here’s how it works. First of all, affiliate commissions fall under ‘marketing services’. There was initially some debate on whether they are fully automated or not, but it seems that most VAT authorities are classifying it as an automated electronic service, hence falling under MOSS rules.

Here are a few scenarios.

  1. If you are provided with a VAT number, no VAT should be charged, applying reverse charge.
  2. If you receive affiliate income from non-EU, no VAT is charged.
  3. If you receive affiliate income from EU, without VAT number, since this is considered to be fully automated and electronic service, VAT should be charged at the location of the customer, and declared in MOSS.

In a domestic setting, as an affiliate, you would send an invoice to the business, which has to pay a commission to you. The invoice contains the commission amount plus the applicable VAT. The product owner, whose products you promote, then can claim back from tax authorities this VAT amount you invoiced.

Again, if you’re a European-based affiliate, and the company whose products you are promoting is also a VAT-registered business in the EU but in another country compared to yourself, you don’t need to charge them VAT. Both of you have a VAT number and this is a B2B transaction, so the reverse-charge mechanism is used.

Now there is a special case that merits some attention. Some businesses in the UK have revenues that fall below the VAT threshold and will therefore not be required to have a VAT number. This proves problematic to you as an affiliate if you are promoting the products of such a vendor.

Because of all the red tape involved and relative newness of the system, affiliate marketing plugins used by such vendors are not able to handle this new rule. At the end of the month, they will pay your commission without any consideration of VAT. If you contact them about the issue, they might decline your request to pay an extra amount of VAT to you and then to reclaim it from their government. So there is a good chance that you will have to pay it to the product owner’s government, but he will neither pay it to you nor demand it back from his government.

If they can’t modify their affiliate systems to handle this scenario, you might get them to pay you the extra VAT they owe you by generating an invoice yourself (including the VAT due) and sending it to them. Then they will forward you the due VAT amount in addition to the automatic affiliate payment already issued by their systems.

A common question among affiliates in Europe concerns the VAT MOSS rules and how they apply to affiliate income.

If you are a business providing affiliate marketing services to another European registered company that has a VAT number, there is no change. Since both are companies and both have a VAT number, there is no VAT charged in this B2B transaction.

The major doubt arises when you have companies or freelancers who are below the threshold for VAT registration in countries like the UK, so they don’t have a VAT number. If you are providing affiliate services to these companies or freelancers, you will need to charge VAT to them.

This can be quite annoying as many affiliate systems automatically pay affiliates every month, and they don’t have functionality for MOSS VAT built-in. So what you will need to do is inform the company that you will be issuing a monthly invoice to them with the VAT added on top of the referral income they owe you. They should not have any problem with this arrangement since that is what the law necessitates. If you don’t invoice them and obtain payment, you will be liable to pay the VAT yourself, which is not a good situation.

Now the second question relates to what VAT rate to use when charging advertisers. The answer is that you should use the VAT rate of the country where the advertiser is based. Hence we are using the MOSS VAT rules because affiliate income is classified as an automated digital service.

Hence if you are a Spanish affiliate for a UK-based product seller, and this UK seller does not have a VAT number, you need to charge him UK VAT at the end of the month when you obtain your affiliate payout. Then, you will need to declare the amount collected on your MOSS statement.

Preparing Invoices

Invoicing for affiliates can be a bit tricky. Affiliates themselves don’t usually invoice the product owners. As a blog owner, for example, you can be signed up to over 200 affiliate programs, so creating invoices every month for small amounts would be ridiculously time-consuming. I

Instead, what happens is that affiliate network platforms such as Shareasale, automatically create invoices for the product owners on behalf of the affiliates. That satisfies accounting requirements without adding overheads to the affiliates. It is important that the product owners obtain all the relevant details from their affiliates as this info will be automatically inserted into the invoices, which are a legal obligation to have in all jurisdictions in Europe as far as I know.

Computers, Consoles, Games and How They Shaped My Future

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Since early on in my childhood, I’ve had electronic toys and computers to play with. My parents were very avant-garde in this area, although none of them had any involvement in the technology sector. As I’m never short on ideas and interests to pursue, I’ve lately decided to dedicate one theme for side projects each month. This month’s project was gaming and retro computing.

The first step was to look back in my archives and try to remember all the computer games I played as well as the systems I owned over the years. Digging in my drawers and cupboards I managed to unearth most of them; luckily the vast majority are still in excellent condition.

Each machine or device I found took me on a trip back in time and I couldn’t resist switching them back on after so many years and spending some time on each. It’s amazing how skills can lie dormant in us for many years but can then be re-activated instantly once the appropriate trigger is pressed. As I switched on each console or game, all the commands and history of each game rushed back into my mind and it was like no time had passed at all. Pretty powerful and amazing stuff indeed.

That got me into a deeper mood as I reflected on the influence that these games and devices had on me while I was growing up. I’d say the most intensive of my gaming days was between the ages of 6-13.

To give some context I’m going to proceed in listing the various devices I used or had access to, as well as some of the best games for each. This is going to be a personal post but perhaps it will also rekindle some fond memories of others in my age group.

[Read more…]

The Best Padel YouTube Video Tutorial Channels

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If you want to improve at padel, the best way to do so is to get a private padel coach and have regular lessons, play as many matches as you can and also make sure you are at peak fitness. However, when we’re not training and resting our bodies, we can still continue improving at padel by watching matches and tutorials on YouTube.

Here are the best YouTube and Vimeo padel tutorial channels:

Rafa Galvez Padel

Rafa Galvez is a padel coach with many years of experience. He started off as a tennis coach and later moved on to padel. He has some excellent video analysis of WPT matches, as well as a very nice collection of fitness for padel videos.

Manu Martin – Mejora Tu Padel

Probably the hottest padel channel at the moment, Manu combines padel tips with shots from his life and that makes it very interesting. Manu is the coach of the popular Alejandra Salazar and also Gaby Reca.

Paquito Navarro – DaleCandelaTV

Paquito Navarro needs no introduction, he is currently the no.1 ranked Spanish player in the World Padel Tour. He’s also a very friendly and funny person, and this character shines through in his padel videos. In every video he teaches us a new shot. I find these videos to be really entertaining and great if you want to learn how to hit the ball from a padel champion.

Rodrigo Ovide – Herbalife Padel Tutorials

Herbalife is one of the main sponsors of World Padel Tour and they have created a series of videos explaining the main padel shots. Rodrigo Ovide, one of the most well known padel coaches, is the one who explains the technique in these videos.

Miguel Sciorilli – Arena Entrena Padel

Miguel Sciorilli is another very well known coach, he was the trainer of padel number one Fernando Belasteguin for many years.

Hugo Cases

Another padel coach that has created a series of good videos to learn the basics in his YouTube channel.

Mauri Andrini – Hello Padel

Mauri Andrini teaches us the basic steps and positions in padel. The best thing about these videos is that they are in English and are very well produced.

Padel Trainer

This is probably the best padel channel in the English language. They also sell a padel course on Vimeo, so make sure you check this channel out if you don’t understand Spanish.

I also found this hour long padel theory talk which is very interesting too, and again it’s from the Padel Trainer guys and presented in English.

Unfortunately most padel YouTube tutorial videos are in Spanish, so you’re out of luck if you can’t understand a word. On the other hand, it’s a great incentive for you to learn Spanish, which is a very useful language to know. As we have also seen, there are also some new channels that teach padel in English, and I’m sure we’ll be seeing more channels in English as padel continues to expand throughout Europe and the United States.

Do you have any other favourite padel channels that I missed? Let me know in the comments section.

How to Add an Overgrip to a Padel Racket

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The grip of a padel racket is very important part of our padel equipment collection for obvious reasons. Having a bad grip can cause us to lose the feel of the racket or have it move around too much in our hands while hitting shots.

A good grip has the following characteristics:

  • Comfortable fit according to the size of your hand and personal preference.
  • Absorbs shocks when hitting the ball.
  • Absorbs sweat well.

The best grips are the white ones. Many people prefer the colored ones as they might match the racket’s color scheme better, however you should know that since the non-white grips are injected with ink, they lose some of their porosity and hence they don’t absorb sweat that well. The end result will be more slipping of the grip causing a lack of confidence with your racket and more mistaken shots.

There are two types of grips: the grip and the overgrip. The undergrip has a sticky side and every racket comes with one installed. Most players just add overgrips over the undergrips to suit their palm size. Some players prefer to change the undergrip itself and install one they like better. A famous example is Paquito Navarro who only uses the undergrip on his racket, without any overgrip.

Other players can add up to 5 overgrips, especially if they are battling injuries such as tennis elbow. Each overgrip reduces vibrations a bit more, so it will help players that have this issue. However each overgrip also lessens the feeling that you have with the racket, so you need to balance the pros and cons and see what you like best. I can tell you from experience that even having one extra grip can alter your play negatively in a significant way as you won’t feel as confident hitting the ball, resulting in many more mistakes. I tend to use a grip with two thin overgrips or one thin and one thick overgrip. I have quite a big hand. The general rule is that when you wrap your fingers around the handle there should be extra space to fit a finger between the top fingers and the bottom of your palm. Of course, this is just a general rule; use whatever you feel most comfortable with.

Let’s take a look at some videos on how to install grips.

First up is this video from Paddelea showing the most common way of installing overgrips:

Second up is Mati Diaz, who installs his grip in a peculiar way. He installs it the other way round to the most common way of installing it:

Next up is Paquito Navarro, who, as mentioned earlier, removes his undergrip and replaces it with one of his preference. He does not add any overgrip as he prefers having maximum feel of the racket’s handle.

Grips typically cost between one and four euro, and the professionals tend to change grips every game. Amateurs can change it every few games, depending on how much their palms sweat. You can also buy gels or powders to reduce sweating in your hands and does prolong the life of your grips.

🏠 Planet Home Review 2024 – How I Invest in German Real Estate

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In this article, I will tell you why I chose to invest in the German real estate market, specifically through the Planet Home platform.

The German real estate market has been on a boom for a number of years now, so I decided to investigate the situation and see whether it’s potentially a good investment.

It turns out that German cities have statistically been Europe’s most highly favored real estate investment for the past few years, as investors seek out well-performing safe-haven assets.

Berlin, Hamburg, Frankfurt and Munich represent four of the top five European markets for real estate investment and development; the other being Dublin.

Recent data from Real Capital Analytics confirms that Germany has overtaken the UK in post-EU-referendum investment volumes. Although London remains Europe’s primary market for global capital – it has fallen in the city rankings for investment and development prospects.

Since the Brexit vote, Germany has enjoyed a pick-up in interest. Meanwhile, real estate investment trusts in Germany and Scandinavia have risen since the Brexit vote to trade at premiums to the value of their assets, a sign that investors feel their cash is safer there.

With more than 80 million people, Germany is Europe’s highest populated country. It boasts Europe’s strongest economy, which is now the fourth largest in the world, and has approximately 42.8 million people in employment.

Factor in that Germany has one of the most productive economies in the world and a booming export market and it becomes understandable as to why its property market attracts large amounts of international capital. A total of EUR70 billion was invested in the sector, for example, between 2010 and 2015, with Germany attracting nearly half of the capital invested in Europe’s residential property sector.

The German Real Estate Situation

As I was doing research on the German real estate market, I learned some surprising facts. Apartment viewings often turn into mass events, with 50 or 60 would-be tenants turning up at an appointment.

Many bring application portfolios with detailed information on their earnings, their creditworthiness and their family situation. It can be insanely difficult to find an apartment, and you are still expected to pay a deposit of 2-3 months rent. At least the agency fee is paid by the landlord, which is not the case in Spain, for example. One other curiosity is that most apartments don’t come with a fitted kitchen; you have to install it yourself.

In Hamburg, apartment prices rose by 70 percent between 2010 and 2015. They are expected to surge by another 50 percent by 2030. A three-room flat can cost around $450,000 (400,000 euros) in residential areas close to the city center.

Not all regions have registered rapid property price increases, however. Even in cities like Berlin, Hamburg and Munich, high rental prices in the newbuild segment have not necessarily been matched by high rents in the existing rental property sector.

Secondly, price increases have been driven by population growth, the ongoing trend toward urbanization, and strong economic fundamentals, combined with historically low interest rates. At the same time, Germany’s rental housing sector has seen vacancy rates fall close to zero.

Finally, loan-to-value ratios are typically no more than 75 percent, which underscores the financial soundness of the German market.

Let’s have a look at some of the major cities and how they’re faring. One important rule of real estate investing is that you need to be looking at cities rather than countries in general, as the dynamics can be totally different from one city to another with the same country.

Berlin: Full boom at the moment, with a rapidly growing demographic as more people move into the city from all over Europe given its development in sectors such as technology.

Frankfurt: Another city that is in full swing, it is benefiting from Brexit news and the promise to become the financial centre of Europe in the coming years.

Cologne: Demand exceeds supply in this city, so the forecast is good for investment in the next few years.

Dusseldorf: The luxury property market is getting saturated, but there is still demand for basic housing.

Hamburg: Gentrification is underway in several areas and this is paving the way for further growth in the property market.

Munich: Prices have risen very far and are approaching London territory. Locals find it very hard to keep up with rental prices and are even more priced out when it comes to buying. Rent has not yet risen as much in comparison to purchase prices.

The PB3C website is an excellent source for updated news about the real estate market in Germany, it is worth following.

How to Invest in German Property – The Easy Way

The volume of investment raised by crowd-investing platforms for property developments and redevelopments has been doubling every year and there are no signs of saturation yet.

Planet Home, previously known as iFunded, is the leading property crowdfunding website in Germany. They have a very nice interface and all the information is well presented in German and also in English. They are open to investors all over Europe and signing up is super easy.

To get verified, you will need to download the Deutsche Post app and then arrange for a video chat through the app. A Deutsche Post employee will call you and take a photo of yourself and your passport in order to complete verification. It’s one of the swiftest and most straightforward ways of verification that I’ve encountered so far. In this sense, the platform lives up to the German standards of professionalism and organized way of working.

Planet Home offers two types of investments: bonds and loans.

Bonds belong to the investment class of securities under the German Securities Trading Act (Wertpapierhandelsgesetz, WpHG), in which creditor rights, in particular interest and repayment of the borrowed money, are securitized.

A subordinated loan is a debt to the receiver which ranks below senior loans and is regulated under the provisions of the German Investment Provisions Act (Vermögensanlagengesetz, VermAnlG).

The minimum investment is EUR500 and the maximum is EUR10,000 as a private investor. Returns can be as much as 7% per year, which is excellent when you keep in mind the low risk profile of the German market.

The investment is paid back at the end of the investment term, which varies from project to project but is already determined during the Funding Phase. Interest is either paid during the project in the course of the year or at the end of the term. This depends on the project. The Planet Home platform receives marketing fees from the project developers. These include a one-time fee per project and ongoing fees depending on the duration of the project.

My experience

I have so far invested in two projects on the Planet Home platform, and there were absolutely no problems whatsoever. At the end of the loan period, I received a transfer in my bank account to cover the principal plus interest. I also got an easy-to-understand statement about the transaction that I could then use for presenting my tax returns.

Planet Home is definitely a platform that can be relied upon if you’re looking for a safe investment in German real estate, and I’ll continue investing here for the foreseeable future.

Invest in German real estate through Planet Home

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Jean Galea

Investor | Dad | Global Citizen | Athlete