UK Customers can't be sent games by Atariage anymore / European maybe next

[+cubanismo]

I had typed up a long reply about my recent experiences with customs and whatnot, but after re-reading it and inserting a few "not to get political, but..." caveats, I've deleted it all and would instead just like to note this thread is edging closer and closer to being something I'd consider political. Debates over the merits of import fees, governments' abilities to enforce them, etc. are probably best had elsewhere. That said, I sympathize with @Albert and the potential customers across the pond trying to get access to some good homebrew.

[82-T/A]

5 hours ago, x=usr(1536) said:

Essentially, there are four levels of taxation in the US: Federal, State, county, and local (city).  Sales taxes are not applied at the Federal level, only State and below.  A few States have no sales tax, and some cities have no local taxes; it's not completely uniform throughout the country and rates do vary from State to State, county to county, and locale to locale.

 

I love this topic. Let me tell you about the state of Florida!

 

No State income taxes.

No County income taxes.

No City income taxes.

 

6-7% Sales tax (depending on city)

 

No Safety or Emissions inspections on vehicles. My friend found a 1978 Cadillac Eldorado Biarritz on a piece of property he bought, and I cut the roof off of it, and we had it registered and insured the very next day.

 

People like to say... "Oh, it's because of tourism."

 

NOPE. Tourism only accounts for 11% of total sales tax in a good year. It's because of good money management.

 

EDIT, Albert, if you want to move from Austin to South Florida, just let me know! I'll help you pack the U-Haul. Our property tax is half of what it is in Austin. My home in Miami has 2x the value of my home in San Antonio, yet I pay 2x the property taxes on my San Antonio home than I do on my Miami home!

Edited February 18 by 82-T/A

[Thomas Jentzsch]

28 minutes ago, cubanismo said:

like to note this thread is edging closer and closer to being something I'd consider political

Definitely. Even more after your post.

[juansolo]

5 hours ago, tmp said:

i was under impression that USA had $800 duty/tax free limit

It's somewhere up there, if not more. I had it in my head it was $1500. I've sent all sorts to the states and never had any issues.

[Albert]

I have been receiving packages in the US from international destinations for over 20 years and I have never had to pay customs on anything that's come via USPS (which is 99.9% of it).  Last year with DHL I've had to pay some customs administrative fees for two packages coming in from Europe, but that's it.  I even had an entire pallet of game controllers (those Thrust+ foot pedals) shipped from Germany years ago and didn't have to pay any incoming customs on that.

 

 ..Al

[carlsson]

46 minutes ago, 82-T/A said:

I love this topic. Let me tell you about the state of Florida!

 

No State income taxes.

No County income taxes.

No City income taxes.

 

6-7% Sales tax (depending on city)

Aha! Now I know where Will Wright's SimCity actually takes place! Maxis may as well have called it SimFlorida.

[82-T/A]

13 minutes ago, carlsson said:

Aha! Now I know where Will Wright's SimCity actually takes place! Maxis may as well have called it SimFlorida.

 

See... now why did you do this? Now I'm going to be playing Sim City 5 for the entire weekend! I blame you Anders! haha...

[carlsson]

19 hours ago, carlsson said:

I just looked into the customs directory, and it suggests that for video games exported from the USA after November 10, 2020 there will actually be 25% customs as well as 25% VAT?!? All other countries are exempt of this import customs.

For those wondering, I found the source to this.

 

It origins in a dispute about the "trade disrupting" subsidies the US has on (in particular?) Boeing airplanes? According to the WTO, the countries in the European Union have the rights to collect penalty customs fees to a value of 4 billion USD per year until the US has reformed their subsidies. There are total of 142 different categories affected. Airplanes get 15% customs, all other completed goods get 25%. Individual parts that are used to manufacture something within the EU are not affected, from what I understand. Some of the goods that are highlighted are tractors, ketchup, peanuts, tobacco, gym equipment, video games, sweet potatoes, chocolate, rum, handbags, backpacks and some frozen clams.

 

Link in Swedish. I'm sure it has been mentioned on some sites in English as well.

https://www.kommerskollegium.se/om-oss/nyheter/2020/strafftullar-har-inforts-for-varor-fran-usa/

 

Official document in English: https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=OJ:L:2020:373:FULL

 

Time will tell how long it takes for this to change. I suppose the idea is that customers within the EU will seek to import goods from other countries, indirectly harming US companies which are disadvantaged in their export, but in the case there are no alternative manufacturers, it only hurts the EU customers. Sure you can buy peanuts and chocolate from many other countries, but not video games made in the USA unless those first are exported to a middleman country like e.g. Canada and then further exported from there.

[Thomas Jentzsch]

28 minutes ago, carlsson said:

Sure you can buy peanuts and chocolate from many other countries, but not video games made in the USA unless those first are exported to a middleman country like e.g. Canada and then further exported from there.

For a short term (or special niches like Atari retro games) you are right. But if the USA should continue to violate international trade rules, it would help the video game industry in Europe. And maybe even AtariAge might be tempted to move some production to someone in Europe eventually.

[carlsson]

It makes me wonder if it really made the news back in Nov 2020 or if we had too much worries about the pandemic etc to even gather some general interest. At least some of us now know what to expect if we would be ordering something directly from the USA. For a $10 item, an additional $2.50 in customs fees may be possible to swallow but if one would order a $200 item, it would be a rather unwanted surprise to get an extra $50 in fees on top of the mentioned VAT.

 

Also to bring back the discussion to the original topic, I wonder if these customs fees also are supposed to be collected by the overseas seller, or if that only applies to the VAT portion so the local customs agency still would claim extra customs fees directly from the customer even in the case VAT already was paid for.

[Thomas Jentzsch]

3 minutes ago, carlsson said:

...even in the case VAT already was paid for.

Who should have paid the VAT which is owed to the target country? 

[high voltage]

I once send a heavy gaming load from Germany to Norway, it was very, very expensive for the buyer. Norway is not in the EU, so it was to be expected.

Edited February 19 by high voltage

[carlsson]

7 minutes ago, Thomas Jentzsch said:

Who should have paid the VAT which is owed to the target country?

Hm, I'm not sure I understand your question but the origin of this thread is that since January 1, the UK tax authorities demand that overseas sellers collect and remit UK VAT from the customer before sending the goods instead of that the customs in the recipient's country collect those. As noted, almost the same promise will take place for the EU country on July 1, with the small difference that it seems possible to still transfer collecting of VAT to the customs (but probably with even higher handling fees than today, so the customer will get upset at the seller for not collecting it).

 

Now with customs fees on top of VAT, I'm wondering if that also is supposed to be the seller's responsibility to collect and remit. I understand that for some types of goods like cars and clothes, there has all the time been customs fees for goods so for e.g. US companies selling t-shirts world wide, they may already have a system for that but with the new penalty customs fees, it would apply to 142 different categories of goods, pretty much everything that is ready assembled.

[Thomas Jentzsch]

Sorry, I lost track.  

[+jgkspsx]

I am not an expert in such matters but I had read that the 25% rule applies to video game hardware, not software: https://www.nintendolife.com/news/2020/11/watch_out_europe_-_importing_consoles_from_the_u_s_just_got_a_lot_more_expensive

[carlsson]

Hard to tell, IMHO. Perhaps for digital distribution, there are no customs fees as that could be considered a service just as much as it is goods, but for physical games I would doubt that those are excluded vs console hardware. After all they seem to sort under the same code 9504500000 which I recognize from my previous digging into the customs codes. In an analogy, it would be just if there was a penalty on soda streamers, but none on the flavor extract used with the machine. Time will tell who, when and why extra fees are charged.

 

Something else that would be worth checking is if only applies to new goods, or also second hand. When it comes to import VAT, that is applied to second hand stuff too but I've got a feeling that the customs might primarily target newly produced items, at least until I have read any reliable source that says otherwise.

 

Also the Nintendo Life article was posted in November so the lingering question if the UK still are affected by this remains until someone looked it up, if UK after Brexit have sided more with the USA and thus don't bother to collect customs penalties even if the WTO enables them to.

[+jgkspsx]

I would like to see an end to the trade wars. Fingers crossed that won’t take too long.

[82-T/A]

On 2/19/2021 at 6:42 AM, jgkspsx said:

I would like to see an end to the trade wars. Fingers crossed that won’t take too long.

Trade Wars 2021... better than Trade Wars 2002!

[juansolo]

For digital distribution, for something as small scale as AA, just put the ROMs up for sale on the store as US and allow payment by PayPal and let it take care of the currency conversion and what have you. Again, bought plenty of software this way from other countries. I'm sure when you're talking millions of bucks going through your store you'd be looking at doing it with localised stores, but small scale digital apps and games all seem to be done this way.

[+cubanismo]

I've now gone through the process of registering as an organization (Sole Proprietor) for VAT collection with HMRC (Her Majesty's Revenue and Customs), all for what will probably amount to no more than 1000 pounds sterling a year in revenue, so I thought I'd share my experience here in case it helps others. I am not a financial or tax adviser, nor a lawyer, so don't blindly follow anything I've done. It may well be that I've done something wrong. In fact, I've noted below that I almost certainly did.

 

First of all, it is indeed a lot of paperwork, and I haven't even had to file a return or go through the actual shipping paperwork yet, but it's not too bad. It took me about 3 hours on and off while watching a movie, trying to get my kids to stay in bed, and fiddling with it on the side. Probably could have done it in an hour or two if I was focusing on it. It's roughly the same as the amount of online paperwork I went through to register to collect sales tax in California.

 

You'll need the following as an individual/Sole Proprietor from the USA without an organization name:

 

PDF scan of a photo ID (Passport or driver's license)

PDF scan of a mortgage statement or lease agreement

PDF scan of your birth certificate

All the above need to come in below 5MB combined, and for me these came to like 4.95MB, so watch your resolutions and file sizes.

Your social security number

An estimate of how much your UK revenue will be on a yearly basis. No indication this has to be terribly accurate, I think it just drives some of the options available (E.g., if you're under 1.3 million in revenue, you're a small business or something and get some alternate filing options)

The hardest part: The SIC code for your area of business. I think I got this part wrong, and will need to figure out how to change it once my VAT certificate is issued, because the search tools provided as part of the application process are not the best, and the brief one-liner category descriptions aren't elaborated on anywhere on the official site AFAICT. I went with some options under the category for specialty retail gaming stores, but looking at some guides I found later, I believe this specifically excludes video games. Instead, I think I wanted "Code 47410: Retail sale of computers, peripheral units and software in specialised stores", specifically these sub-code categories:

• Computer peripheral equipment (retail)
• Computers and non-customised software (retail)

Non-customised software (Note all the U.K. spellings here) is said to include video games in several guides. However, there are also specific categories for video game consoles, and a bunch of related wholesale and manufacturing video game categories that don't sound right for offering things to end users, so it's not totally clear. If you're doing this with any real amount of revenue, you'd probably want to hire an advisor just to make sure you got this part right. The rest is honestly very straightforward.

 

What I can say in their favor is that the gov.uk group off websites work quite well in general compared to say, the IRS or California tax websites I've had to struggle through in the past. No UI problems or "Please don't refresh this page" messages hanging forever, and everything besides the SIC codes stuff had reasonably clear instructions and help text such that I didn't have to open a giant PDF of instructions in a separate window like I do when filing my US taxes.

 

Hope that helps others decide what to do about this mess at least. You might need other stuff if you register a business with an actual name instead (E.g., AtariAge rather than Albert).

[Machine]

24 minutes ago, cubanismo said:

....

 

You'll need the following as an individual/Sole Proprietor from the USA without an organization name:

 

PDF scan of a photo ID (Passport or driver's license)

PDF scan of a mortgage statement or lease agreement

PDF scan of your birth certificate

All the above need to come in below 5MB combined, and for me these came to like 4.95MB, so watch your resolutions and file sizes.

Your social security number

.........

 

I would hate for any of that info to get out there.....

[+cubanismo]

Quick follow-up on going through the process:

 

The online form was not the end of it. HMRC contacted me for follow-up information. Much of what they wanted to know (E.g., how many distributors I'm working with in the U.K. and Europe to manage my inventory, details of my shipping agents, etc.) was entirely irrelevant given my prior answers (I had already indicated I won't be using any of that), but I obliged them and filled it all out.

 

Additionally, they wanted me to provide evidence I intend to trade or am currently trading with the U.K. This seems bizarre. Wasn't applying to trade with the U.K. enough evidence of that? Are they being overwhelmed by people going through this process for the fun of it?

 

At any rate, if you're following along, you can add another 2 hours of paperwork to the above 2-3 hours.

[Albert]

On 2/23/2021 at 11:08 AM, cubanismo said:

Hope that helps others decide what to do about this mess at least. You might need other stuff if you register a business with an actual name instead (E.g., AtariAge rather than Albert).

Thank you for writing all this up, as well as your followup post today.  I appreciate it, and it gives me a sense of what I'm in for once I start going down this road soon.  As soon as I get caught up shipping pre-order games in the store, I will devote time to this as I'd really like to be able to start shipping directly to the UK again. 

 

I do have a question -- what are the requirements when someone purchases something from you in terms of what you need to display either after the purchase is complete and/or on a receipt/packing list in terms of VAT?

 

Thanks again,

 

 ..Al