Feb 26

EU VAT

Posted by BMT Micro

Reading Time: 3 minutes

 EU VAT - BMT Micro

If you sell digital goods or services, especially to European consumers, you are most likely well aware of Value Added Tax (VAT) and the new changes that were put into effect on January 1, 2015. These changes brought new responsibilities for online businesses in terms of understanding the liabilities and charges in each EU state. However, it was recently announced that there are to be more changes to the EU VAT rules for digital services once again. The legislative changes are not expected until 2017 with draft legislation being introduced in 2016. So to stay ahead of your competition and prepare your business for this upcoming change, let’s go over the basics of EU VAT.

Please note: This blog post is for general guidance only and does not contain any legal advice. Please contact an accountant or your local tax authority for more information about the impact of VAT rules on your business.

What is VAT?
According to the EU, “the Value Added Tax, or VAT, in the European Union is a general, broadly based consumption tax assessed on the value added to goods and services. It applies more or less to all goods and services that are bought and sold for use or consumption in the European Union. Thus, goods which are sold for export or services which are sold to customers abroad are normally not subject to VAT. Conversely imports are taxed to keep the system fair for EU producers so that they can compete on equal terms on the European market with suppliers situated outside the Union.”

Until New Year’s Eve of 2014, VAT was based on the location of the business. However, the new VAT rules that were put into effect on January 1, 2015, state that businesses must now charge the VAT based on the customer’s location.

In short, you are affected by the new rules if the following are true:

  • You sell downloadable digital goods or services including music, films, games, web hosting services, etc. You can find a list here.
  • You sell to customers in EU countries (the rules apply to all sellers providing digital services to customers within the EU, regardless of whether or not you sell from within an EU member state).

And to comply with the new law, you will need to do the following:

  • Identify the location of your customer.
  • Calculate & charge the correct VAT rates based on the customer location & their local rate.
  • Save your customer’s location with two pieces of non-contradictory proof such as a billing address and matching IP address (you’ll need to store the evidence for 10 years).
  • Submit quarterly VAT returns to each EU state, or use a MOSS (Mini-One Stop Shop). MOSS enables businesses to declare and pay VAT for each EU member state through their own home country portal rather than registering for VAT locally in each EU member state separately.

If you would like to learn more about the VAT charges, please see this page: http://www.eurovat.com/online.htm

For many businesses it is easiest to use a reliable E-commerce company like BMT Micro to handle international transactions. It is also worth mentioning the difference between an e-commerce provider and a reseller. Some E-commerce providers act as a payment processor only, which means they forward all receipts to the software developers so they are not responsible for accounting for VAT. E-commerce resellers deal with all shopper invoices and accounting issues so customers always receive invoices with the transactions made. If a third-party platform handles the payment, supply and also sets the standard Terms and Conditions (which BMT Micro does), they are responsible for accounting for VAT.

In compliance with this law, BMT Micro is registered with the UK as a non-EU company and pays VAT to the EU on all electronic purchases from customers residing in the European Union. Vendors of BMT Micro are seamlessly prepared to comply with EU regulations, as follows:

  • BMT Micro already charges VAT based on customers location via IP address.
  • BMT Micro files the VAT tax collected for its vendors.
  • BMT Micro keeps vendor VAT documentation for 10 years (which is required by the new law).
  • Our non-EU VAT number is: EU826001142
  • If you are VAT exempt, entering your complete VAT exemption number on a BMT Micro order form will allow our system to complete the sale without the VAT charge.

As a global e-commerce company, we understand the challenges you face when you sell internationally. We’re dedicated to providing you with the tools you will need to be able to adjust quickly for varying exchange rates and adhere to international taxes, tariffs, and fees. Whether you are a new or established vendor, BMT Micro will handle all the VAT for you, as part of our service. For more information about our services or if you have special needs regarding VAT, including VAT inclusive pricing, please contact our vendor services via email at vendors@bmtmicro.com.

Feb 19
Reading Time: 3 minutes

   Beware of Checkout Conversion Killers - BMT Micro

Most online businesses are obsessed with traffic generating strategies (like SEO, content marketing, social media, etc,), but they completely ignore their site’s conversion rate. Website traffic may generate sales, but conversion rates ultimately determine a business’s overall profitability. Even fairly basic errors can be costly for an online business and conversion killers can drive away customers & steal revenue without you even realizing it. To prevent this, online businesses should try to avoid these 4 common checkout conversion killers.

1. Slow Load Times
Research has shown that 57% of shopping carts are abandoned if a page load time is 3 seconds or longer, and more importantly, 80% of those shoppers will never return. Likewise, according to KISSmetrics, even a one-second page delay can cost your online business millions in sales per year. Shopping cart speed not only affects a shopper’s current visit, but future visits as well. Almost 50% of online shoppers say that when a checkout page takes too long to load, they worry about the success of the transaction (i.e. Were they billed more than once?). In fact, 46% of online shoppers cite checkout speed as the number one factor that determines whether or not they will return to a site.

2. Perceived Risks
Ultimately, online shoppers will only convert if they feel your site can be trusted. It is essential for an online business to protect their site, and more importantly, their customers’ sensitive information. Two of the most important features of a shopping cart are security and privacy because they are the two areas most online shoppers are concerned with. If your site lacks visual cues that indicate your website is secure, you run the risk of shoppers feeling uncomfortable and unsafe when making a purchase. Visuals such as security icons, locks, badges, certificates, and even credit card symbols can all help reinforce that a checkout is risk-free.

3. Limited Payment Methods
Online shoppers like to have options and control over which payment method they use. And online businesses that do not offer multiple payment methods risk losing potential sales once shoppers reach the checkout page. In a study done by a UK-based Internet marketing firm, 50% of online shoppers stated they would abandon their purchase if their preferred payment method was not available at checkout. The last thing an online business wants is for a customer to get all the way to checkout and decide not to proceed due to the lack of payment options available. Offering multiple payment options can also make businesses look more professional and trustworthy.

4. Indistinct Shopping Cart Button
It is surprising how often interested shoppers browse online stores, pick an item, add it to their cart, and forget all about it after 15-20 minutes. Typically, the fault usually does not lie with the customer but rather with the lack of emphasize on a shopping cart button. It should be 100% obvious to any online shopper on your site that they’ve put something in their cart. Creating a small animation or a popup that displays a cart’s content and a call-to-action can make any potential purchase unmissable.

Conversion killers can potentially suppress online sales by 50% or more. Don’t make the mistake of focusing too much time on driving traffic to your site and ignoring conversion rates. Focus on eliminating these checkout conversion killers and you will see an increase in the profitability of all your website traffic.

Partnering with a trusted and well established e-commerce company, like BMT Micro, can also save an online business the time and hassle of dealing with checkout conversion killers. For example, setting up multiple payment methods usually involves a long and complicated process of compliance with banks. We can handle all of your payment processing over our secure sites and offer your customers many different payment methods to help increase sales and reduce cart abandonment. We can provide shopping carts with highly customized programming depending on your specific requirements. Furthermore, all BMT Micro servers are fully secured and host all shopping carts using the highest encryption standards available so there is no need to worry about the expense of a secure certificate. If your business wants to start preventing checkout conversion killers or you are interested in learning more about BMT Micro’s services please feel free to contact our vendor services by email at vendors@bmtmicro.com.

Feb 12
Reading Time: 2 minutes

 Expand Your Social Presence with Snapchat - BMT Micro

Even if you don’t use it, you are probably aware of Snapchat or have least heard of it. The mobile application was initially released in 2011, but has quickly grown in popularity over the last few years. Snapchat has turned into a $10 billion company and a full-fledged social network. It has over 100 million daily users and over 5 billion video views that happen every day. And for businesses looking to grow their social presence in 2016, Snapchat should be a platform you consider.

The app was launched with a simple value proposition: to allow users to send pictures and/or videos to people they have connected with that disappear after 10 seconds or less. So, users don’t have a traditional “feed” that displays their Snapchat history. But users can post snaps to their “story,” which strings snaps together so followers can view it before it expires in 24 hours. Snapchat also gives businesses the chance to engage with a smaller community of their biggest fans and share exclusive, creative content such as:

  • Preview or teaser for upcoming products
  • A “day-in-the-life” or “behind the scenes” look into your businesses
  • How products are made
  • Event coverage
  • Exclusive promo codes
  • Contest details

However, since there is not an easy way for a business’ audience to “retweet” or “share” their content on Snapchat, attracting followers can be difficult. To build your following, a business will need to get creative with how they spread the word. This means promoting your Snapchat presence outside of Snapchat.

Like Twitter or Instagram, people can follow your account once they know your unique Snapchat handle. And, every Snapchat account has a unique “Snapcode” that will let others add you by “snapping” it. A business can draw attention to their Snapchat presence by making their Snapcode their profile picture or by sharing it as an image post. Businesses can also make a Snapchat story, download a part of it, and then upload it to their other social channels. This is a good way to show your fans what they are missing and what to expect if they follow you.

Snapchat is an extremely personal social network. Anyone who clicks on a Snap has to pay attention since photos and videos are sent in real time with limited viewing. Also, if you want to follow someone on the app, you have to seek him or her out by his or her username or Snapcode. This means anyone following your business on Snapchat is truly a valuable audience member and you are truly valuable to him or her. Of course, Snapchat is not going to be beneficial for every business, but it’s definitely something worth exploring.

Feb 5
Reading Time: 3 minutes

     Tips For Taking Your Online Business Global - BMT Micro

The great thing about being an online business is that reaching international markets has become easier than ever. Typically, most businesses start local and when their sales begin to increase, they consider moving operations into other countries. But, going global with your business can be a high risk and the more your business plans and prepares, the better off you will be. Here at BMT Micro, we possess an extensive understanding of differences in culture, customs, and idioms due to years of working with international vendors and customers. Based on this, we have come up with a few tips we think an online business should keep in mind when making the decision to expand globally.

Choose the right audience
One of the biggest mistakes a business can make when expanding globally is thinking that the world is an extension of their home market. What do we mean? Think about how much time you have spent analyzing your home markets behaviors, buying habits, motivations, and so on? The same amount of time and effort needs to be put into every market your business decides to enter abroad. Why? Because they are not all the same. When expanding globally, we recommend that a business start small and take on just a few markets.

Localize for the region, not just the language
Many businesses think they can simply translate their website into a local language and sit back while they wait for new customers to come rolling in. Even when a business has successfully translated their message into the language of their target audience, it is equally important to know how to say it. For instance, there are many cultures that prefer a more formal approach in business communications rather than informal and vice versa. Language localization is not just the translation, it is the comprehensive research and understanding of a culture in order to adapt a product or service in all aspects. This requires doing extensive research into a new culture, as well as good planning and execution.

Adapt your SEO
Localized content is very important when it comes to a business’ Search Engine Optimization (SEO) because major search engines have made it a part of their ranking algorithms. It is also important to note that just because a business’s website may have the best SEO in their home market, it does not guarantee the same success in international markets. In order to implement a successful localization content strategy, a business will need to identify which content will be unique to a particular region. A business will also need to study the local preferences of their global markets in order to understand how people are searching to find their website. These efforts will create a more custom experience for the users in the region and enhance customers experience with a business’s product or service.

So, keep in mind that going global with your business does involve more than just translating your website (although doing this may win you a few new customers). To truly be successful, a business will need to create a cohesive experience for their international markets. One will also need the right combination of localization and partnerships. But, finding resources to support global expansion can be difficult. Here at BMT Micro, our e-commerce services offer customers a complete purchase experience, from start to finish, in their own language. We are constantly working to add languages to our localization repertoire and can already provide services in German, French, Spanish, and more! We can also create custom shopping carts and order pages to match your website for a seamless transition. Please feel to contact our vendor services at vendors@bmtmicro.com to find out more about how we can assist with your localization needs and with the expansion of your business to global markets.