This is really important if you are in the EU or plan to sell anything online in the EU ( games, music, art, I'm looking at you!! )
EU VAT legislation coming into effect on the first of January 2015 means that anyone who sells digital products online, if they sell to any countries in the EU, will have to charge VAT in the country of the buyer instead of the seller. So far, so simple, but the issue is all tax thresholds have been removed – so selling one item for a £1 means you have to register and keep records for VAT. Britain used to have a sensible policy of exempting any business that turned over less than £81,000 from VAT, but that's now being removed for online businesses.
HMRC have confirmed that the changes will be enforced, even going so far as to produce official flow charts explaining the impact. All sellers of digital items will be affected. No matter what digital item you are making and selling – be it e-books coming direct from authors or small presses, independently produced computer games, mp3s from musicians, technical items like Wordpress themes or online learning courses – or even knitting patterns – you will have to get familiar with your nation's nightmarishly complex VAT tax regime.
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Source:
http://www.telegraph.co.uk/technology/internet/11295953/How-the-EU-is-throttling-online-business-with-idiotic-VAT-reform.html
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