2015 Means EU Tax Increase On Cloud Storage, E-books and Smartphone Applications 164
schwit1 writes With the new year, a change in fiscal rules in the European Union is increasing the tax on many purchases of digital content like e-books and smartphone applications. Under the new rules, first approved in 2008, the tax rate on digital services like cloud storage and movie streaming will be determined by where consumers live, and not where the company selling the product has its European headquarters. Tax experts say Europe's revamped rules could add up to an extra $1 billion in annual tax revenue for European governments.
should five per cent appear to small (Score:5, Funny)
be thankful I don't take it all
Re:should five per cent appear to small (Score:5, Insightful)
Actually VAT is 15-20% in the EU. We like it that way, it pays for stuff like our socialised healthcare and affordable/free education.
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Depends on the rate - standard rate must be at least 15% and reduced rate at least 5%. There are other rates.
http://ec.europa.eu/taxation_c... [europa.eu]
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"We like it that way,"
Wonder if you'd like 50% or 90% or whatever better, because it would pay for more stuff like your socialized healthcare and stuff and more stuff.
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In Finland we have 24% VAT and all we get is a bloated public sector that gets nothing useful done. If I want healthcare in a reasonable time, I have to go to a private clinic. Education is obviously not free, but it's true that someone else has to pay for your personal gain. The natural outcome is that everyone gets a university degree even if they don't need one, i.e. a lot of productivity and other people's money is being wasted on what isn't even very high quality education once you get past the element
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I know you're baiting, but for heaven's sake, which part of Europe are you in? Most of my family is scattered around Europe and I know that we all "enjoy":
1. Very high direct and indirect taxes / social charges, which fail to fully finance,
2. Massively oversized and inefficient public sector organisations, especially in healthcare and education, (tip: if you want "good" either of those two over here, you'd better have plenty of cash),
3. Zero or negative growth, leading to,
4. Massive public debts.
Yeah, we l
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True but take all that and then finance the world's most expensive military by 10 times. That's the USA.
If the USA would stop defending Europe and let Europe defend itself then the USA could shrink their military by 25%
Of course the USA would never shrink it's military budget that might make sense.
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Please let us "defend" ourselves. And please also don't bother us with participating in all those wars of aggression you want to fight. If you want to support the Kiev coup regime or arm ISIS while they ware fighting Assad please leave us out and take it up directly with Putin and Assad.
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Please let us "defend" ourselves.
You mean like you did during the 20th Century?
How well did that work out?
Were it not for the United States, all of Europe would be either German or Russian, take your pick.
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Actually VAT is 15-20% in the EU. We like it that way, it pays for stuff like our socialised healthcare and affordable/free education.
I think you'll find the GP was quoting The Beatles' "Taxman". At the time, the group were in a 95% tax bracket, the 5% being what they were left with!!
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I have family in Portugal, France, England and a couple of other countries. I've never heard a single one of them say they like the tax rates. I do hear plenty of complaints about how high taxes are but social programs constantly getting scaled back. In fact, a couple of my uncles in France have had to get private health insurance, oh ironic, to compensate for what the government has cut. France just hit record unemployment again, something my cousins have felt for a while. Don't even dare ask about stuff l
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I've never heard a single one of them say they like the tax rates. I do hear plenty of complaints about how high taxes are but social programs constantly getting scaled back.
I don't think anyone likes paying tax, but they certainly like the public services. If you offered them a choice between say the US model of low taxation but you are on your own for everything, especially healthcare and a decent education, and the EU model I think most would take the latter.
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I live in Canada, and sure people like the public services here ... as long as they can get them. Then again, I've been waiting 9 months to see a ENT specialist...dem public services...
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Comment removed (Score:5, Interesting)
Re:$1B in new tax revenue! (Score:5, Insightful)
Re:$1B in new tax revenue! (Score:5, Insightful)
Short of setting an EU VAT rate there's not much else the EU could do. Let one country undercut others on VAT and you'll get big players like Amazon/Tesco setting up firms with 'headquarters' there to pay the lowest rate.
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All of this basically presupposes that taxes are a right of government. Let that sink in.
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taxes are a right of government, we have governments to organise stuff we couldn't do individually like national defence and such like and the tax pays for those things. How else could it work?
Of course, government itself is a thing we have to have but don't really want, a necessary evil if you like, and we have to pay tax for that too, but there's no other way round that.
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In the US, at least, we don't presuppose any such right. We explicitly grant it to the government in the 16th Ammendment.
The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration.
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And the 16th is permission, not a right. Which is a point missed to too many people here.
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Actually, the 16th only applies to income taxes.
And taxes are a permission, not a right (a subtle distinction). The 16th is permission, supposedly by the people, to collect taxes on income. And like all taxes, was supposed to be progressive, and only applied to the Uber Rich when it was promoted, only to apply currently to just about anyone making more than Min Wage. Compliance costs are extremely high for the average person who can't follow Income Tax Regulations. And the EZ form is nothing short of robber
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Short of setting an EU VAT rate there's not much else the EU could do. Let one country undercut others on VAT and you'll get big players like Amazon/Tesco setting up firms with 'headquarters' there to pay the lowest rate.
It would only apply to distance sales tho, so Tesco et al couldn't sell goods at the lower VAT rate in UK stores, just online.
Remember Play.com? How originally it was cheap cheap cheap DVDs from the Channel Islands where taxes were lower and thus items were cheaper? Remember how that got "fixed" pretty quickly? Same shit.
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I am not yet aware of equivalents to the UK VAT MOSS in other countries, though I'm sure they'll get it together. But bear in mind by registering with the MOSS you forfeit your "too small to matter" VAT registration exemption. And you still have to collect all the evidence. There are other catches too that I don't remember. But mostly it doesn't help anyone not in the UK.
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well if you have to collect VAT then obviously you have already forfeited your "too small to matter" non-registered for VAT exemption! (ah, if only I could collect VAT but be exempted from passing it on to the taxman)
It would have been nice to have the exemption for small businesses across the EU, but the EU bureaucrats don't consider things like that, just those lovely rules and paperwork.
It'll be interesting to see what happens with payment processors, how they determine which country I'm in if the entire
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This is typical of European tax regulations (both EU and national): administrative burden and impact are gauged by looking at how things will work out for lar
VAT MOSS Compliance too hard for authors I know (Score:2)
Most of the US authors and artists I know who self-publish have recently been ranting about VAT MOSS compliance costs, and how it's basically too difficult and expensive to make it worth selling to Europeans since the new law kicked in, so their web sites now won't sell to you if you ask to ship to Europe.
The ones who aren't ranting about it either don't know about the issue, or are just planning to ignore the taxes.
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It's even more fun if you're in the EU, because apparently there are also laws that mean discriminating against customers elsewhere in the EU based on which EU nation they're from is itself illegal. According to the people citing those rules, you can sell to all or you can sell to none, but you can't sell to your home state and not to other EU states.
That said, I'm not sure how long that would stand up in court, when the defence inevitably argued that they weren't discriminating on the basis of the customer
Your information is *way* off (Score:3)
I'm blowing several moderations in this thread to make this point, but it's important enough that it needs to be made.
Almost no small sites were doing there own checkout process, those that are can use VAT MOSS in the UK (I'm sure equivalents exist in other EU countries) to avoid registering with ANY new tax authorities.
That is some combination of unrealistic and simply wrong.
For one thing, there are thousands of small/micro businesses -- actually, it could be millions, but no-one has accurate figures across all of Europe yet -- that are theoretically affected by the new EU VAT rules this year. The governments of the states individually and at European level completely dropped the ball on this one. They did
This will actually *help* some big businesses (Score:2)
It will *DESTROY* compettetion between member states of the EU by small traders, while making absolutely no difference to Amazon, ebay, chinese sellers etc.
The irony is that if they don't fix this mess quickly, it will make quite a different to big business. Specifically, big business will be the only business that can afford to keep track of the compliance rules, so small businesses will have to sell via marketplaces run by big businesses and give big businesses a substantial cut of the revenue. Amazon and friends won't need to play games basing themselves in tax-efficient places in Europe; they can just place themselves tax-efficiently on a global level and
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It isn't nearly that complicated. When you take a card payment (online services remember) you simply bill according to the billing address. In fact for small retailers who use a payment processor it will be automatic.
Re: $1B in new tax revenue! (Score:3, Informative)
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Shipping address, or simply ask the user to select their country.
This is nothing new, sites are already required to do this stuff by payment processors who are required to operate with local laws (e.g. Mastercard UK are governed by UK law, even if I use the card to buy from a website in France).
People just seem to assume that all EU laws must be idiotic, but when you get past the headlines and Daily Mail articles and actually look at them they tend to be quite sensible and well thought out. This is just one
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We're talking about online supply of digital goods (at least for this year; it changes again in 2016). There is no shipping address.
Customers can self-certify their location, but in that case you need to correlate it with the registered bank/card location, which not all payment services will give you. This will probably change now, but certainly many services don't do it yet, while the new rules have already come into effect.
Even if you can get that information eventually, you still have the consumer protec
Re: $1B in new tax revenue! (Score:2)
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HMRC's 'proactive' communication was to send a notice to all VAT registered businesses
And as a director of multiple VAT-registered UK companies, I can tell you that they didn't even do that effectively. As far as I'm aware, none of my companies has received any notification about this change from HMRC, and our accountants have confirmed to me in writing that they were not notified on our behalf either. So at best, the "notification" was some aside in some paperwork a long time ago that neither we nor our accountants realised even merited a brief discussion about whether it might affect us, w
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That's impressive: 4 points stated with great authority, and every single one of them is either inapplicable to the current change or simply wrong.
1. Vendors selling on-line don't (and in most cases can't) meet the required standard of evidence for their customer's location. This is one of the big problems with the new rules, and a lot of people have been talking about it, and various national governments have taken emergency measures within the last few days to mitigate the problem temporarily having reali
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All taxes are regressive.
This also goes towards tax compliance.
Just remember, it is your money that is being taxed.
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And where do governments get money? By selling cookies? Gimme a break.
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They could get some of it by selling valuable services that the market couldn't satisfy. Aw heck, even if you force-sell to the population at large, at least keep up the appearance that this is in exchange for specific goods or services of value provided to the population, as opposed to some sort of general entitlement by the state to your money. That mindset would come along with burdens upon the state to show minimality, necessity, etc., rather than mere majority whim.
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How is a forced sale different from a tax? Spare the philosophical nonsense, it only serves to waste money. Call it a tax and pay trivially less.
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Voluntary taxes which can be avoided by anyone. Compulsory taxes are a threat to liberty simply because it requires force of government for compliance.
Once you realize that Eric Garner was killed over taxes, you'll realize we live in a police state that is chasing after every last dollar it can extort out of the people. At the point you realize that Taxes discourage the activity / goods they are applied to, then you can simply tax "sin", which would fund everything we want in government while at the same t
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Once you realize that Eric Garner was killed over taxes [...] Don't ban cigarettes, tax them.[...]
Non sequitur. The former is an argument against the latter.
You're clearly living in a fantasy world. You sound a bit like Dennis:
https://www.youtube.com/watch?... [youtube.com]
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Eric Garner didn't pay the taxes, nor should he have. They should be taxed at the manufacturing/Distribution level, not at the store. I realize that it appears to be a Non Sequitur but it isn't. You apply/collected taxes to the smallest vector possible (higher up the chain). The Cigarettes Eric Garner was selling, were singles, not packs, not cartons. There is no need to pay taxes on singles. And police shouldn't be enforcing tax laws with choke-holds for people selling single cigarettes.
But you now must re
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There are several issues here:
Where should taxation occur? This can be debated, but is not the object of the discussion.
Police brutality: it's shameful and unacceptable, but it's tangentially related, at best. Claiming that taxation caused it is absurd.
Tax evasion: he should've been prosecuted for this, no doubt there. Police reaction was shameful, as I've said, but it doesn't make him innocent.
You are arguing beside the point. Nobody said the cop reacted appropriately and it is frankly irrelevant to the di
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And how much in compliance costs?
Because actually adhering to the laws of the countries you are doing business in is now an unbearable burden?
It's all of the compliance work that costs incredible sums of money to keep everything in order.
That's mostly because you let your compliance be designed by consulting companies whose primary business model is to sell you more consulting hours.
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Because actually adhering to the laws of the countries you are doing business in is now an unbearable burden?
When the law says you effectively have to record and file taxes on the same scale as, say, Amazon, because you sell e-books for 5 Euros on your site and someone from another EU country happened to buy one copy... Yes, adhering to those laws is now an unbearable burden. It is literally not commercially viable for microbusinesses and even quite a few larger but still small businesses to operate across Europe today.
Plenty of vendors have, at least temporarily, closed their doors to international sales as a dir
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Yes, adhering to those laws is now an unbearable burden.
Then stop doing business there, problem solved.
It is literally not commercially viable for microbusinesses and even quite a few larger but still small businesses to operate across Europe today.
Yet strangely, thousands of businesses do just that. Apparently, they're all idiots for not listening to /. user #457657.
Plenty of vendors have, at least temporarily, closed their doors to international sales as a direct result.
Most of the crying comes from the UK, however, because of a special rule there which exempts most small business from registering for VAT at all.
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Then stop doing business there, problem solved.
That is exactly what a lot of those very small businesses are doing.
It is mind-boggling that you seem to think killing off trade because of overweight administrative burdens is a good thing. The entire purpose of the EU, or rather the original organisations that have now become the EU, was to facilitate international trade.
Yet strangely, thousands of businesses do just that.
And as of 1 January 2015, most of them are either ignorant of the law or breaking it one way or another.
Most of the crying comes from the UK, however, because of a special rule there which exempts most small business from registering for VAT at all.
There is no longer any such rule, at least for practical purposes, if you sell acro
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It is mind-boggling that you seem to think killing off trade because of overweight administrative burdens is a good thing.
I don't.
What I do think is that "whaaaa, we have to comply with laws!!! how could you!!!" is a valid business argument.
And I also do think that paying taxes in the country of the buyer was a good and necesssary step to stop all the tax-dodger multinational corporations from incorporating in the low-tax country and using their internal accounting to shift all income there.
An exception or lighter rules for small businesses would have been great, though.
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What I do think is that "whaaaa, we have to comply with laws!!! how could you!!!" is a valid business argument.
In general, neither do I. But if you decided to impose a new start-up fee of a billion pounds to operate as a small business and required five different company officers to sign the paperwork, the number of new start-ups you had would not be large the next year. It's about proportionality and reasonableness, and the new system is wildly disproportionate for a whole sector of the economy.
An exception or lighter rules for small businesses would have been great, though.
Indeed, though it's worth remembering that some of the new rules will be all but impossible for almost any business to com
Re: less tax revenue (Score:3, Informative)
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Is Switzerland part of the EU VAT system?
Regardless forget 8% - the place to be this year is Heligoland, part of Germany but with a 0% VAT rate.
Or the Channel Islands, a British Crown Dependency and though not part of the EU they are part of the EU Customs Territory. They too have 0% VAT.
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Personally, I stopped offering digital downloads - the costs (and more to the point, risk) of compliance simply weren't cost effective given the time could be better spent charging an hourly rate.
This is one of the things that has most annoyed me. I have multiple businesses, one of which is a consultancy that charges for my time and therefore lets me put a very clear lower bound on how much my time at work is worth. By that standard, the amount of time I have spent dealing with this issue on behalf of other businesses interests I have is already a loss of thousands of pounds.
So, the "correct" commercial decision for me is to just carry on with the consulting business and close down all the genuine s
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I do believe the grandparent was fully aware, and speaking ironically.
So much for a borderless society (Score:3)
>> tax rate...will be determined by where consumers live
Wasn't there some nutjob article here last week about borders disappearing? Not as long as we have taxing bodies...
This is nothing new for me. (Score:1)
I paid my country VAT rate buying from UK stores many years ago. Actually big online retailers in USA started to add VAT with the rate of the customer origin many years ago too.
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Up to now, this only happened when the retailer had a branch where the customer was located; US Retailer w/ branch in Germany selling to a German customer.
Now, all retailers in Europe have to deal with the hassle of having to individualy deal with the seperate tax offices in all the (european) countries its customers are located in.
Abslolute nightmare.
One exception: for b2b deals where the customer has an european tax ID, it's possible to bill without tax and the customer has to pay the tax to its local ta
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I dropped O'reilly's Safari Online book service when they started charging me UK VAT rates on my monthly subscription :/ Made it just slightly too expensive so I cut it out completely.
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Oh, I might add, that was 10 or so years ago.
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Thus offering evidence of my Thesis, All Taxes are regressive. People engage in tax avoidance, which only hurts the little guy. The wealthier you are, the easier (relatively) it is to avoid. So in taxing the online books, they have diminished the authors livelihood.
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It's actually really easy for companies to comply with the new rules. When the payment processor takes the payment it simply looks at the billing address given and adds the appropriate amount of tax. Google already does it automatically for Play store purchases, and I imagine Amazon and Apple do too. The retailer will be able to choose if they absorb the different tax levels, or if they charge the consumer.
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It's not quite that easy. You need multiple sources of evidence, you need up to date feeds of VAT changes from every EU authority, and then you need to (unless your local government does it for you) fill out tax returns for every EU country, assuming you have customers all over the place.
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One slight problem with that. When it has been passed to the payment processor it is too late. In many (if not all) EU countries, the law requires that the tax inclusive price is shown to the buyer when the buyer is a consumer (ie not a business to business transaction). So the appropriate VAT rate has to be known before the buyer is shown the selection of goods/services on offer.
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The tax inclusive price can be shown, the web site just needs to show which country's rate it is using and have a drop-down for the user to select from. Many sites already geo-locate to offer their services in the local language and according to local laws (e.g. some items cannot be shipped to certain countries), and the ones that don't simply need to add a disclaimer saying "tax shown at 20%, adjust for your local rate".
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As others have noted, it isn't nearly as easy as that. For example, perhaps you didn't realise, but there are huge numbers of small vendors selling on-line who don't use marketplace sites. There are multiple payment services with multi-billion dollar valuations that support that kind of set up, and many more smaller ones in a fast-growing field. This is not some minor edge case. This is hundreds of thousands of businesses.
Also, the workaround you proposed for the conflict between displaying tax-inclusive pr
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This is aimed at companies like Amazon or Google who are "based" in whatever country lets them avoid tax. Now they'll have to pay tax. This is good, right? Yes, there's some paperwork involved. So, do the paperwork and there are no problems. It's the cost of doing business. They can always give up and do something else; someone else will step in and somehow struggle through all those bits of paper so that they can import boxes from china, pay the staff minimum wage etc. Frankly I'm surprised there's no
Re: This is nothing new for me. (Score:4, Informative)
This is so much more than that.
I own a web hosting business. My company id based in Canada (where I reside), and my servers are located in Canada.
If a European resident decided they wanted to do business with my company, all of a sudden I have to submit to their tax rules. I must collect and submit taxes to their countries government. Obviously I have the choice to decline, and tell the potential customer to go do business elsewhere... but that is bad for business.
I can register with MOSS in the UK, and it will allow me to accomplish this hassle much more easily, but it is still a complete pain in the ass.
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If a European resident decided they wanted to do business with my company, all of a sudden I have to submit to their tax rules.
Why? Are you somehow subject to EU laws?
I'm not, no more than I'm subject to China's laws.
The EU can pass any rules they want, I have no presense in Europe and don't much care what they have to say.
Re:This is nothing new for me. (Score:5, Informative)
Yes, there's some paperwork involved.
Some? We have 35 different VAT regimes here... And VAT changes regularely. Try to integrate that into your webshop.
The problem with this system is that it's backfiring. Yes, it is intended at the big companies who can pick a convenient country to pay taxes in. But it only hurts thousands and thousands of little mom-and-pop webshops who suddenly need to file extra paperwork, keep "2 reasonable proofs of location of the buyer" (Duh? Over the internet?) and must keep that information for 7 years (Hello! Security breach knocking at your front door!). So, to downloading a font, a game, or anything else purely digital, I now have to enter my address details into each and every shop. Why? It's a freaking download. Creditcard number should be enough.
Then there are 2 additional problems:
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And yet, we still have small website operators here. They just don't manage their own checkout process. It does sound like you have more strenuous record keeping regulations though,
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Some? We have 35 different VAT regimes here... And VAT changes regularely. Try to integrate that into your webshop.
If your business is creating webshop software, then that's part of what your customers pay you for.
If your business is selling socks and your webshop software doesn't do proper tax handling, then wtf are you paying for?
Why?
Because you should be happy that your taxes go to your country and not to some 3rd world tax haven where the local druglord will spend them on whores and guns, you moron.
Send your thank yous to the multinational corporations who dodge taxes by putting their "headquarters" into low-tax countri
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If your business is selling socks and your webshop software doesn't do proper tax handling, then wtf are you paying for?
What is this "webshop software" you keep talking about?
Not everyone uses marketplace sites. The people most damaged by these new rules are mom-and-pop stores selling some small digital product with little more than a home page and a PayPal button.
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Yes, there's some paperwork involved. So, do the paperwork and there are no problems. It's the cost of doing business.
Congratulations, you just killed an entire sector of the European economy, which can no longer afford to operate.
You don't run a successful economy by making the price of doing business, particularly for small businesses, more than they generate in total revenues. That is literally now the case for thousands of businesses, though no doubt many of them will continue to operate illegally anyway because they don't even know they're doing anything wrong.
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First it was DRM. Now taxation (Score:2)
So, if on my Ipod i will set the living place by choosing the first country on the list, Afghanistan, and will pay with Paypal or Bitcoin, will the tax be collected? How will the living place will be determined? Complexities are staggering.
On the other hand, there are approx 500 million people living in EU, which gives an average $2 revenue per person per year, or less than approx 1.5 EUR per year. Let's make a non-scientific assumption that 10% of the population are actually using the services, which gives
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Its quite simple - if the vendor cannot reliably detect a VAT rate for you, they will use the fallback VAT rate of 15% for standard rate, or 5% for the reduced rate, which are the EU minimums for those rates.
Nuff said really :)
You can check out all the EUs member VAT rates here:
http://ec.europa.eu/taxation_c... [europa.eu]
Afghanistan is outside the EU (Score:2)
So, if on my Ipod i will set the living place [to a country outside the European Union], and will pay with Paypal or Bitcoin, will the tax be collected? How will the living place will be determined?
if the vendor cannot reliably detect a VAT rate for you, they will use the fallback VAT rate of 15% for standard rate, or 5% for the reduced rate, which are the EU minimums for those rates.
The customer is in Afghanistan for all the vendor can tell. If VAT is based on the EU country of residence, what gives the EU authority to charge VAT on goods sold to customers outside the EU?
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"For all the vendor can tell" - patently not true, as the vendor won't rely solely on customer supplied information. Don't expect to be able to purchase anything with a payment method which doesn't corroborate location information supplied by the customer - this is not done on the honour system - so bitcoin et al are out.
Regarding sales to entities outside the EU, this is already covered by EU rules and VAT isn't charged for those sales - if, that is, the purchasers payment method details corroborate the e
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Taxes will be collected, for sure, and the rest of your thesis is missing a major piece. Taxes are regressive, as people search out tax avoidance remedies. The only people hurt are the ones that cannot avoid the taxes, and these tend to be poorer people. Socialist paradise!
This is not the most important part of the change (Score:5, Informative)
While the OP in principle is correct, the increased tax revenue is not the most important consequence of the change. The drastic part is the legal burden added on companies offering e-services. Any company (regardless of whether they are located in the EU or the US, regardless of their size, and regardless of their annual turnabout) that want to makes sales in the EU will now have to read and understand 28 different national tax laws regarding VAT. Not only do all these countries have different VAT rates, but they also have different exceptions depending on what it is that is sold. In one country the VAT rate might be 20%, unless the sale can be categorized for example as advertisement, in which case the VAT rate is 10%. In another country the item that is sold might be categorized in a different manner.
The burden of figuring out what tax to charge lands entirely on the salesman, even if he's just a hobbyist selling a single item. Needless to say, learning and keeping track of 28 different legislations is impossible unless you are a large corporation. But despite this, a german shop owner charging the wrong VAT rate for a bulgarian customer might end up being sued in a bulgarian court of law. And in the long run get extradited to bulgaria. Since this law change in practice is going to wipe out small business owners, there have been quite vocal protests raised. For example a twitter storm ended up making the #EUVAT hashtag trending at number 3 worldwide. (see http://euvataction.org/2014/12... [euvataction.org]) More information about what the salient consequences of the law change are can be found at http://euvataction.org/key-fac... [euvataction.org].
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read and understand 28 different national tax laws regarding VAT
Which isn't half as much trouble as you make it out. Firstly, most people who are half-way serious about selling something online use some kind of merchant service that will manage that for them. Secondly, you don't need to read the whole law. You only need to understand what the tax rate for your product is. If you're a small company or hobbyist, you're unlikely to have more than one class of products.
And in the long run get extradited to bulgaria.
Total nonsense. To be a crime, and not just a misdemeanor, you have to commit tax fraud intentionally. You
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Firstly, most people who are half-way serious about selling something online use some kind of merchant service that will manage that for them.
Wrong. On some estimates so far, that group is actually a minority of the small and microbusinesses affected by these measures. It certainly isn't "most".
Secondly, you don't need to read the whole law. You only need to understand what the tax rate for your product is.
Wrong. You also have to understand, for example, the rules for issuing VAT invoices, which again differ widely among the 28 EU states.
Of course, even if you were right, "understanding what the tax rate for your product is" is no small thing now. Each state has its own quirks about different rates for different types of product. You can't even rely on the o
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Wrong. On some estimates so far, that group is actually a minority of the small and microbusinesses affected by these measures. It certainly isn't "most".
Really. Maybe I learnt something new today, or maybe we're talking about different things. You see, I'm not talking about Grandma's Handmade Socks or the local pizza delivery service - they're not worried about cross-border commerce. These businesses are the vast majority of microbusinesses. But they are not affected by this measure.
the rules for issuing VAT invoices, which again differ widely among the 28 EU states.
Really. Apparently I was dreaming when a 30-second Google search turned up this informative overview that includes, among other things, a bullet list of what an invoice has to c [europa.eu]
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You see, I'm not talking about Grandma's Handmade Socks or the local pizza delivery service - they're not worried about cross-border commerce. These businesses are the vast majority of microbusinesses.
Grandma's Homemade Socks aren't affected this year because they don't supply digital products on-line. If the current plans haven't changed by the time the VAT rules change again in 2016 to include physical products as well, you should probably start planning for another significant dent in the European economy.
Pizza delivery companies aren't microbusinesses. Microbusiness in this context usually refers to individuals who sell something on the side to make a little extra money on top of their day job.
There
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that in the UK alone
The UK is a special case here in that you don't have to register for VAT at all unless your revenue is quite considerable (much bigger than any microbusiness). So yes, for the UK, a lot suddenly changed.
Look at the length of the document you just linked to. Seriously.
It has a TOC. It took me literally 10 seconds to find what I was looking for in it.
We simply don't know yet.
We can agree on that. Maybe I've just been in too many positions where people came to me all day long complaining that this or that change or proposed change will make the sky fall. Maybe I've become desensitized to these alar
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Well, let me give you one data point. I have a business that is big enough to be worth continuing under these conditions, but only does a tiny amount of trade across EU borders (we're UK based and the US is by some way our biggest international market so far). It's larger than a microbusiness but still in its early days being run on the side by the founders rather than with any full-time staff.
We knew some time ago that the change to charge VAT in customers' local currencies was coming (no thanks to HMRC, I
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Good points with solid first-hand experience, thank you.
Yes, it's an additional burden and I don't think the two-data-points requirement is great, though I can't immediately think of a better solution that isn't trivial to game.
The problem is that there's no good way to make the rules better. Keeping business-country-VAT is an open invite to more Amazons to incorporate in low-tax countries. Putting a only-applies-to-more-than-one-million-revenue-companies exception on it would mean the same thing has differ
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It seems to me that the most practical solution is to say if you're going to charge tax that is going to the tax authorities in another EU country, those authorities must use a standardised EU-wide tax rate for cross-border sales.
This does mean each nation would have to surrender some control over its tax levels, which is a threat to national governments and not likely to go down well. But then this whole policy is designed to undermine precisely that independence anyway, so I'm not sure that's really any w
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True, a unified "EU VAT" would be ideal. But given the realities of politics, it's not something that will happen within this decade.
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Perhaps not, though I suspect neither is collecting the level of extra tax revenues they think they're going to get from the recent EU VAT rules...
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Wrong. On some estimates so far, that group is actually a minority of the small and microbusinesses affected by these measures. It certainly isn't "most".
Really. Maybe I learnt something new today, or maybe we're talking about different things. You see, I'm not talking about Grandma's Handmade Socks or the local pizza delivery service - they're not worried about cross-border commerce. These businesses are the vast majority of microbusinesses. But they are not affected by this measure.
Every small-time RPG publisher selling a few PDFs per week is affected by this. And many believe they're even affected if they don't live in the EU. Some have announced they won't be selling to EU countries anymore (which still means they need to figure out where their customers are from, of course).
Big part of the problem is that information is sparse and very late. The law may be from 2008, but most shops only heard about this a few weeks ago. So now people are panicking. Justified or not? Nobody really k
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I got the impression that this was already the rule for physical objects. And there it makes sense, because at least you know what address you're shipping it to. It'd be crazy to do this only for downloads and not for physical stuff.
By the way, the argument that is significantly hurts the common market, is a really good one. I'm sure that should be able to get some people to take a closer look at the effect of this new rule; it goes completely counter to the primary purpose of the EU. I've also heard from a
The government should provide do the calculation (Score:3)
Most of the complaints here are in regard to complexity.
Wouldn't it be reasonable for the EU to then provide a webservice for such a calculation.
They take in an address/other info and tell you how much to add to the bill. How much info would be up to the EU. It's their citizenry. They can then vote on how much is too much. Heck, if they can force their own citizens to provide a government issued national ID and retina scan for every purchase for all I care.
They can provide healthcare and education. They should be able to build a webservice :P
Not really a tax increase (Score:3)
The summary calls it a tax increase, but the tax rates aren't changing (or if they are, it's up to the individual member states, not the EU). What the EU is doing is closing a tax loophole that allows big companies (Amazon and the like) to put their European office in a tax haven so they don't have to pay any sales tax in the EU. But now they have to pay the VAT rate in the country where the customer is, rather than where their own office is.
In principle that's totally reasonable. What upsets a lot of people about this new rule is that small time PDF publishers may have to register for sales tax in 28 countries as well as collect data on where their customers are (and the rules for that are really confusing) and keep that data for 10 years, when previously they didn't have to know anything about their customers (because they just downloaded the thing, and payment was handled by a payment provider), and they didn't even have to pay any VAT at all because they were below their countries VAT limit, due to their low volume of sales. The new rule doesn't seem to specify any minimum.
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Don't be a fucking moron. If you buy something, you pay sales tax. This just makes edge cases related to the internet more sensible.