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Amazon and eBay Sellers' VAT Fraud Rife Despite Crackdown (theguardian.com) 81

Huge numbers of VAT fraudsters are illegally selling goods tax-free to British shoppers on Amazon and eBay, despite new government efforts to crack down on this ballooning 1bn pound VAT evasion crisis, reports the Guardian. From the article: A Guardian investigation found a wide variety of popular goods being illegally sold without VAT on Britain's leading shopping sites. They range from cheap Christmas tree lights, electric toothbrushes and thermal socks to expensive laptops, iPads, music keyboards, violins and pingpong tables. In some cases, VAT fraudsters offer unbeatable prices. Mostly, however, their prices remain in line with law-abiding competitors and the proceeds of evasion disappear overseas, often to China. Guardian investigations found many tax-evading sellers were trading without displaying VAT numbers on Amazon or eBay. Others were showing made up numbers, or numbers cloned, without authorisation, from unsuspecting legitimate businesses.
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Amazon and eBay Sellers' VAT Fraud Rife Despite Crackdown

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  • by Anonymous Coward

    As ought to be with sales tax, the nexus of a sale for a VAT transation should be the seller's location, not the buyer's. Every seller has only one location or a small set of locations; in every event, the location is well known according to local laws. The task when trying to make the buyer's location the nexus of the sale for an internet transaction is extremely hard not just for ensuring that the taxing authority is the correct one but also for the bookkeeping of sending remittances the right way. It

    • Re: "the nexus of a sale for a VAT transation should be the seller's location, not the buyer's." -- So that the sellers can do tax inversions and declare that their business is located in tax havens? Additionally, it's the people spending their hard-earned that are paying for govt. services, for example making trading safe and secure, with basic minimum standards for health, safety, a legality. That's what consumers and businesses are paying taxes for. The businesses may or may not get taxed for govt. servi

    • Under that system you still need to deal with stuff like that selling over seas.

    • by darkain ( 749283 )

      Yeah, that whole "sellers, not buyers location" thing? We did away with that a few years ago here. And trust me, as someone who writes ecommerce software, this has been one of the largest fucking pains in the asses ever since. http://dor.wa.gov/content/find... [wa.gov]

    • by Rei ( 128717 )

      I get the impression that you don't know what VAT is.

      Let's say that you have a widget shop in the US and a widget shop in the UK, and they both would turn a profit selling their widgets at $5 each. The UK decides that they need 20% tax money from the sales. Let's look at the different possible tax scenarios (US seller US buyer : UK seller US buyer / US seller UK buyer : UK seller UK buyer):

      1) Seller's location, only on UK companies: $5 : $6 / $5 : $6
      2) Seller's location, both US and UK companies: $5 : $6

    • Actually, if the tax is based on the buyer's location, the responsibility for PAYING said tax to the necessary authorities should rest on the buyer, not the seller. So in this case, the UK resident buying stuff from overseas should be responsible for reporting and paying any local VAT to their government.

      Of course, Given my location (in the USA) and our long ago settled issue with the Brits over Taxes (among other things), I feel strongly that I should be paying the Brits' VAT, unless I happen to be visit

      • by jabuzz ( 182671 )

        Maybe the responsibility should rest on the buyer, but legally they are not. It's the responsibility of Her Majesty's Revenue and Customs to collect VAT on imported goods, and the responsibility of the the seller if they are anywhere inside the E.U. Quite what happens if a good destined for the UK enters the EU at a port outside the UK is anybodies guess.

    • Yeah we tried that.

      The EU thought it would be a good idea. Small companies don't have the faff of dealing with lots of different vat rules, and large companies have regional sales offices do sales would be local. Turns out the didn't account for massive dickheads, i.e. Amazon.

      Amazon thought it would be marvelous to book all sales though the lowest VAT region giving them a considerable tax advantage over bricks and mortar stores. Eventually and rightly, everyone got pissed off at their incessant freeloading

  • by geekmux ( 1040042 ) on Monday November 28, 2016 @03:15PM (#53379611)

    Wait, you mean to tell me those who don't like paying obscene taxes on goods the rest of the world enjoys VAT-free, try and find ways around it?

    I'm shocked. Shocked, I tell you.

    In related news, I wonder how many of those high-level regulators who are super-pissed about this problem also enjoy tax loopholes on a personal level.

    Speaking of loopholes, any chance regulators from the Tax Haven of the Universe (Ireland) are super-pissed? They shouldn't be, since they harbor tax evasion on a scale most can't even dream of.

    • Tax avoidance is not the same as tax evasion.
      • I don't say "evasion". I say "avoision".

      • One just requires more planning?

        Evasion = Oh look, if I buy this from there I can get it without taxes because the seller is out of country and doesn't know what to charge, sweet!

        Avoidance = If I structure my life/business a certain way and move mailing and or physical addresses I can avoid taxes on all these transactions.

        • Avoidance is legal and in some cases arguably required, if not legally then morally. Evasion is illegal and immoral.
      • both are legitimate tools to reduce government oppression of the individual.

    • Wait, you mean to tell me those who don't like paying obscene taxes on goods the rest of the world enjoys VAT-free, try and find ways around it?

      I'm shocked. Shocked, I tell you.

      In related news, I wonder how many of those high-level regulators who are super-pissed about this problem also enjoy tax loopholes on a personal level.

      Speaking of loopholes, any chance regulators from the Tax Haven of the Universe (Ireland) are super-pissed? They shouldn't be, since they harbor tax evasion on a scale most can't even dream of.

      Oh if only you could have bothered to read the summary.

      Mostly, however, their prices remain in line with law-abiding competitors and the proceeds of evasion disappear overseas, often to China.

  • Successive UK govts. have severely underfunded the UK's Inland Revenue Service for decades. They don't have the resources to investigate most tax fraud which is why so many individuals and corporations are getting away with it. Remember that taxes are what pay for legal frameworks and judicial systems so that corporations can do trade as well as pay for education and training for their workers, building and regulating transport infrastructure, insuring and bailing out banks, etc. They get a pretty fantastic

  • They love to talk about their free social programs, but they hate paying for it.

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