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High time for unified EU VAT, otherwise we will stay behind. VATMESS and lack of unified digital market rules is what keeps cross-EU online business tough.

henrikschroder 9y ago
Agree, the recent change to charge VAT depending on the location of the buyer is pure hell to deal with. As a EU business, I really don't want to have to figure out where in the EU my customers are, and adjust the price according to whatever their country's VAT rates are this month.
- ProblemFactory 9y ago
  It is somewhat necessary, to solve the problem of Amazon, Google, Apple and others selling everything via low-VAT countries like Luxembourg. But there would have been ways to make it much less painful to manage for small online businesses. For example a revenue limit (like 1M EUR) on cross-border sales before you have to start dealing with each country, or just an unified EU-wide VAT rate.
  - nradov 9y ago
    Why is selling from low VAT countries a problem? VAT is only one of many potential government revenue sources.
    - ProblemFactory 9y ago
      VAT is just one source, but at 15-20% of government revenue, it is an important source. Most of it will be generated by business that physically happens in the country, and is unambiguously taxed there, but more and more of business is moving online. Selling from low-VAT countries is a problem because it is a fictional accounting move. If you buy a product from Amazon.co.uk, delivered from an UK warehouse to an UK address - or from Amazon.de, delivered from a German warehouse to a German address - then it is still billed through Luxembourg. Even though by all non-accounting measures it is business happening inside the UK and Germany. The only reason for choosing Luxembourg is tax rate optimisation, not because there's an actual place of business there. It's understandable that most countries in the EU would want to keep taxes on business that happens in their country to themselves. If VAT exists at all, then it makes sense not to gift it to Luxembourg. So the rules were changed to remove this accounting trick.
peteretep 9y ago
America seems to get by just fine with non-unified sales tax
- imhoguy 9y ago
  AFAIK there is no sales tax for online services in USA, wherever you sell or buy. In EU it is complicated as you have to charge online buyer with his country VAT and then reconcile this thru provider's country revenue VATMOSS. EU has 28 member states with differing VAT rules, add to this burden of proof to ensure where the buyer is located (two non-contradictory proofs) then you may understand why it was named #VATMESS.

henrikschroder 9y ago

Agree, the recent change to charge VAT depending on the location of the buyer is pure hell to deal with. As a EU business, I really don't want to have to figure out where in the EU my customers are, and adjust the price according to whatever their country's VAT rates are this month.

ProblemFactory 9y ago
It is somewhat necessary, to solve the problem of Amazon, Google, Apple and others selling everything via low-VAT countries like Luxembourg. But there would have been ways to make it much less painful to manage for small online businesses. For example a revenue limit (like 1M EUR) on cross-border sales before you have to start dealing with each country, or just an unified EU-wide VAT rate.
- nradov 9y ago
  Why is selling from low VAT countries a problem? VAT is only one of many potential government revenue sources.
  - ProblemFactory 9y ago
    VAT is just one source, but at 15-20% of government revenue, it is an important source. Most of it will be generated by business that physically happens in the country, and is unambiguously taxed there, but more and more of business is moving online. Selling from low-VAT countries is a problem because it is a fictional accounting move. If you buy a product from Amazon.co.uk, delivered from an UK warehouse to an UK address - or from Amazon.de, delivered from a German warehouse to a German address - then it is still billed through Luxembourg. Even though by all non-accounting measures it is business happening inside the UK and Germany. The only reason for choosing Luxembourg is tax rate optimisation, not because there's an actual place of business there. It's understandable that most countries in the EU would want to keep taxes on business that happens in their country to themselves. If VAT exists at all, then it makes sense not to gift it to Luxembourg. So the rules were changed to remove this accounting trick.

peteretep 9y ago

America seems to get by just fine with non-unified sales tax

imhoguy 9y ago
AFAIK there is no sales tax for online services in USA, wherever you sell or buy. In EU it is complicated as you have to charge online buyer with his country VAT and then reconcile this thru provider's country revenue VATMOSS. EU has 28 member states with differing VAT rules, add to this burden of proof to ensure where the buyer is located (two non-contradictory proofs) then you may understand why it was named #VATMESS.