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> For example, if a British company earns income in Germany, its pays German taxes on its German income. This isn’t entirely accurate (heh, taxes are complicat
by fyfy18 9y ago
> For example, if a British company earns income in Germany, its pays German taxes on its German income.
This isn’t entirely accurate (heh, taxes are complicated). The company would most likely pay VAT/sales tax in Germany, but would pay corporate/income tax in the U.K. If your customer is a VAT registered business you would usually exclude the VAT, unless they are based in the same jurisdiction as you (it doesn’t matter where the item is going).
Up until 2015 this wasn’t the case for digital goods as VAT was charged at the ‘place of supply’ (where the company was based), but it is now accounted for where your customer is located. This is what caused the VAT MOSS kerfuffle, as you now need to account for 28 sets of tax rules depending on where your customer is located.
- cm2187 9y agoNot if the sale is made out of a branch or subsidiary based in Germany. Then its profit is calculated in the same way as any local company and taxed locally. And I think this what we are talking about in Apple's case. Not sales made directly by Apple Inc in the US but sales made by foreign subsidiaries of Apple.
- kgwgk 9y agoVAT is paid by consumers, not companies. In principle, companies just collect the tax from their customers and send to the state the part that they are not transferring to their providers (but of course, taxes are complicated).