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Personally I find the sales tax system in the US much more complicated. At least in Europe the percentages are the same within each country, but in the US they

by raarts 9y ago

Personally I find the sales tax system in the US much more complicated. At least in Europe the percentages are the same within each country, but in the US they differ per state, county and even per town.

Silhouette 9y ago
At least in Europe the percentages are the same within each country This isn't actually true. There are quite a few dependent territories and the like that are part of the same country but have different tax arrangements. There are also multiple VAT rates for different types of product or service in a lot of countries, with different rules from place to another about which products or services attract a lower rate.
- raarts 9y ago
  Sure. The table can be found here[1]. But let's not pretend it's more complicated than it is, for a company that operates in a specific market, usually their products fall within the same VAT category. Unless you're Amazon or Bol that sells a range of products. In the US you basically can be sure that sales-tax varies by zip-code. I worked for a telecom company in the US that sent all their invoices to a specialized company, to have them calculate the tax, before sending them out to their customers. It was too complicated to do that on their own. Also because tax rates can and do change at the whim of some local city-government for example. And as far as I know tax rates in the EU are determined by the country-governments only, which means not very often. [1] https://ec.europa.eu/taxation_customs/sites/taxation/files/resources/documents/taxation/vat/how_vat_works/rates/vat_rates_en.pdf https://ec.europa.eu/taxation_customs/sites/taxation/files/r...
  - Silhouette 9y ago
    You're right that many businesses will operate in specific markets, but even then it's still not always clear which rate should apply, and different classifications might apply in different member states or even different areas within the same member state. E-books were a controversial ambiguity when the new rules came in, for example. We could get more into how many technicalities there are in this system, but I think I'm just going to mention that the document you linked there is 116 pages long, which probably says all that needs to be said on that point. As for locations, there are plenty of potential gotchas there too. Would you like to guess the rule if the person who bought an e-book did so while on holiday on a cruise ship in the Mediterranean? And as for not changing very often, I think the shortest notice so far was just over a week from legislating the change to the new rate coming into effect (Greece in summer 2016). To this day, I'm aware of no standardised mechanism for alerting merchants to future changes in the relevant rates, nor any authoritative list of current rates available in a machine-readable format for automation purposes. So while I agree that we shouldn't pretend it's more complicated than it is, the current EU VAT situation is a complete mess full of traps and technicalities to catch out the unwary, and full compliance is effectively impossible. It's a bad system, made by people who don't understand how either digital markets or small businesses actually work.

by raarts 9y ago

Silhouette 9y ago

At least in Europe the percentages are the same within each country This isn't actually true. There are quite a few dependent territories and the like that are part of the same country but have different tax arrangements. There are also multiple VAT rates for different types of product or service in a lot of countries, with different rules from place to another about which products or services attract a lower rate.

raarts 9y ago
Sure. The table can be found here[1]. But let's not pretend it's more complicated than it is, for a company that operates in a specific market, usually their products fall within the same VAT category. Unless you're Amazon or Bol that sells a range of products. In the US you basically can be sure that sales-tax varies by zip-code. I worked for a telecom company in the US that sent all their invoices to a specialized company, to have them calculate the tax, before sending them out to their customers. It was too complicated to do that on their own. Also because tax rates can and do change at the whim of some local city-government for example. And as far as I know tax rates in the EU are determined by the country-governments only, which means not very often. [1] https://ec.europa.eu/taxation_customs/sites/taxation/files/resources/documents/taxation/vat/how_vat_works/rates/vat_rates_en.pdf https://ec.europa.eu/taxation_customs/sites/taxation/files/r...
- Silhouette 9y ago
  You're right that many businesses will operate in specific markets, but even then it's still not always clear which rate should apply, and different classifications might apply in different member states or even different areas within the same member state. E-books were a controversial ambiguity when the new rules came in, for example. We could get more into how many technicalities there are in this system, but I think I'm just going to mention that the document you linked there is 116 pages long, which probably says all that needs to be said on that point. As for locations, there are plenty of potential gotchas there too. Would you like to guess the rule if the person who bought an e-book did so while on holiday on a cruise ship in the Mediterranean? And as for not changing very often, I think the shortest notice so far was just over a week from legislating the change to the new rate coming into effect (Greece in summer 2016). To this day, I'm aware of no standardised mechanism for alerting merchants to future changes in the relevant rates, nor any authoritative list of current rates available in a machine-readable format for automation purposes. So while I agree that we shouldn't pretend it's more complicated than it is, the current EU VAT situation is a complete mess full of traps and technicalities to catch out the unwary, and full compliance is effectively impossible. It's a bad system, made by people who don't understand how either digital markets or small businesses actually work.