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I'm pretty sure the 'EU' solution for this is just that you are responsible for collecting VAT in every single country, regardless of any nexus. It's not actual
by Sebguer 5y ago
I'm pretty sure the 'EU' solution for this is just that you are responsible for collecting VAT in every single country, regardless of any nexus. It's not actually really any simpler, but it does mean that taxation is no longer tied to a business presence. Specific tax laws still vary between countries.
- autarch 5y agoI'm no expert on VAT, but it seems like this is a lot more like the sales tax case, where you are required to pass the cost on to customers. I'm sure companies prefer to avoid this, but it doesn't seem like it'd be nearly as strong a disincentive as having to pay business income tax in another state.
- Sebguer 5y agoOh, fair, I hadn't thought about it from that perspective. I think the challenge is that you still have to know the VAT nuance (and categories) for every country you operate in, and failure to do so correctly will result in you getting a tax bill, regardless. I don't think it's actually any less burdensome than the US' system, but I'm also not an expert on either system (just adjacent exposure working around it).
- withinboredom 5y agoSorta. If you’re a small company, you can just charge your home VAT. Registering for MOSS and paying out all VAT based on location of the sale would be something you do with your accountant when you get a little bigger.