3 ms·

EEA might demand their citizens to pay the VAT, but how can it demand/enforce this e.g. for some company in Vietnam? What happens when EEAians buy goods in Viet

by zerr 3y ago

EEA might demand their citizens to pay the VAT, but how can it demand/enforce this e.g. for some company in Vietnam? What happens when EEAians buy goods in Vietnam with EEA bank's credit cards, e.g. in a not-tiny restaurant? Is the VAT cancelled because they are physically in Vietnam for the time being?

cfn 3y ago
I have been in this situation but selling to the States. Nothing happens if you sell to end users who pay with credit card but as soon as you have a large sale to a company or institution they will ask for all kinds of documents that force you to register properly and pay taxes.
- zerr 3y ago
  Strange, US companies force you to register in US and pay US taxes? Otherwise, registering in your country is a normal thing.
  - cfn 3y ago
    Your client will ask you for a document (can't remember the details) and to get it you have to register with the IRS. If you pay taxes or not, I'm not sure, the sale was too small and I just dropped the client.
croemer 3y ago
Good question and I had to Google the answer. Until now enforcement was apparently lackluster but EU is tightening up: "As of January 2024, Payment Service Providers (PSPs) have a new role in tackling VAT fraud. They need to report cross border payments to CESOP (the Central Electronic System of Payment Information), a large digital hub. This disclosure is specifically for the purpose of combating tax fraud. It’s focused on business activity, doesn’t record payment reasons, and has strong privacy restrictions." https://www.paddle.com/blog/eu-vat-compliance-for-us-software-sellers https://www.paddle.com/blog/eu-vat-compliance-for-us-softwar... This is a good link from the article: https://vat-one-stop-shop.ec.europa.eu/system/files/2021-07/vatecommerceexplanatory_notes_28102020_en.pdf https://vat-one-stop-shop.ec.europa.eu/system/files/2021-07/... EU VAT law is very well documented, compared to say German income tax law. It's actually fun to understand if one can use such a word here.

by zerr 3y ago

cfn 3y ago

I have been in this situation but selling to the States. Nothing happens if you sell to end users who pay with credit card but as soon as you have a large sale to a company or institution they will ask for all kinds of documents that force you to register properly and pay taxes.

zerr 3y ago
Strange, US companies force you to register in US and pay US taxes? Otherwise, registering in your country is a normal thing.
- cfn 3y ago
  Your client will ask you for a document (can't remember the details) and to get it you have to register with the IRS. If you pay taxes or not, I'm not sure, the sale was too small and I just dropped the client.

croemer 3y ago

Good question and I had to Google the answer. Until now enforcement was apparently lackluster but EU is tightening up: "As of January 2024, Payment Service Providers (PSPs) have a new role in tackling VAT fraud. They need to report cross border payments to CESOP (the Central Electronic System of Payment Information), a large digital hub. This disclosure is specifically for the purpose of combating tax fraud. It’s focused on business activity, doesn’t record payment reasons, and has strong privacy restrictions." https://www.paddle.com/blog/eu-vat-compliance-for-us-software-sellers https://www.paddle.com/blog/eu-vat-compliance-for-us-softwar... This is a good link from the article: https://vat-one-stop-shop.ec.europa.eu/system/files/2021-07/vatecommerceexplanatory_notes_28102020_en.pdf https://vat-one-stop-shop.ec.europa.eu/system/files/2021-07/... EU VAT law is very well documented, compared to say German income tax law. It's actually fun to understand if one can use such a word here.