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VAT is imposed only once, albeit at multiple levels in smaller amounts. In effect, the VAT is a more hasslesome sales/services tax. Imported items are subject
by rprasad 14y ago
VAT is imposed only once, albeit at multiple levels in smaller amounts. In effect, the VAT is a more hasslesome sales/services tax.
Imported items are subject to higher VAT, but usually only once...if importation was a way to avoid VAT, the EU would not have any manufacturing facilities at all because it would always be cheaper to manufacture in Asia.
- DanBC 14y agoVAT is different to import duties. There will be a customs duty to pay on imported goods over a certain value (as well as VAT (chargeable to the end user, rather than each person in the chain.)) VAT (and import VAT) are easy enough - there's a few different rates so as long as you're careful describing the goods it's okay. But customs duty is complex. Each item has a commodity code, and that code has its rate of duty. There are 14,000 different commodity codes. (http://www.hmrc.gov.uk/customs/tax-and-duty.htm http://www.hmrc.gov.uk/customs/tax-and-duty.htm)
- wisty 14y agoI've heard in some countries, it's cheaper to buy a cordless drill with a battery pack, then the battery pack alone, because batteries have a huge duty, but cordless drills (even including batteries) aren't.
- tonyedgecombe 14y agoI wouldn't say VAT is that easy, for instance I'm in the UK but if I sell enough into Germany then I'm obliged to register for VAT in Germany, and the same again for each of the other EU states. Then there is additional paperwork to fill for every EU sale, each needs the customers VAT number and if it is wrong the paperwork gets rejected.
- rprasad 14y agoVAT is "easy" in the sense that it is easy to figure out, but it is difficult in the sense that the administrative burdensome exceeds the burden associated with a sales tax by many orders of magnitude.