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When EU manufacturers sell products to other EU countries, they get their domestic VAT rebated, pay no tariffs, and then charge the destination country's VAT. W

When EU manufacturers sell products to other EU countries, they get their domestic VAT rebated, pay no tariffs, and then charge the destination country's VAT. When US manufacturers sell to EU countries, we have no VAT to get rebated, must pay significant tariffs (often 10%), and then charge the destination country's VAT. The end result is US products face a significantly higher total tax burden in EU markets compared to EU-made products, while EU products entering the US face much lower tariffs (often just 2.5%). You can explain the technical mechanics of VAT all day long, but it doesn't change this basic mathematical disadvantage for US exporters. Telling us we "just don't understand how VAT works" is condescending and deflects from addressing this real competitive imbalance.

tobias3 2y ago
B2B sales from the US to the EU have no VAT. B2B sales between European countries have no VAT. If you sell to a consumer you pay the VAT where it is consumed. Please stop spreading lies.
eqvinox 2y ago
Just because someone explains something to you in a condescending way doesn't mean that that thing isn't still true, and doesn't mean you can dismiss it as condescending. Complaining that you don't have any VAT to be rebated is strong proof that you in fact don't understand how VAT works. I'll save you my presumably-condescending explanation and would recommend you find some other resource to learn about VAT…
- rattlesnakedave 2y ago
  Actually I can do whatever I want. This is an internet comments section, not a court of law.
  - eqvinox 2y ago
    Indeed this internet comment section is not a court of law, it is one of public opinion. As of my posting this, you are being judged wanting. As for what you should or shouldn't do, please refer to https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html - if you break these guidelines hard enough, that "shouldn't" will turn into a "can't" at some point. Remember: freedom of speech guarantees only your talking, not anyone's listening or even amplification. (And now we're entirely off-topic, so I'll take my leave.)
spacebanana7 2y ago
I agree with the tariff imbalance causing an unfair trade, but don’t see how VAT affects this? A US->EU seller pays VAT, an EU->US seller pays sales taxes. There’s no unfairness because an EU -> EU seller also pays VAT and a US -> US seller also pays sales taxes. So nobody’s put at a competitive disadvantage.
- rattlesnakedave 2y ago
  Yeah kinda. The article is right, core issue is no ability to reclaim production-side VAT costs like EU competitors can because of how taxes work in the US. My position is the EU should bend a little and help the US out here by either lowering their tariffs to match ours (2.5%) or creating a special mechanism for US companies to reclaim production costs similar to how EU companies can reclaim VAT. It's unreasonable to expect the US to completely restructure its entire tax system just to get 'equal' treatment, especially when we're supposed to be close trading partners. The current system effectively punishes us for having a different tax structure than the EU prefers.
  - ArnoVW 2y ago
    That would be 100% true. Were it not that VAT is not a "European" thing, but more of a "world economy" thing. Check out the distribution map on Wikipedia : https://en.m.wikipedia.org/wiki/Value-added_tax This discussion is a perfect example of everything that is going wrong in the world at the moment.
    - rattlesnakedave 2y ago
      So what?
  - Ekaros 2y ago
    The money goes to USA government. Why should I as EU consumer pay taxes to USA regime? The thing about VAT is that USA consumer do not pay it when they buy from EU. So why would I be expect to pay USA sale tax that they failed refund to their exporters?
aredox 2y ago
You just don't understand how VAT works, and you are not interested in understanding how VAT works, so... You're just wrong, and no amount of babysitting your bruised ego is going to change that.
Paradigma11 2y ago
What taxes are you referring to that US manufacturers have to pay in the US that EU manufacturers do not have to pay in the EU? The only thing you have shown is that things are more expensive in the EU.

tobias3 2y ago

B2B sales from the US to the EU have no VAT. B2B sales between European countries have no VAT. If you sell to a consumer you pay the VAT where it is consumed. Please stop spreading lies.

eqvinox 2y ago

Just because someone explains something to you in a condescending way doesn't mean that that thing isn't still true, and doesn't mean you can dismiss it as condescending. Complaining that you don't have any VAT to be rebated is strong proof that you in fact don't understand how VAT works. I'll save you my presumably-condescending explanation and would recommend you find some other resource to learn about VAT…

rattlesnakedave 2y ago
Actually I can do whatever I want. This is an internet comments section, not a court of law.
- eqvinox 2y ago
  Indeed this internet comment section is not a court of law, it is one of public opinion. As of my posting this, you are being judged wanting. As for what you should or shouldn't do, please refer to https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html - if you break these guidelines hard enough, that "shouldn't" will turn into a "can't" at some point. Remember: freedom of speech guarantees only your talking, not anyone's listening or even amplification. (And now we're entirely off-topic, so I'll take my leave.)

spacebanana7 2y ago

I agree with the tariff imbalance causing an unfair trade, but don’t see how VAT affects this? A US->EU seller pays VAT, an EU->US seller pays sales taxes. There’s no unfairness because an EU -> EU seller also pays VAT and a US -> US seller also pays sales taxes. So nobody’s put at a competitive disadvantage.

rattlesnakedave 2y ago
Yeah kinda. The article is right, core issue is no ability to reclaim production-side VAT costs like EU competitors can because of how taxes work in the US. My position is the EU should bend a little and help the US out here by either lowering their tariffs to match ours (2.5%) or creating a special mechanism for US companies to reclaim production costs similar to how EU companies can reclaim VAT. It's unreasonable to expect the US to completely restructure its entire tax system just to get 'equal' treatment, especially when we're supposed to be close trading partners. The current system effectively punishes us for having a different tax structure than the EU prefers.
- ArnoVW 2y ago
  That would be 100% true. Were it not that VAT is not a "European" thing, but more of a "world economy" thing. Check out the distribution map on Wikipedia : https://en.m.wikipedia.org/wiki/Value-added_tax This discussion is a perfect example of everything that is going wrong in the world at the moment.
  - rattlesnakedave 2y ago
    So what?
- Ekaros 2y ago
  The money goes to USA government. Why should I as EU consumer pay taxes to USA regime? The thing about VAT is that USA consumer do not pay it when they buy from EU. So why would I be expect to pay USA sale tax that they failed refund to their exporters?

aredox 2y ago

You just don't understand how VAT works, and you are not interested in understanding how VAT works, so... You're just wrong, and no amount of babysitting your bruised ego is going to change that.

Paradigma11 2y ago

What taxes are you referring to that US manufacturers have to pay in the US that EU manufacturers do not have to pay in the EU? The only thing you have shown is that things are more expensive in the EU.