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This law seems so complex. A small company would have to account for 75 different VATs? I don't necessarily disagree with the idea that the VAT money should go

This law seems so complex. A small company would have to account for 75 different VATs? I don't necessarily disagree with the idea that the VAT money should go to the country where the buyer is, but the amount of VATs you'd have to account for makes this a very complex rule. Now, if EU had a unique VAT across all countries, things would go much smoother. I also think it would help a lot to turn EU into a more unified single market, much like US is.

claudius 12y ago
75 different VAT rates is a bit of an overestimate: In general, there are different VAT rates for different product (books/food at 7%, entertainment at 19% etc.), but one business usually one sells one sort of product, so you only have to find and track 27-or-so different rates (: Of course, ideally, we would have the same rate across the entire EU for a given product category, but even then it might make sense to find some way to move it from the business’ country to the customers’ country, given that it is not intended as a tax to fund business operation but the cost of a given population of customers.
- bojanz 12y ago
  You do need to know whose rate you applied. Even if the UK and the French rate are the same, you need to know whether you charged the UK rate or the French rate, and they might change and get out of sync on different dates. So you gain nothing with the fact that some percentages match.
themartorana 12y ago
"more unified single market..." Well, not so fast. The U.S. has been dealing with sales tax issues on the Internet for years. Not only are there 50 different states, but local municipalities in those states also collect sales tax. And ALL of them are mad they're missing out on sales tax from online sales. There has been huge push-back against proposals to require Internet businesses to collect and pay sales tax across the U.S., but the handwriting is on the wall - sooner or later, U.S. retailers won't be able to play the tax-only-with-physical-presence game. Amazon has laws passed SPECIFICALLY FOR AMAZON[0] requiring they collect sales tax. This feels like it's going to get worse before if gets better. [0] http://en.m.wikipedia.org/wiki/Amazon_tax http://en.m.wikipedia.org/wiki/Amazon_tax
pjc50 12y ago
The big change is between accounting for 0 types of VAT (normal UK small business exemption) and more than zero types of VAT. The law is supposed to have a clearinghouse ("one stop shop") per country, to which you forward all your non-local VAT information and they handle it.

claudius 12y ago

75 different VAT rates is a bit of an overestimate: In general, there are different VAT rates for different product (books/food at 7%, entertainment at 19% etc.), but one business usually one sells one sort of product, so you only have to find and track 27-or-so different rates (: Of course, ideally, we would have the same rate across the entire EU for a given product category, but even then it might make sense to find some way to move it from the business’ country to the customers’ country, given that it is not intended as a tax to fund business operation but the cost of a given population of customers.

bojanz 12y ago
You do need to know whose rate you applied. Even if the UK and the French rate are the same, you need to know whether you charged the UK rate or the French rate, and they might change and get out of sync on different dates. So you gain nothing with the fact that some percentages match.

themartorana 12y ago

"more unified single market..." Well, not so fast. The U.S. has been dealing with sales tax issues on the Internet for years. Not only are there 50 different states, but local municipalities in those states also collect sales tax. And ALL of them are mad they're missing out on sales tax from online sales. There has been huge push-back against proposals to require Internet businesses to collect and pay sales tax across the U.S., but the handwriting is on the wall - sooner or later, U.S. retailers won't be able to play the tax-only-with-physical-presence game. Amazon has laws passed SPECIFICALLY FOR AMAZON[0] requiring they collect sales tax. This feels like it's going to get worse before if gets better. [0] http://en.m.wikipedia.org/wiki/Amazon_tax http://en.m.wikipedia.org/wiki/Amazon_tax

pjc50 12y ago

The big change is between accounting for 0 types of VAT (normal UK small business exemption) and more than zero types of VAT. The law is supposed to have a clearinghouse ("one stop shop") per country, to which you forward all your non-local VAT information and they handle it.