3 ms·

I'm unfamiliar with the nuances of sales tax rules in relation to the Crown dependencies (IoM; Channel Islands), but would one way around this be for sole trade

I'm unfamiliar with the nuances of sales tax rules in relation to the Crown dependencies (IoM; Channel Islands), but would one way around this be for sole traders and micro enterprises (or even SMEs, if they wish) to incorporate their trading entity in one of the Crown dependencies, allowing them to disregard this messy requirement?

mootothemax 12y ago
Would one way around this be for sole traders and micro enterprises (or even SMEs, if they wish) to incorporate their trading entity in one of the Crown dependencies In theory, the EU requires you to collect VAT from EU citizens regardless of where you yourself are based. The new rules state that you should charge VAT at the customer's local rate, so being based in a tax haven wouldn't - again, in theory - do you any good. How on earth they ever intend to enforce any of this against the rest of the world is anyone's guess.
- tormeh 12y ago
  Blocking payment from EU accounts to accounts of firms failing to comply, I guess. That's the standard way to act against firms from shady countries. There are generally cooperation agreements if you're from a developed economy.
- MistahKoala 12y ago
  > In theory, the EU requires you to collect VAT from EU citizens regardless of where you yourself are based. Well I'm certainly interested in how they see themselves exercising their power extra-territorially. I'm inclined towards letting them swivel on my middle finger. HMRC themselves say that VAT isn't chargeable on sales outside of the EU, so doesn't that run contrary to what you're saying about the EU requirement for global VAT collection?
pjc50 12y ago
This was the old loophole used by Amazon to sell CDs from Jersey without paying VAT. It got closed somehow. Incorporating in Delaware, or having a subsidiary/reseller in the US front the actual sales, seems like a better option.

mootothemax 12y ago

Would one way around this be for sole traders and micro enterprises (or even SMEs, if they wish) to incorporate their trading entity in one of the Crown dependencies In theory, the EU requires you to collect VAT from EU citizens regardless of where you yourself are based. The new rules state that you should charge VAT at the customer's local rate, so being based in a tax haven wouldn't - again, in theory - do you any good. How on earth they ever intend to enforce any of this against the rest of the world is anyone's guess.

tormeh 12y ago
Blocking payment from EU accounts to accounts of firms failing to comply, I guess. That's the standard way to act against firms from shady countries. There are generally cooperation agreements if you're from a developed economy.
MistahKoala 12y ago
> In theory, the EU requires you to collect VAT from EU citizens regardless of where you yourself are based. Well I'm certainly interested in how they see themselves exercising their power extra-territorially. I'm inclined towards letting them swivel on my middle finger. HMRC themselves say that VAT isn't chargeable on sales outside of the EU, so doesn't that run contrary to what you're saying about the EU requirement for global VAT collection?

pjc50 12y ago

This was the old loophole used by Amazon to sell CDs from Jersey without paying VAT. It got closed somehow. Incorporating in Delaware, or having a subsidiary/reseller in the US front the actual sales, seems like a better option.