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Originally Posted by MaDalton
can you explain? cause I dont see what you mean
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As a Dutch corporation we can sell in the USA without adding VAT -- selling in the EU we have a VAT obligation on all sales.
If you sell to a Dutch customer for example there is a VAT obligation if you sell to a USA customer there is no VAT obligation.
Now, if you are selling labor or finished product produced in a lower wage EU nation-state (read: Eastern Europe) then we are comparing apples and oranges just the same as USA sellers of goods produced in the neighboring nation of Mexico would not be a fair comparison (other than the possibility of doing so -- that is another subject altogether).
You can allocate that taxation to account for government subsidized prices or lower sales, use or VAT rates -- for example the VAT on plain food in The Netherlands is:
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Dutch VAT rates
The Dutch standard VAT rate is 19% and applies to most goods and services. The Dutch rate is average in comparison to other EU member states (see under the rate in other EU - member states).
A 6% rate applies to for example food and beverage for human consumption (except for alcoholics), water, pharmaceutical products and medical aids for persons and animals, books and magazines, passenger transport, hotel accommodations, entrance for sports events, theatres, cinemas, music performances, zoos, etc.
The Dutch Value Added Tax (VAT) system
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- So, if i buy a Coke in The Netherlands my VAT is 6%
- If I buy a Coke in Michigan, USA in the grocery my sales tax is 0% but if I buy a Coke at the zoo the sales tax of 6% is in the cost -- food and beverage in restaurants and concession foods (Kiosk) are taxible.
Where is the end cost less for a Coke?
- A bottle of water at Schiphol Airport (Amsterdam) is 3€
- A bottle of water at Hartsfield Airport (Atlanta) is $2.75 (2.22€)
There is 8% sales tax charged at Hartsfield Airport on the bottle of water so the net price is $2.94 (2.40€)
Where is the end cost less for a bottle of water? Now it is the product and not the tax rate that influences the cost.
When I say consider price I also mean overall cost of the product to the customer.
For domestic transactions, in all of the USA, are subject to a sales or use tax collected by retail sellers then remitted by that seller to the state or remitted directly to the buyer's state, at its state' rate, by intrastate buyers respectively, to their home state (i.e.; New York State or California, etc.); that rate is 5% to 8% in most states whereas the VAT tax rate in the EU nation-states is 18% to 28%.
There is a product acquisition cost that is higher to an EU business or person of 13% to 20%.
Your mistake is not considering the buyer's cost and businesses are large buyers of goods. Buying goods for business end use can be very substantial expenditures. I can build a factory (land and improvements) for a lot less in the USA than in most countries in the EU. I will pay sales tax on the building materials in the USA where I will pay EU VAT on the materials AND Labor.
https://www.google.com/search?q=EU+V...erty+transfers
There is no sales tax on the transfer of real estate or the levying of business rents in the USA.
However, if I compare costs for this factory construction between Paris and New York City metro areas the costs are not that much different.