Online tax: Is Europe on crack?
 

I think the EC has been spending a little too much time in Amsterdam. I know this has been posted before but it really seems that it's for real

http://www.tax-news.com/asp/story/st...toryname=12027

All companies based outside the EU which sell digital products into the EU will need to become compliant with the EU's Directive on the Taxation of Digital Sales; for companies with a significant volume of sales to individuals and unregistered traders, it will be necessary to register for VAT in one or more EU member states.

This is severly flawed. It will drastically separate the markets. Some if not most US and worldwide merchants will opt to simply stop taking EU orders digitally forcing the market to move to EU merchants. This will fuck the EU customers in the ass.


July 2003 lol. That's 1 month to implement, register and get ready to collect and pay up VAT.

Good luck with this EU. Really.

yes,this is fucked up

why?

wouldn't it mean less competition for EU companies which means more sales and higher profits for them which means more money kept in europe which means less revenue going into the US?

no, EU co. will have to pay the tax as well

most companies in the EU already pay VAT

what's the big deal?

it just means companies from outside the EU contributing to EU tax coffers too

I guess if you want access to a market of half a billion people, that's the price you have to pay

yeah what soulrebel said + not all EU merchants will provide the same services as US merchants denying e-services to EU customers so this is how they get fucked.

Imagine you're in EU and want to subscribe to some online music site and they only take US customers and you can only get the content from that site. You're fucked.

Thats a serious pain in the ass to implement.

How do they enforce it? Like if a paysite owner doesn't bother charging the tax to EU customers, what are they going to do about it?

only temporarily

what I said was correct - it will decrease competition for EU merchants creating space in the market allowing for more revenue, profits, and money to be kept in the EU since EU companies will fill the gaps

start a company in Holland!!!! :thumbsup just a few days work

nick,what's the tax rate in Netherlands?

The proposed changes. It is currently proposed that when a business sells services (not goods) to EU consumers, and the value of such sales is more than 100,000 euros (£62,000 / $93,000) in a 12-month period, that business should be made to register for EU VAT liability.

Since I am a UK business with both adult and non-adult interests registered for VAT. Hence I already pay the tax, to me this is just levelling the playing field.

The US, being a net exporter of online services, is against this tax. The EU, being a net importer of digital sevices is by and large for the tax. It will be interesting to see whether any retaliation is forthcoming.

And pay twice the tax, than if you start one in Spain, hehe.
Isn't the base rate of tax around 40% there, its about 20% here.

And the sales tax rate is lower here *16% against 19 in holland*, so a Spanish firm becomes cheaper than a Dutch firm even if they charge the same net amount for the product.

check this out
http://www.pwcebiztoolkit.com/

Because the VAT rate in EU member states varies considerably, the VAT payable by an established business can be greater than that payable by a non-established business but :?

It is also possible to choose a country where the VAT rate is lower than all or most of the other EU countries

and we are talking from 13-25% VAT

a flat VAT across the EU does make the most sense I feel

even a flat rate is problematic

let's say you sell the SAME product online and offline

assume that the flat VAT is 20%

if you live in UK where the VAT is 17.5% (i think) then you have to deal with an extra 2.5% :glugglug

Here ya go
Austria 20%
Belgium 21%
Sweden 25%
Finland 22%
Denmark 25%
France 19.60%
LuxLuxembourg 15%
Spain 16%
Portugal 19%
Greece 18%
UK 17.50%
Ireland 21%
Netherlands19%
Germany 16%
Italy 20%

El pres thanks

now let's get the scenario of NO flat VAT,

Luxembourg will get everyones business heh

The trouble with setting up in Luxembourg is straight away the taxman is wondering, what have you got to hide!
and the admin costs would be extremely high.

Germany's got some bad laws regarding porn, if you had an affiliate registered there, could they demand that your sites followed their laws.

I'll go and talk to my accountant in the morning and see what he says about it, I've read some articles and it says that a company from outside the EU can have a subsidiary or other affiliate act on its behalf.

Maybe I can set up a registered office for US companies here.

Yup, this is insane. How do they plan to enforce it is a good question.

Another one is, for example, the good ole, Canadian gov't wants CDN businesses to charge GST on worldwide sale of paysite access - seen here on other threads. Then the EU wants their share of the tax from an eu customer.

15% in Canada - 15% in Europe ??? WTF is going on here?

USA or some offshore island seems like the best place to be.

There have been moves in Brussels for quite a long time now for a uniform VAT rate accross the EU and this is only a very short way away. If you are a EU company this is no big deal as most of us are already liable for VAT now in one way or another. :2 cents:

magicmike, the VAT will apply for EU consumers even if you do not operate a EU co.

yeah, they try to pass it at 15%

not too much, not too less :glugglug

Thinking about it... Didn't I read a while back that some US states are speaking of on-line taxation of some kind too? This is a multi billion $$$ business so its really only a matter of time.

Don't forget to add the regular income tax! jesus... you people are fucked in the ass.

Assume a customer makes $100. Income tax rates hover between 30-60% in Europe. You have $50 left... then you pay a VAT of 20% of the $50 you have left which in reality is an additional 10% of total income. That leaves you people $40.

No wonder your economies suck. $5 a gallon gas to boot! I read that almost a third of the Swedish economy is black market unreported underground in a World Bank report.

Is mortgaging your child's future for your current well-being and quality of life worth it? Don't you think it strange that each generation of college graduates in Europe only aspire to ace the government service exams to get a cushy job?

You also need to understand that the EU and the US have a cross border tax exemption scheme where tax only has to be paid at either one side of the Atlantic or the other... Not both sides. :2 cents:

educate yourself before digging a hole for yourself

VAT is only paid on certain products/services

and if you're a business it's redeemable anyway

and this has to be one of the dumbest paragraphs I've read here

and that's saying something

People have been coming here for legal advice for ages? I suppose it will be accounting advice as well now? :glugglug

Damn, I find myself agreeing with SexySarah, that's scary. :1orglaugh

online TAX would apply to software as well according to PWC.

if you live outside Europe and the same product is offered both in Europe and States, you won't order the product from Europe because most probably the VAT will make it more expensive.

am i missing something?

You need to get the advice of your accountant as this is not how it will work.

yes, these are just hypothesis


WARNING: if you start getting accounting and tax decisions based on what I post you are fucked. :WARNING

I hold an EU passport. The VAT is structured so that the last user pays. The VAT is paid on most consumables.

My comments still hold true. There is little reason to want to improve oneself living in Europe. People are happy with what Daddy Government offers. People expect the government to supply everything. Wealth is taxed to the point of trying to redistribute it.

These are societies that place more emphasis on labor input above capital input while forgetting that labor input is easily transferred to another area. Socialisim is still in full swing. Labor thinks that if you reduce the work week from 38 to 35 hours that this will spur new hirings to replace the three hours. Then they go on strike when they find out that those hours were farmed out to Eastern Europe or China.

VAT has absolutely nothing to do with your passport. :2 cents:

Lots of products in Holland do have 19% VAT and some 6%. Only a few don't have any taxes, not many at all! Overall Giorgio_Xo
has a very good point I vote for him as President!

first time I heard this...whoa.

pass the pipe

Feel free to ask all my nieces and nephews and their friends. Every summer they come to live with me so they can intern at Silicon Valley companies or I meet with them regularly in my trips to France, Italy, and Spain.

I stand by my comments. Europe can not afford spending on social programs at this current level without bankrupting itself. You are falling behind and will become irrelevant economically if you don't change your thinking as a society.

Spain has changed since the fall of Franco.