VATMOSS

[drplokta]

So does the VATMOSS craziness mean that while I'm on one of my occasional tax-avoidance day-trips to buy cigarettes and wine in Belgium and France respectively, I can also pop over the border into Luxembourg, connect to a local wireless data network, and stock up on ebooks at 3% VAT instead of 20%? Even while still using my UK credit card and

Comments

[drplokta]

As far as I know you can legally import a car from Luxembourg for your own use, yes, the the EU has even insisted that the car manufacturers supply continental dealers with right-hand drive models to facilitate the process. But you won't save much money, as Luxembourg's standard VAT rate is 17% -- the 3% rate just applies to ebooks.

[drplokta]

I buy beer, I just don't drink it. But I mostly stock up on northern French beer at the Auchan supermarket in Coquelles, near Calais (and pretty much next door to one of Majestic Wine's two Calais outposts).

[autopope]

It's high time that we had global agreement that electronic sales work like physical sales, with the regulations and tax rates of the country where the retailer is based applying to the sale, and with territorial rights based only on the retailer's location.

The whole cause of this mess is Amazon claiming to be based in Luxembourg (VAT rate: 3%; AMZN turnover around £120M, 200 staff) and that their UK facility (VAT rate: 20%; turnover around £6Bn, 5000-7000 staff) is a "shipping facility" (and the same everywhere else in Europe).

I agree that the proposed "cure" is worse than the disease, but that doesn't mean the disease doesn't require treatment, does it?

[kevin_standlee]

True, but a big problem here is that there's no minimum turnover required, and that's going to destroy a bunch of small businesses.

I encountered a small version of the same thing while selling merchandise promoting the Montreal Worldcon in California. At least there the permits are free and the record-keeping relatively simple, but the envelope from the state agency that collects the tax cost them more to mail to me than I paid in sales tax.

[autopope]

True, but a big problem here is that there's no minimum turnover required, and that's going to destroy a bunch of small businesses.

Yup, exactly. If the threshold was set at the same as the mandatory VAT registration threshold for the UK nobody would be making any fuss at all (that's £81,000 -- if you're turning over that much, you can probably afford an accountant or a VAT agent!).

AIUI the problem is that not all EU countries have a lower threshold for VAT registration. And the new regs require you to effectively register in all EU countries you do business in, or use the VATMOSS site as a proxy for doing so.

Maybe we need some sort of reverse double-taxation treaty, only for VAT rather than income, for low-turnover enterprises? i.e. register for and pay VAT in your own country if and only if your turnover is below a certain fixed threshold and you're not part of a larger corporate structure.