15% VAT is lowest in europe? Holy cow, we (switzerland) have half as much and apart from not being in the EU i'd say we are pretty much in europe.
The European Commission's reform of VAT on internet-delivered services such as software, ringtones and music has been adopted and will take effect from 2015. Europe's finance ministers yesterday agreed the proposed measures, which means that they become EU legislation, shortly to be published in the Official Journal of the …
Having managed a business which routinely reclaimed large amounts of VAT (it comes of food being zero-rated in the UK), I have to say that there doesn't seem to be that much checking.
But that was a paper system.
The mouth-breathing, knuckle-walking, IT Procurement experts of the UK Government are going to have fun with this one.
It's VAT free if you buy your service from companies outside the EU with no presence here.
In contrast if I was to buy an electronic service from say Germany, I would pay their 16% sales tax (because to get vat free you have to convince them your purchase is business related and no supplier wants to faff around with this check for every transaction). I cannot claim it back because it's too expensive to claim it back from Germany, and I cannot simply offset it against my own VAT because it's a different country.
So I can buy from Germany and be hit with a 17.5% penalty now, or I could buy from USA at 0% tax.
Gee I wonder which I will do?
FYI "15% VAT is lowest in europe?" they set the lowest limit at 15%, some of the new countries wanted to come in at a much lower tax rate, but the inefficient ones set a lower limit as a condition for joining. I'd like to see it driven down as a result of competition too.
Personally, I'd like inter-company vat to be zero rated with a duty on the buyer to pay vat for non business related purchases. I.e. none of this 'fail to properly check the vat number and supplier can be liable' sh*t the UK started doing. (Doesn't that also fix carousel fraud?)
I'd like to fill in a vat return that charges the vat on sales direct to customers at the rate of their home country, then I'd like to fill in *1* vat return in my *home* country that covers *all* EU vat returns and pay *1* cheque to *my* vat office which they then send the appropriate contribution to each country.
For electronic services, they have to be zero rated, because we're competing with the world and USA has them zero rated. They can't usually distinguish the home country for an electronic transaction anyway!
You're quite right...and that's the very reason Lewis Hamilton decided to move to Switzerland, oh sorry wait no...it's because "Over there people don't come up to you, they leave you alone and give you space"
...who's he trying to kid? It does beg the question though why Amazon, Skype, Paypal et al didn't move to Switzerland!?!
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"I am particularly proud of the new procedure to allow businesses to electronically claim VAT refunds from other Member States in which they are not registered but have paid VAT," - Good to see another non-ambiguous, large IT project with a long deadline being drawn up. What could possibly go wrong?
This would also effect the likes of play.com, as at moment they pay ZERO vat on most of there items that they import in to the UK. This is because most there items are below threshold to pay VAT on imports from Island of Jersey, Channel Islands.
Dear Anonymous: re. your 'et al' "not" moving to Switzerland, what about IBM, Google on the corporate side, Tina Turner as a classic/classy celeb example (who lives about 2 km from where I live, but I digress :-).
You also missed the veiled reference to Switzerland in the comment "This is particularly true of services which can be supplied at a distance where, as a result of current rules, businesses have been locating in countries with lower VAT rates. As a result, Member States have seen their revenues eroded," he said."
It's a reference to the complaint the EU has lobbed at Switzerland that some Kantons have a much lower tax rate than some EU nations. Strangely enough, this debate seems to be exclusively aimed at Switzerland (which is not in the EU for that aspect) but not at other EU states which do the same which suggests there is more to it than the EU likes to discuss. The EU complaint is interesting, because their "suggestion" amounts to abandoning the ability of each Kanton to set and charge its own tax rate - i.e. abandon the ery federal principles on which Switzerland is based. IMHO Switzerland should not move as much as a millimeter on this matter, which is a view publicly supported by the Luxembourg PM. I have seen some interesting answers, though, which suggest setting a base rate which is much lower than at present, i.e. resolve the complaint but make the problem worse. I think the EU should be a bit careful here because compliance could *really* hurt..
I'm not sure what you think you've got in common with the US, but the only things I can think of are bad things. You're also fooling yourself if you think you'd be allowed to become a 51st state. They'd let you in on their term, chew you up and spit you out.
As for those who said it's impossible to order stuff from the EU without paying VAT, that's not been my experience. I often order from other countries and just give my VAT number. Never had a problem.
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