EU VAT rules make EU startups uncompetitive in a global market
rachelandrew.co.uk
EU VAT rules make EU startups uncompetitive in a global market
1–10 of 71 posts
Re: EU VAT rules make EU startups uncompetitive in a global market
#2This is hugely important. The rules themselves are designed to stop people like Amazon abusing the system (and believe me, they abuse it), but there's no provision for smaller companies, no one stop shop for dealing with the VAT authorities. It's going to be a disaster for SaaS startups.
Re: EU VAT rules make EU startups uncompetitive in a global market
#3This is hugely important. The rules themselves are designed to stop people like Amazon abusing the system (and believe me, they abuse it), but there's no provision for smaller companies, no one stop shop for dealing with the VAT authorities. It's going to be a disaster for SaaS startups.
It's actually going to benefit these larger companies if people are forced into selling their products via App Stores, Amazon etc. because doing so via their own store becomes impossible.
We're already VAT registered. We already do cross border sales and we have no clear guidance on how to implement this.
Re: EU VAT rules make EU startups uncompetitive in a global market
#4'If the customers IP address and billing address conflict you are going to have to halt the purchase unless ...'.
So how do I, as a customer, go about buying something online while not at home? The 'unless' doesn't appear to unravel the mystery.
Re: EU VAT rules make EU startups uncompetitive in a global market
#5Sure, looks like there will be some pain and confusion in the short term, but in the long term, how does this really hurt EU startups in the global market?
Presumably the various payment solutions are going to adapt to this, simply because it costs a lot less to to implement whatever is necessary than to just give up the EU market.
Re: EU VAT rules make EU startups uncompetitive in a global market
#6This is hugely important. The rules themselves are designed to stop people like Amazon abusing the system (and believe me, they abuse it), but there's no provision for smaller companies, no one stop shop for dealing with the VAT authorities. It's going to be a disaster for SaaS startups.
There is a one stop shop[0]. The main problem is that there's no longer any VAT threshold for smaller companies (atm you can avoid VAT registration if you're earning less than £81,000)
https://www.gov.uk/register-and-use-the-vat-mini-one-stop-sh...
Re: EU VAT rules make EU startups uncompetitive in a global market
#7Sure, looks like there will be some pain and confusion in the short term, but in the long term, how does this really hurt EU startups in the global market? Presumably the various payment solutions are going to adapt to this, simply because it costs a lot less to to implement whatever is necessary than to just give up the EU market.
Creating a smooth path to checkout and removing obstacles is really important in terms of conversion rates. Having to ask for information that people are going to see as very intrusive during that checkout flow is highly likely to cause cart abandonment.
We get people already complaining that we make them create an account to buy software - and we use the accounts for other things such as support and license management. How much more will people feel they are being asked for too much information if all they want to buy is an ebook?
Re: EU VAT rules make EU startups uncompetitive in a global market
#8This is hugely important. The rules themselves are designed to stop people like Amazon abusing the system (and believe me, they abuse it), but there's no provision for smaller companies, no one stop shop for dealing with the VAT authorities. It's going to be a disaster for SaaS startups.
There is a one stop shop[0]. The main problem is that there's no longer any VAT threshold for smaller companies (atm you can avoid VAT registration if you're earning less than £81,000) https://www.gov.uk/register-and-use-the-vat-mini-one-stop-sh...
This same one stop shop that GDS said was unusable and could not go live? [1]
[1] https://gdsdata.blog.gov.uk/vat-mini-one-stop-shop-service-a...
Re: EU VAT rules make EU startups uncompetitive in a global market
#9This is hugely important. The rules themselves are designed to stop people like Amazon abusing the system (and believe me, they abuse it), but there's no provision for smaller companies, no one stop shop for dealing with the VAT authorities. It's going to be a disaster for SaaS startups.
There is a one stop shop[0]. The main problem is that there's no longer any VAT threshold for smaller companies (atm you can avoid VAT registration if you're earning less than £81,000) https://www.gov.uk/register-and-use-the-vat-mini-one-stop-sh...
The effective removal of the threshold is another important issue. I'm trying to raise awareness of the impending issue for those companies who are VAT registered.
A good example would be a design agency who also wants to launch a product. Other than freelancers most small agencies are likely to be VAT registered, so they will need to use the MOSS and collect the required data.
Re: EU VAT rules make EU startups uncompetitive in a global market
#10The problem is that some countries are within the European union but are tax havens. Luxemburg is such a country with 15% VAT but most other countries have 20%+ VAT.
The solution should be to have one VAT level which is higher than 15% and the same in the whole union.