Switzerland is in the middle of Europe but not part of the EU.
Just incorporate there.
EU VAT rules make EU startups uncompetitive in a global market
21–30 of 71 posts
Re: EU VAT rules make EU startups uncompetitive in a global market
#22The 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.
Won't happen
1. Countries like UK where the EU is constantly demonized in the tabloids (and hence in the mind of average person who reads this trash) would have their populations screaming murder, hell there already strong calls to leave the EU
2. Countries like Ireland have increased VAT to insane levels as a revenue raising measure to pay for huge deficits run up by banking fiascos and huge welfare/healthcare commitments
Anyways even the US has individual states setting their own sales taxes (or none) albeit at a quite lower average level than anywhere in EU
What is needed is clear exemption EU wide for online businesses selling service (And maybe even goods) for lets say 10 years, to encourage competition There is a reason the likes of Amazon, Ebay etc have appeared in the US first
Re: EU VAT rules make EU startups uncompetitive in a global market
#23Switzerland is in the middle of Europe but not part of the EU. Just incorporate there.
The minimum capital requirement for a Swiss Limited Liability Company is CHF 20,000 and the maximum is CHF 2,000,000. At least 20% has to be paid (in cash or in kind) prior to incorporation.
Re: EU VAT rules make EU startups uncompetitive in a global market
#24Earlier quoted context omitted.
Amazon do not abuse it, they just run shop from an EU country with low VAT rate (Luxembourg) last I checked. And yes the VAT rules really do add alot of overheads on a business and bloat, which companies elsewhere are not subjected to. I have raised this with Revenue in Ireland (pointing at competitors in US, China etc not held back by paperwork) they ignored it and clarified (I wanted it in writing, I recommend ever…
"Amazon do not abuse it, they just run shop from an EU country with low VAT rate (Luxembourg) last I checked." They "abuse" it from the point of view from the countries where they don't pay the VAT.... f.e. the UK would like Amazon to pay VAT in the UK, and not in Luxembourg. So this new law is meant to prevent that, but at the same time waltz over small companies.
UK politicians (judging by recent headlines) also want to leave the EU, or at least threatening to do so if they don't get their way.
They might like/want X but they will have to negotiate and endup with X-Y or nothing, since negotiating something as important as VAT while threatening to leave the club is politically counterproductive.
Re: EU VAT rules make EU startups uncompetitive in a global market
#25Why am I not surprised? The people who run the european commissions are career politicians. Involved in politics from day 1 and rarely have had real jobs. Let alone ran a business of their own. It figures...
Your comment doesn't add very much to the discussion. I could argue that most software engineers have never had a 'real' job either.
Tax across the EU is an important concern, given how large companies can position themselves to take full advantage of differences. People should be thinking about this. Unfortunately, the law is a rather blunt instrument and there's a valid argument that current changes hurt small companies disproportionately more.
Re: EU VAT rules make EU startups uncompetitive in a global market
#26Customer location vat seems to be really easy to abuse. Luxembourg VPN + Post Forwarding = 15% rate on everything that can be ordered online. Compared to maximum vat in EU (Hungary, 27%) that's an enormous difference.
Re: EU VAT rules make EU startups uncompetitive in a global market
#27Switzerland is in the middle of Europe but not part of the EU. Just incorporate there.
The new rules change how VAT on digital services is to be collected. Existing (2014) rules demand VAT to be accounted for based on the location of the supplier, but from Jan 1, 2015, the rules change. After Jan 1 VAT will have to be applied based on the customer's EU location. All digital service suppliers (EU and non-EU) will be affected.
Re: EU VAT rules make EU startups uncompetitive in a global market
#28'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.
You can buy from a non-EU company just fine.
But other than that, there are other allowed bits of information to proof country of consumption, it's just going to be a pain to implement in your check-out process :-/
Re: EU VAT rules make EU startups uncompetitive in a global market
#29This 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.
My understanding is that these rules affect everyone in the world who sells into the EU. It doesn't matter if you are located in the US or South Africa or Australia - you will still be expected to account for VAT and submit the returns.
I have no idea how this will ever be enforced for anyone outside the EU.
Re: EU VAT rules make EU startups uncompetitive in a global market
#30Switzerland is in the middle of Europe but not part of the EU. Just incorporate there.
It doesn't matter. Any company selling digital services in the EU need to follow the new VAT rules. Including US companies, and of course Swiss ones.