Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

EU VAT rules make EU startups uncompetitive in a global market

rachelandrew.co.uk

Post reply on HN
Print view View original

51–60 of 71 posts

Re: EU VAT rules make EU startups uncompetitive in a global market

#51

Post by Radim »

vegancap wrote: post #16

Why 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...

The top EU folk get a massive monthly budget for assistants and consultants = expert help (for EU MPs, this "extra staff budget" is to the tune of 30k USD per month [1], though often abused to fund family members/friends, just as you'd expect).

So indeed you should be surprised (and enraged) if you think they're not doing a good enough job.

The fact they're not experts has been factored in and provided for by the system.

[1] http://en.euabc.com/word/814

Re: EU VAT rules make EU startups uncompetitive in a global market

#52

Post by nraynaud »

NicoJuicy wrote: post #33

Why not just use a European VAT in case a product isn't bound to a specific country, although the VAT should be "donated" to the country. VISA, Mastercard, Paypal and etc should have systems in order to donate it to the right country (they know the owner of the card). Don't have a solution yet for Bitcoin though...

That's what we should do, but there is no common economic policy in Europe, and this is collected for the national budgets, not for the European budget. We are talking about shitload of money, half of the French State tax revenue for example.

We are also talking about shitload of fraud.

Re: EU VAT rules make EU startups uncompetitive in a global market

#53

Post by vixen99 »

amirmc wrote: post #25
vegancap wrote: post #16

Why 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 comp…

I disagree; there is a very fundamental problem around when unelected (unsackable) comfortably situated people with golden pensions who do not create wealth, sit in rooms devising intricate schemes for taxing wealth creators and moreover are completely isolated from the effects of their actions. And the problem is exacerbated by the absence of a signed-off auditors' account for the EU over something like fifteen years. Business leaders in this situation would be in prison by now. It is simply a scandal.

I'll leave software engineers to say whether or not they've ever had a 'real' job.

Re: EU VAT rules make EU startups uncompetitive in a global market

#54

Post by honzzz »

chrisdew wrote: post #42
pja wrote: post #38

Earlier quoted context omitted.

There's supposed to be a one-stop shop system to avoid this. Whether it's going to work properly on launch day is another question!

The MOSS (one stop shop) is only available to VAT-registered entities. Making it available to all would solve the problem for me.

But you will be WAT-registered entity as soon as you register in a first country. I still think the law is badly written but I think it does not require registering in all 28 EU countries.

Re: EU VAT rules make EU startups uncompetitive in a global market

#55

Post by duckingtest »

Taxamo wrote: post #46
duckingtest wrote: post #26

Customer 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.

One of the key elements of the new rules is that merchants must collect two pieces of non-conflicting evidence. And the onus of proof is on the merchants' shoulders. They must keep searching until they have two pieces of evidence that do not conflict. If IP address, for example, conflicts with cc billing address then more evidence will be required from the customer.

CC billing address is the simplest one to falsify, just use an anonymous prepaid card (they accept all addresses).

Still, not many people will go out of their way to exploit this loophole.

Re: EU VAT rules make EU startups uncompetitive in a global market

#56

Post by derickr »

Taxamo wrote: post #46
duckingtest wrote: post #26

Customer 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.

One of the key elements of the new rules is that merchants must collect two pieces of non-conflicting evidence. And the onus of proof is on the merchants' shoulders. They must keep searching until they have two pieces of evidence that do not conflict. If IP address, for example, conflicts with cc billing address then more evidence will be required from the customer.

And on top of that, you can be audited by each EU country's tax authority as well... something I have not seen too many people worried about. I think it's an important thing that is being overlooked.

Re: EU VAT rules make EU startups uncompetitive in a global market

#57

Post by moomin »

dublinclontarf wrote: post #20
acd wrote: post #10

The 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.

Is tax haven another term for tax competition?

I'd argue that tax competition is where one jurisdiction uses tax law to attract substantive business to their country (e.g. a factory, a call centre, a movie). I'd call it a tax haven is where there's no actual change in the operation of business except for a couple of lawyers and accountants.

And that's kind of the point. If you buy from Amazon in the UK, the goods are already stored in a warehouse in the UK, the consumer is in the UK, the guys doing the deliveries will be UK citizens. It's a UK operation.

Re: EU VAT rules make EU startups uncompetitive in a global market

#58

Post by chrisdew »

honzzz wrote: post #54
chrisdew wrote: post #42

Earlier quoted context omitted.

The MOSS (one stop shop) is only available to VAT-registered entities. Making it available to all would solve the problem for me.

But you will be WAT-registered entity as soon as you register in a first country. I still think the law is badly written but I think it does not require registering in all 28 EU countries.

Are you sure about this, I thought HMRC needed a UK VAT registration number?

Re: EU VAT rules make EU startups uncompetitive in a global market

#59

Post by danmaz74 »

I'm a big fan of EU integration, but sometimes the EU Parliament shows a complete lack of understanding about the needs of small online companies (including startups). I understand pretty well that the goal is to stop Amaon et al to game our VAT system, but you can't impose the same kind of complication to small businesses.

Re: EU VAT rules make EU startups uncompetitive in a global market

#60

Post by honzzz »

chrisdew wrote: post #58
honzzz wrote: post #54

Earlier quoted context omitted.

But you will be WAT-registered entity as soon as you register in a first country. I still think the law is badly written but I think it does not require registering in all 28 EU countries.

Are you sure about this, I thought HMRC needed a UK VAT registration number?

Honestly, I am not sure about anything related to this law. I am also not UK-based so I don't know haw exactly is the EU directive implemented in UK.

I live in the Czech Republic and here you can become so called "person identified for VAT" which (if I understand correctly - IANAL) enables you to use mini one stop shop for selling over the border while internally (selling inside the country) you remain in non-VAT regime.

Our law is based on the same EU directive as yours so I suggest you check whether your law also offers something like that.

It is still more complicated than it should be (I think the whole concept of VAT is bad) but I hope it is not as bad as registering in all EU countries.

I will also consider 3rd party services like http://www.taxamo.com - I am not related to them, I am just sharing that because you might find it useful.

Post reply on HN