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“I’m in the US – what if I just ignore the EU VAT changes?”

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Re: “I’m in the US – what if I just ignore the EU VAT changes?”

#21

Post by humanrebar »

bad_user wrote: post #6

" The change was made because EU wants to get more money from American companies " That is not true - VAT is and has always been a tax for the buyer, not the seller. Of course, having VAT is awful for us - in my country it's an astronomical 24%. But that's besides the point.

> it's an astronomical 24%

That's lower than the income tax rate for a middle class American. Why is this rate astronomical? Are there also high property and income taxes?

EDIT: It's an honest question. I know what a VAT is, but I have no frame of reference for how the overall tax scheme is especially egregious for the individual taxpayer. Some other tax rates (income, property, etc.) are surely relevant. A 24% VAT with absolutely no other taxes sounds nice, for example.

Re: “I’m in the US – what if I just ignore the EU VAT changes?”

#22

Post by goodJobWalrus »

humanrebar wrote: post #21
bad_user wrote: post #6

" The change was made because EU wants to get more money from American companies " That is not true - VAT is and has always been a tax for the buyer, not the seller. Of course, having VAT is awful for us - in my country it's an astronomical 24%. But that's besides the point.

> it's an astronomical 24% That's lower than the income tax rate for a middle class American. Why is this rate astronomical? Are there also high property and income taxes? EDIT: It's an honest question. I know what a VAT is, but I have no frame of reference for how the overall tax scheme is especially egregious for the individual taxpayer. Some other tax rates (income, property, etc.) are surely relevant. A 24% VAT w…

because it's much bigger than sales tax in any of the us states?

Re: “I’m in the US – what if I just ignore the EU VAT changes?”

#23

Post by smackfu »

lultimouomo wrote: post #20
smackfu wrote: post #8

Earlier quoted context omitted.

True, it should say: "EU wants to get more money from transaction for American companies."

I would say it's something different yet: EU wants to hinder rascal states that make money at the expense of the rest of the union taking advantage of their small size: they won't be able to collect VAT for business made in the whole EU just because they offer a lower rate. (I mention the size because the deal is convenient for the state only if its economy would be otherwise very small). It does not matter if the co…

It is definitely a lot harder to use this kind of tax avoidance if you are a European company.

Re: “I’m in the US – what if I just ignore the EU VAT changes?”

#24

Post by tormeh »

Luc wrote: post #16
bad_user wrote: post #11

Earlier quoted context omitted.

Also, the higher the VAT, the higher the tax evasion in those countries. One reason this happens is because many businesses are at the limit of survival and cannot afford to pay. One would think that somebody would get a clue that reducing the VAT would make it more affordable to more companies, but unfortunately law makers are clueless.

Companies don't pay VAT.

They can take the customer's VAT payment and stuff it in their pocket, though. A win-win for everyone except everyone who's not that business.

Re: “I’m in the US – what if I just ignore the EU VAT changes?”

#26

Post by bad_user »

tormeh wrote: post #18
bad_user wrote: post #11

Earlier quoted context omitted.

Also, the higher the VAT, the higher the tax evasion in those countries. One reason this happens is because many businesses are at the limit of survival and cannot afford to pay. One would think that somebody would get a clue that reducing the VAT would make it more affordable to more companies, but unfortunately law makers are clueless.

That's not really how it works. Tax rate and tax evasion aren't really linked. It's about culture and enforcement. Anyway, if your business can't pay tax it should close and you should find something more profitable to do. I guess you can argue that some businesses of cultural or otherwise non-monetary worth should have some subsidies, but as long as the company goal is to "bring in the dough", then that's the dumbes…

> Tax rate and tax evasion aren't really linked. It's about culture and enforcement

And how does that culture happen? Do you think people just get up one morning and decide to do tax evasion?

Of course they are linked - especially in countries in which the private sector is underrepresented and overwhelmed compared to the retired, the unemployed and the ones in the public sector, all of them assisted socially.

In a country in which 60-70% of a company's revenue goes to taxes, such that the government can deliver their electoral alms, it's not so much about bringing in the dough, but more about surviving for one more year with food on the table.

Re: “I’m in the US – what if I just ignore the EU VAT changes?”

#27

Post by pja »

humanrebar wrote: post #21
bad_user wrote: post #6

" The change was made because EU wants to get more money from American companies " That is not true - VAT is and has always been a tax for the buyer, not the seller. Of course, having VAT is awful for us - in my country it's an astronomical 24%. But that's besides the point.

> it's an astronomical 24% That's lower than the income tax rate for a middle class American. Why is this rate astronomical? Are there also high property and income taxes? EDIT: It's an honest question. I know what a VAT is, but I have no frame of reference for how the overall tax scheme is especially egregious for the individual taxpayer. Some other tax rates (income, property, etc.) are surely relevant. A 24% VAT w…

That will be in addition to income and property taxes.

By way of example, UK taxes look like:

* ~40% income tax, first £10k untaxed.

* 20% VAT on most goods (food, books, children's clothes are untaxed, heating fuel is taxed at 5%)

* Annual property tax of around £1000 on the typical dwelling.

* 28% capital gains tax, first £10k untaxed in any 1 year. Dividends are effectively taxed as additional income.

In reality UK taxes are of course much, much more complicated than the rough outline above :)

Re: “I’m in the US – what if I just ignore the EU VAT changes?”

#28

Post by smackfu »

humanrebar wrote: post #21
bad_user wrote: post #6

" The change was made because EU wants to get more money from American companies " That is not true - VAT is and has always been a tax for the buyer, not the seller. Of course, having VAT is awful for us - in my country it's an astronomical 24%. But that's besides the point.

> it's an astronomical 24% That's lower than the income tax rate for a middle class American. Why is this rate astronomical? Are there also high property and income taxes? EDIT: It's an honest question. I know what a VAT is, but I have no frame of reference for how the overall tax scheme is especially egregious for the individual taxpayer. Some other tax rates (income, property, etc.) are surely relevant. A 24% VAT w…

So Finland is one country that has 24% VAT (most are lower.) They have very low property taxes but very high income taxes (up to 30% federal + 20% local.)

Re: “I’m in the US – what if I just ignore the EU VAT changes?”

#29

Post by Sharlin »

humanrebar wrote: post #21
bad_user wrote: post #6

" The change was made because EU wants to get more money from American companies " That is not true - VAT is and has always been a tax for the buyer, not the seller. Of course, having VAT is awful for us - in my country it's an astronomical 24%. But that's besides the point.

> it's an astronomical 24% That's lower than the income tax rate for a middle class American. Why is this rate astronomical? Are there also high property and income taxes? EDIT: It's an honest question. I know what a VAT is, but I have no frame of reference for how the overall tax scheme is especially egregious for the individual taxpayer. Some other tax rates (income, property, etc.) are surely relevant. A 24% VAT w…

You can't compare VAT to income tax, they are very different beasts. And yes, although I can't speak for the GP, in Finland (and other Nordic countries) other taxes are high as well. Not that I'm necessarily complaining, although VAT as a concept certainly has its problems.

Re: “I’m in the US – what if I just ignore the EU VAT changes?”

#30

Post by moonchrome »

humanrebar wrote: post #21
bad_user wrote: post #6

" The change was made because EU wants to get more money from American companies " That is not true - VAT is and has always been a tax for the buyer, not the seller. Of course, having VAT is awful for us - in my country it's an astronomical 24%. But that's besides the point.

> it's an astronomical 24% That's lower than the income tax rate for a middle class American. Why is this rate astronomical? Are there also high property and income taxes? EDIT: It's an honest question. I know what a VAT is, but I have no frame of reference for how the overall tax scheme is especially egregious for the individual taxpayer. Some other tax rates (income, property, etc.) are surely relevant. A 24% VAT w…

>Are there also high property and income taxes?

Yes - this is on top of (high) income tax/capital gains tax, etc.

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