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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?”

#91

Post by humanrebar »

moonchrome wrote: post #30
humanrebar wrote: post #21

Earlier quoted context omitted.

> 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.

Good to know. Since I don't know what country you're talking about, can you give me some percentages to help me understand better?

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

#92

Post by Ecio78 »

This sentence is wrong

"The change was made because EU wants to get more money from transactions for American companies – or to force them to move more operations to EU to get VAT reductions."

and it can be understood by just comparing the table right above, where you can see that for an American company based in the US (last three Non-EU rows) nothing will change, so no American company would be forced to move to EU.

What's true, on the other hand, is that this law would not allow some companies, including some big American ones (like Amazon) to take advantage of putting their European HQ in countries with lower VAT rate, like Luxembourg (15% til this year[1]), and so selling (invoicing) products to endusers for a lower price.

Same can be said for right after about this exact part "a perfectly legal strategy to pay less taxes". VAT is not paid by the company but by the private user that buys the product/service. So they didn't pay less taxes thanks to this, but probably sold more product. If we want to discuss about saving taxes, we can discuss about tax rulings for this companies, though...

I am not a fiscal/economic guy but this girl got it all wrong...so I stopped reading at this point.

[1] due to this law, Luxembourg will raise its VAT from 15% to 17% trying to compensate the money loss caused by this change (afaik it won't be enough)

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

#93

Post by fargolime »

bjt wrote: post #87
fargolime wrote: post #61

Earlier quoted context omitted.

> The last three have some form of nationalised healthcare though, which the US does not. Plus a much better retirement plan. In the US you can wake up in a hospital after someone rear-ended you, to find you are bankrupt and going to become homeless, even when you had the best insurance. And unless the stock market returns 8% most people are going to have a rough retirement. In the US you're lucky to get 3 weeks vaca…

No country mandates 6 weeks. The highest is Austria with a total of 38 days between paid vacation and holidays. Most of Europe is around 30 days. See http://www.bostonglobe.com/business/2014/08/13/one-few-count... . Scroll about halfway down for a nice infographic.

30 days / 5 weekdays per week = 6 weeks

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

#94

Post by [deleted] »

Major_Grooves wrote: post #65
coob wrote: post #55

Earlier quoted context omitted.

It's going to force people to use marketplaces/providers. Probably a startup opportunity.

In fact lots of people assumed that the marketplaces would take the heavy lifting here. However most of them are US-based and have said they won't be the ones to take care of this. However, part of the problem is the authorities assuming that everyone sells through marketplaces, and that marketplaces would be the ones to tackle the issue. You'd be surprised how many people this is going to affect who are just selling…

[deleted]

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

#95

Post by fargolime »

b3n wrote: post #83
fargolime wrote: post #61

Earlier quoted context omitted.

> The last three have some form of nationalised healthcare though, which the US does not. Plus a much better retirement plan. In the US you can wake up in a hospital after someone rear-ended you, to find you are bankrupt and going to become homeless, even when you had the best insurance. And unless the stock market returns 8% most people are going to have a rough retirement. In the US you're lucky to get 3 weeks vaca…

How does the tax rate influence the amount of time you may take off work?

Not directly, but higher taxes tend to go hand-in-hand with the gov't ensuring a higher average standard of living.

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

#96

Post by mbesto »

djrogers wrote: post #73
joosters wrote: post #58

Earlier quoted context omitted.

How is VAT regressive or hidden? For a start, I'd say that just about every EU citizen is aware of it. Plus, prices in shops have to show VAT-inclusive prices to end customers, unlike some states in the USA where sales taxes can get magically added on to the final bill. Secondly, it's not regressive because the more goods and services you buy, the more you get taxed. If I buy a luxury yacht, I'll end up paying more V…

I'd argue that showing pre-tax prices and charging tax at checkout makes the tax burden much more obvious to most consumers. Showing only the post-tax price on the tag hides the proportions of the tax vs item cost.

At the end of the year why does it matter what my VAT burden is anyway? As long as I have enough cash in the bank to pay for the things I need, and my bank account isn't negative at the end of the year, then I'm fine right? What behaviors are you trying to support?

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

#97

Post by fargolime »

colechristensen wrote: post #86
fargolime wrote: post #61

Earlier quoted context omitted.

> The last three have some form of nationalised healthcare though, which the US does not. Plus a much better retirement plan. In the US you can wake up in a hospital after someone rear-ended you, to find you are bankrupt and going to become homeless, even when you had the best insurance. And unless the stock market returns 8% most people are going to have a rough retirement. In the US you're lucky to get 3 weeks vaca…

Things which aren't true: >In the US you can wake up in a hospital after someone rear-ended you, to find you are bankrupt and going to become homeless, even when you had the best insurance. >unless the stock market returns 8% most people are going to have a rough retirement Your health and car insurance covers exactly what it says it covers, and retirement plans aren't a mystery. In America you take personal responsi…

Your health insurance doesn't cover non-covered expenses.

That retirement plans aren't a mystery doesn't negate needing 8+% returns to comfortably retire.

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

#98

Post by mrb »

jkulmala wrote: post #13
smackfu wrote: post #8

Earlier quoted context omitted.

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

Thanks for the correction, I updated the blog post.

jkulmala, the other part of your claim is wrong: "The change was made [...] to force them to move more operations to EU to get VAT reductions". After Jan 1, 2015, there will be zero VAT-related incentive to move to the EU, because any company (EU or non-EU) will get the same VAT reductions: the VAT in the customer's country.

Edit: yes, I meant VAT "reductions" not "payments". My point holds though: there won't be any more VAT incentives to move.

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

#99

Post by pc86 »

fargolime wrote: post #85
pc86 wrote: post #74

Earlier quoted context omitted.

> A hospital can charge you for anything and you're legally obligated to pay it. Categorically, unequivocally wrong. Hospitals cannot just make up charges. They cannot bill you for procedures/tests/services you did not receive (and if they do, you are not "legally obligated to pay it"). I know the anti-US healthcare circle jerk is pretty strong here, but we don't need to just make things up in order to prove a point.

> Categorically, unequivocally wrong Hyperbole much? They can charge you for services / products rendered and which aren't covered by insurance, and they can charge any price they want and you're legally obligated to pay it. Of 3 times I helped my parents with processing their hospital bills, it was over $10K in non-covered expenses each time.

Is your complaint that a hospital can charge you for a service that was rendered, that they perform services you might have to pay for, or that they assume you're not interested in rate-shopping your surgeon?

Yes, you are legally obligated to pay for services rendered. I think you'll be hard pressed to find someone to argue the opposite, though.

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

#100

Post by zo1 »

toyg wrote: post #3
mastef wrote: post #2

It seems like this is actually a step in the proper direction. The removal of 'VAT based on seller country' from the system, standardizes now everything towards 'VAT in buyers country' Now after talking with other SaaS owners it seems we're one of the 'few' non-EU companies that actually complies with this - however that choice is rather due to the provider we use. We comply with the rules by using a payment reseller…

> It seems like this is actually a step in the proper direction. No. A step in the proper direction would be admitting that VAT is a regressive hidden tax on employees, and abolish it or replace it with more transparent taxation of real wealth. Until that happens, we're all just jumping through hoops so that European politicians can tax the working man while hiding behind meaningless "consumption" codewords.

>"[...] would be admitting that VAT is a regressive hidden tax on employees"

Could you elaborate a little more on that? I'm curious of your reasoning.

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