Serving the Quantitative Finance Community

 
User avatar
Paul
Topic Author
Posts: 6604
Joined: July 20th, 2001, 3:28 pm

VAT

June 3rd, 2019, 7:54 am

Does everyone know about EU VAT rules? And if you run a business do you obey the rules rigorously, even if outside the EU?

For example if you are a US-based company and sell goods/services to a customer in the EU do you add the correct VAT rate for your customer's country and then send that amount to the tax people in that country? 

Obviously it's just a protection racket by the EU to pump up the prices of imports. But I'm surprised no one seems to care, either because of the effect it has on sales or because of the paperwork burden.

Or maybe non-EU companies don't bother selling to the EU, just like many non-EU websites are no longer accessible from the EU. 
 
User avatar
ISayMoo
Posts: 2332
Joined: September 30th, 2015, 8:30 pm

Re: VAT

June 3rd, 2019, 9:01 am

I seldom have problems buying stuff from outside the EU.
 
User avatar
katastrofa
Posts: 7440
Joined: August 16th, 2007, 5:36 am
Location: Alpha Centauri

Re: VAT

June 3rd, 2019, 1:54 pm

I'm not sure, but I think the general rules will remain the same (e.g. if you provide services from a non-EU country to an EU business/institution, the client pays VAT in their country - like with the reverse charge between the EU countries). Only the procedures may change (e.g. of claiming the VAT refunds). CMIIW, though.
 
User avatar
figaro
Posts: 7
Joined: October 3rd, 2005, 5:49 pm

Re: VAT

June 11th, 2019, 1:13 pm

There is a VAT threshold. If you sell below the minimum threshold in any given country in any given year, you don't care. GBP 85k or so in the UK currently.

Above the threshold, you have to register for VAT and pay it, even as a foreign entity. How they enforce it, who knows.
 
User avatar
Paul
Topic Author
Posts: 6604
Joined: July 20th, 2001, 3:28 pm

Re: VAT

June 11th, 2019, 2:54 pm

It is Evil.
 
User avatar
Cuchulainn
Posts: 20254
Joined: July 16th, 2004, 7:38 am
Location: 20, 000

Re: VAT

June 11th, 2019, 4:11 pm

https://ec.europa.eu/taxation_customs/e ... les-vat_en

VAT A-Z.
  • Identify which supplies are classed as digital services.
 
User avatar
SWilson
Posts: 83
Joined: February 13th, 2018, 5:27 pm

Re: VAT

June 14th, 2019, 7:50 pm

Obligations are all shifting to the sellers.   The trend is as a seller no matter where you sell, the authorities want you to collect and remit regardless of what geographical area you're doing business. This can be a major administrative burden, especially for smaller scale sellers that sell to many areas.
 
User avatar
ISayMoo
Posts: 2332
Joined: September 30th, 2015, 8:30 pm

Re: VAT

June 23rd, 2019, 1:41 pm

As often with EU regulations, they benefit large corporations over small enterprises.
 
User avatar
Cuchulainn
Posts: 20254
Joined: July 16th, 2004, 7:38 am
Location: 20, 000

Re: VAT

July 20th, 2021, 3:35 pm

Car dealers importing vehicles from Japan post-Brexit

https://www.rte.ie/news/2021/0720/12362 ... rs-brexit/

However, since Brexit you now have to pay the UK VAT rate of 20% on cars being imported from there, on top of the Irish VAT rate of 23%.
Car dealers here say it now works out cheaper to import European cars from Japan, who like Ireland have right-hand drive vehicles, as they are not subject to the 20% VAT charge, unlike the British cars.
 
User avatar
bearish
Posts: 5188
Joined: February 3rd, 2011, 2:19 pm

Re: VAT

July 21st, 2021, 5:34 am

Car dealers importing vehicles from Japan post-Brexit

https://www.rte.ie/news/2021/0720/12362 ... rs-brexit/

However, since Brexit you now have to pay the UK VAT rate of 20% on cars being imported from there, on top of the Irish VAT rate of 23%.
Car dealers here say it now works out cheaper to import European cars from Japan, who like Ireland have right-hand drive vehicles, as they are not subject to the 20% VAT charge, unlike the British cars.
You have to look at it from the only point of view that matters in this context. Because used luxury cars from England (of course, not made in England, that would be silly) can no longer be profitably sold to the Irish, they will now remain in England and thus push down the prices of used luxury cars there, making them affordable for the masses. And the proud brexiteers who sell them to buy new ones were never in the game for the money anyway, so they don’t much care.
 
User avatar
Paul
Topic Author
Posts: 6604
Joined: July 20th, 2001, 3:28 pm

Re: VAT

July 21st, 2021, 7:53 am

Good, for once we are all agreed, VAT is stupid! Wikipedia says it is a German and French invention.
 
User avatar
Collector
Posts: 2572
Joined: August 21st, 2001, 12:37 pm
Contact:

Re: VAT

August 12th, 2021, 2:43 pm

"VAT is stupid!" or evil?
 
User avatar
Paul
Topic Author
Posts: 6604
Joined: July 20th, 2001, 3:28 pm

Re: VAT

August 27th, 2021, 11:35 pm

There are 16,000 tax jurisdictions in the US (state, county, city,...). On average there are about 15 changes to the rules every week. 
 
User avatar
bearish
Posts: 5188
Joined: February 3rd, 2011, 2:19 pm

Re: VAT

August 27th, 2021, 11:52 pm

And you thought VAT was problematic…
 
User avatar
Paul
Topic Author
Posts: 6604
Joined: July 20th, 2001, 3:28 pm

Re: VAT

August 28th, 2021, 12:28 am

I use VAT to mean any sales tax.

But yes, I don’t know why anyone would start a business in the US. Crazy paperwork, rabid lawyers, and no healthcare.