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New EU VAT rules change the game for digital businesses

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tomos:
not sure what exactly wraith meant, but the big question is how the EU would stop (or punish) a supplier from outside the EU selling without VAT (?)
-tomos (November 20, 2014, 02:43 PM)
--- End quote ---

I meant, if I as a US citizen sold a digital item, and someone in the EU purchased it and downloaded it- then how would they enforce the strictures of these rules against me as a US citizen?
-wraith808 (November 20, 2014, 02:46 PM)
--- End quote ---

that's what I thought -- but dont have the answers either. But as dr_andus says, they're largely making it work already (via the payment processors).

How is it working in the States -- are there any states successfully implementing their own sales tax for suppliers from outside that state?

40hz:
How is it working in the States -- are there any states successfully implementing their own sales tax for suppliers from outside that state?
-tomos (November 20, 2014, 03:27 PM)
--- End quote ---

Amazon is cooperating. That alone yields a massive amount of tax revenue. Most of the big online merchants are cooperating too.

In the US it's a little more complicated since each state has it's own "sales & use" tax regulations. So there are at least 50 different tax rates and exemptions. Some locales also assess county and local sales taxes on top of the state tax. There isn't a national VAT here. But there are federal excise taxes. States and localities can also assess excise taxes. Excise taxes most commonly get placed on luxury items and commonly used goods and services such as public event tickets, hotel rooms, and gasoline. Cleverly, they're usually built into the price charged to the consumer, so many people aren't aware they exist. Which makes excise taxes very popular with politicians looking for revenue opportunities.

dr_andus:
not sure what exactly wraith meant, but the big question is how the EU would stop (or punish) a supplier from outside the EU selling without VAT (?)
-tomos (November 20, 2014, 02:43 PM)
--- End quote ---

I meant, if I as a US citizen sold a digital item, and someone in the EU purchased it and downloaded it- then how would they enforce the strictures of these rules against me as a US citizen?
-wraith808 (November 20, 2014, 02:46 PM)
--- End quote ---

that's what I thought -- but dont have the answers either. But as dr_andus says, they're largely making it work already (via the payment processors).
-tomos (November 20, 2014, 03:27 PM)
--- End quote ---

I wonder if it's even possible these days to make a cross-border electronic payment without 3rd party payment processors (maybe by using some cryptocurrency)?

But don't worry, we can just stop you from boarding your return flight on your next trip to Paris, until you pay up.  ;) Joking aside, I recall Europeans having been arrested or deported from the US under anti-terror legislation because they had an unpaid parking ticket from donkey's years ago...

wraith808:
I wonder if it's even possible these days to make a cross-border electronic payment without 3rd party payment processors (maybe by using some cryptocurrency)?
-dr_andus (November 20, 2014, 04:51 PM)
--- End quote ---

It's not 3rd party processors... it has to be an aggregation service.  i.e. if I put a pay me now button on my site that goes to paypal, that VAT is not taken into account on the other end AFAIK.

Renegade:
There is currently a push to internationalize the reach of taxation. The whole thing flies under the black flag of "catching tax cheats".

Here's one clip:

http://www.euronews.com/2014/11/14/g20-eyes-tax-crackdown/

One of the key topics that heads and governments will discuss is how to crack down on tax avoidance and tax evasion.

Jean-Claude Juncker will represent the European Commission at an awkward moment.

A series of leaked documents show that major multinationals took advantage of Luxembourg’s lax fiscal rules to trim their own tax bills.

Juncker was the prime minister of the Grand Duchy for 18 years until last year.

Speeches he gave during his tenure indicate that he led the charge in tempting the likes of Amazon and Apple to set up shop there.

World leaders are expected to endorse an OECD plan to ensure company profits are taxed where they are generated.

Euronews’ Efi Koutsokosta spoke with Pascal Saint-Amans, the OECD’s director of tax, who is at the summit on Australia’s east coast.
--- End quote ---

Here's a list of companies doing business in Luxembourg:

http://www.businessinsider.com.au/full-list-every-company-named-in-the-luxembourg-secret-tax-deal-database-2014-11

It's long, so I'm skipping a quote.

The EU is trying to project power beyond it's borders, which is pretty sketchy to say the least.

There was a case in Canada where a fellow refused to collect taxes at his business. Of course he was taken to court, but he won. He claimed that forcing him to collect taxes on behalf of the government was forced labour, and the judge agreed.

So, in at least 1 common law country there is precedent for refusing to collect taxes.

I tried to find the reference again, but I can't manage to find it after almost a half hour. I remember that the case was near Ottawa, though I forget the name of the town.

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