EU: service prices must include VAT

[Curt]

According to the latest news letter from Agnitum:

According to the recent EU regulations, service providers are obliged to indicate prices including value-added tax (VAT)

Good news!

Only, now I need to understand  what is a service, and what is not?

[bgd77]

From Wikipedia:
"A service is the diametrically opposed non-material counterpiece of a physical good."
http://en.wikipedia.org/wiki/Service_(economics)

For example: transportation, healthcare, education are services while a good is something material that you purchase: a car, food etc.

Is there any economist that can explain better?

[f0dder]

Curt: I'd say that phone companies, internet service providers, airlines etc. are offering services as opposed to goods. I thought the plane ticket VAT thing had already been fixed a while ago, though?

[Curt]

- not really. From a purchase today from SWREG/DigitalRiver:








Right away I am not sure how to complain to SWREG.

[bgd77]

Is the site (or the store) in the EU? The only EU countries that have a VAT of 25% are Denmark and Sweden. If I am not wrong, any site/store sells with the VAT and obeys the rules of the country in which it resides.

[Dormouse]

I've noticed a number of digital retailers adding on VAT at too high a rate; they never seem to tie the level of the VAt to the country they are selling to (and most of them are US based). I've always assumed that it's a way for them to profiteer and I've steered clear.

[f0dder]

Is the site (or the store) in the EU? The only EU countries that have a VAT of 25% are Denmark and Sweden. If I am not wrong, any site/store sells with the VAT and obeys the rules of the country in which it resides.

I think Curt's complaint with swreg is that they don't indicate the price with VAT before the final checkout screen - this is a bit misleading.

[bgd77]

I think Curt's complaint with swreg is that they don't indicate the price with VAT before the final checkout screen - this is a bit misleading.

You are right. But if the company is not in EU maybe it is not obliged, by the law of the country in which it operates, to show VAT until checkout.

[Dormouse]

Very few show VAT before the final checkout. Always makes it uncertain whether they will be adding VAT at all, let alone what rate it's at. But how can they show it before the end when they don't know what country the customer is from until the details are added at checkout?

But 25% is extortionately higher than most EU customers should be paying.

[Curt]

But 25% is extortionately higher than most EU customers should be paying.

    we've long gotten used to this, we Danes and Swedes!

f0dder was of course right, I was annoyed with not being told about the VAT much earlier. This purchase was via Bits du Jour who very well knows about the 'new' EU regulation; Bits du Jour should inform their clients (both 'us' and 'them'), I think.