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Agreed. I hail from Poland, so I'm aware. This is one reason why I live abroad at least 185 days each year and run a company in HK and not in Poland - helping others do the same, BTW. One 4-page Company Profits Tax Return once a year. Need I say more…?
@aglodek... yes... I still understand the scope of jurisdiction, the rest of your comment is a general "here's my ideology of the world" thing which I've already alluded to
2 things and I'm done.
HMRC (UK tax revenue) can argue they're owed tax if a significant part of your business is in the UK. Think they're bothered about some "virtual" address you set up in Singapore? lol.
I do hope the EU reaches an agreement with other countries regarding tax. This isn't the wild web, you know. Ideally I'm hoping they backdate it for 5 years too. A level playing field is fair for everyone
Actually, it's principles of International Public Law, something they teach in Law School
Agreed. With you and HMRC here
Okay, good luck with that
In the meantime, welcome to relocate to HK anytime you decide that you don't want a level playing field, but a competitive advantage instead! Embrace the Dark Side, Luke! 
)
No need to set up in HK. It's easy enough to set up a trust fund and take 85%+ and pay close to zero tax. See, if they did that, they could absorb the VAT into their price.
Besides, VAT is for consumers and I don't like pollution. I'm in the B2B space, most clients are VAT registered.
If your HK company decides to open a physical pizza shop in any country, i am sure it will have to comply with tons of local regulations - food safety, tax, etc. Including collecting tax (VAT) from the local customers and paying this tax to the local tax authorities.
Now with the new VATMOSS makes providing virtual goods / services follow the same rules as if you were to open a local shop in the country where your customers are. I don't like it... but it's how it is. Eventually you need to comply if you want to do busyness with customers from EU countries.
Absolutely! Yep. In fact, I would need to establish a local company for that, with all the localized PITA that entails
Absolutely… not!
For now you probably can get away with it. But in the future if the tax authorities start seeing significant revenue opportunity in this i am sure they will try to enforce it in some way or another. For instance - by banning customers from purchasing from a company that is not compliant with the local tax laws. They are already doing this with online casinos - casinos which do not have a license issued by the state are not allowed to operate with local customers. Their websites must be blocked by the ISPs. The list of websites to be blocked is updated weekly - currently over 500 online casino websites are blocked.
Does the EU law allows/oblige ISPs to store access logs for blocked sites? It should be a major privacy violation... Actions like that (blocking websites) will only make access more difficult, but a user still can access those websites using proxies/vpn and spend their money where they want.
No, no access logs required. Just that the websites must be blocked for the ISP's customers. There is a fine for the ISP if a website from the list is not blocked - i think it was 5000 EUR per offense.
Most activity is probably being logged anyways regardless of what public claims are made, ISP blocking has been active in UK for some time but only for court rulings against torrent/streaming sites etc.
I think I'll start bypasseucasinoblock.com. How many languages actually exist at EU? /s
For those interested - here is a list of the betting websites that must be blocked here - http://www.dkh.minfin.bg/document/847
Every one of us will smile and nod while a customer uses our services to break their local laws. The entire world is not only as strong as the weakest law in the weakest country, because many of us live in nations where we are not subject to the weakest laws and therefore have no respect for them. You might only go as far as to say that you do not respect a nation that makes it illegal to speak against the state religion, I go one step further and say that I do not support the religion of the state... I do not support the EU's taxes and will not until the day my government says I must (spoiler alert: won't be in my lifetime, watch). The EU has no authority over me, and I do not subject myself to the laws of other nations because "maybe one day a treaty will exist." I follow today's laws today.
And that, my friends, is why MXroute will neither pay VAT nor submit any customer information to the EU. Customers within the EU are still welcome to sign up, because I have no interest in assisting your government in doing it's job.
@jarland you can afford to do this, because you are too small to matter. But the case is very different for your employer - they have too much at stake to be able to gamble about this.
By the way the process of these VATMOSS filings doesn't include submitting any customer information as far as i know - just an amount of VAT collected, per country. Not per customer.
Ghost is pretty small too as I understand it. I don't blame them for making that choice, I doubt their customers are major corporations within the EU so they probably have nothing to lose. I mean, it's just blogging software.
VAT is a tax on the consumer. Is it reasonable for the EU to want to impose VAT on all electronic services? Yes it is. Is it reasonable to force/insist that overseas companies collect it for them? No.
Our company is located in Hong Kong, with our servers, office, and infra located in Hong Kong. I am familiar with EU VAT/MOSS laws but we are not about to start charging VAT to our EU clients. And why should we?
It is upto the EU to implement policies in their OWN jurisdictions to collect the tax due on overseas services. Otherwise it would be perfectly REASONABLE to charge the relevant EU tax authority a fee to handle all this BS. It's extra work, and for what? It's not practical to ask every non-EU company to start collecting VAT for sales made to EU residence.
The correct thing to do would be to insist that EU residence declare in a tax return all their overseas purchases, and then have them pay the tax themselves. Why don't they do that? (I think we all know why).
Agreed. Americans send drones and bomb the hell out of civilians in foreign countries to enforce their laws. In fact, they enacted US laws stipulating this is not murder, nor war crime, hence perfectly "legal" as long as some covert functionary signs off on it in a little black book of operations (figuratively speaking). I mention such an extreme case only to make a couple important points:
where government enforcement is concerned, these days, anything is possible…
by interpreting away the fundamental principle of legal jurisdiction, they have let a very bad Jin out of the bottle!
principles of law are universal, meaning they apply equally to laws pertaining to enforcement of taxes as well as other interests, with major consequences to follow in the forseeable future!
they US have shown the way and other states are following suit… forget the stupid EU tax law being discussed here… just think of what Putin or Assad can legally do with this new interpretation of sans jurisdiction, as long as they have the political will and perceived firepower to back it up (which they have)!
Selling to a resident of an EU country is not the same as the country of where you do business. The EU says that all companies SHOULD collect VAT on their behalf but why should this burden be shoved onto the service providers? All this additional red tape incurs costs, and what right do they have to impose it? The EU has the right to impose taxes on it's OWN citizens, and that is what VAT is. It is a sales tax. The tax needs to be applied to the buyer, and collected in the EU. Ridiculous to expect foreign companies to do all the work.
Consider the following scenario. You may run a very popular website, generating revenue through advertising. You, your website and advertisers may be based in the US, but your visitors may be European. Can the EU then say you are generating income from EU citizens and that you owe income tax to the EU? Is that fair or reasonable?
Legally I don't believe the EU have a right to force companies to collect VAT. I know the larger hosting providers do because the EU have some leverage in this respect. In practice, only the large companies get targeted and forced to collect VAT, but just because they have leverage doesn't mean they have a legal right to do so.
@randvegeta, I just play devil's advocate as there's a lot of anti-establishment views around here for the sake of it, and saying 'pay tax' is a counter argument.
It's fine, I get how non-EU companies are not obligated to do anything here.
Though, it's confusing when people talk about what the EU should do. No, what people should do is follow the consensus of an agreed law. Or in cases where you're outside the jurisdiction... don't.
Just to play devil's advocate a little more... will you be requiring/requesting the services of European law agencies should their be a massive and continual DDOS attack emanating from there? Only on behalf of your European VAT paying customers? You're out of their jurisdiction and they only need to act in the best interest of the citizens of their own?
Easy to have a selective view of how law should be applied.
But in all seriousness, I would probably do the same (as a small company).
If DDoS is emanating from Europe, EU law is being broken within it's jurisdiction. It is precisely authorities in the EU who should be contacted and who are responsible for policing their own citizens. It's not selective at all.
EU laws apply in the EU. If an EU law is being broken in the EU, even if the victim is outside of the EU, it is still the within the jurisdiction of the EU.
A more accurate analogy would be, if DDoS were emanating from China, then would I ask the EU for help? No I would not. DDoS is essentially a criminal offence in the EU, but the crime is being committed outside of the EU so it has nothing to do with the EU.
What if I and my servers are located in the EU and the attack is coming from China? Do I contact the authorities in the EU? What the hell are they going to do about it? The offence is still being committed overseas and nothing will/can be done.
Ahhh, but you'll still be requiring a phone call to that state funded EU institution to make them aware of it. They don't grow on trees you know!
I'm sure you'd be outraged if they treated your problem as 2nd class.
So an increasing amount of private spending is done online, and untaxed, apparently... you know, because lots of people use from the likes of Amazon, all the way down to small outfits like Ghost. I'm sure they'll find other means of recompense.
And it does still seem easier to ask business to collect VAT rather than customers... imagine the mess 600 million people would make dealing with VATMOSS.
Unless there is such law/treaty in the country the company belongs to that says so, that would be actually be illegal.
F'ckin A! Couldn't agree more.
Name a country where that'd be the case. The only thing I can think of is within the EU discriminating against other EU customers... but it's a common market.
Besides, swathes of sites block China outright from accessing their servers.
Couldn't have said it better!
>
Perfect response!
Is the US good enough?
You're saying that in the US, it's illegal not to accept foreign customers?
No, but I do accept that I stated it poorly. My intended point is that the US does not require a US company by law to collect taxes for a third country. It's not illegal for a US country to choose to do so, that part was a mistake of me saying it that way.
OK, got you. I fully understand that. Half the conversation seems to be circling the drain of what jurisdiction means, yet everyone gets it.
Anyhoo, the response is pretty unequivocal, don't pay it if you don't have to. Sound business decision.
As an aside, poor decision by Ghost to make this a public conversation, IMO.