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Comments
@>; @ricardo said:
I think you are arguing for the sake of arguing. I cant believe you really believe any of what you just said.
Practically speaking however it is non-sense to think it is easier for overseas companies to collect VAT for the EU. Since the EU cannot force the majority of companies to comply, it seema to be a voluntary thing. Why not simply expect your citizens to fill out a tax return and pay the taxes due. It may be nearly impossible to check but it would at least be a criminal (tax evasion) act to not. Just as it would be criminal to understate ones income to evade income taxes.
No matter what anyone says, it is not a legal requirement for any non eu state to collect vat on behalf of the eu, and therefore should not be treated as a criminal offence.
In the case of amazon, ebay, google and other large intl. tech gianta the situation is different as they all operate offices and have staff in places like the UK.
I think he whole reasoning behind this law is that you have to pay VAT in the country you are doing business in, same as with actual goods. If you open a fruit stall in Germany, you have to pay VAT there. They now say if you sell digital services in Germany, you also have to pay VAT there. So nobody is exempt. Not Ghost, not MXroute, nobody. Moving to Singapore is not going to make help [them] avoid VATMOSS.
Doesn't mean I personally think this is an absolutely ridiculous law, but it's the way it is.
I think I've kind of covered why I'm saying what I'm saying.
We have indeed established there's no legal requirement.
I implied separate to that, that they should feel morally obligated. I've also said that it's a sound business decision, and I would do the same.
The moral argument stems from the idea that taxes pay for things that society needs. We (err) elected lawmakers who've decided that VAT should apply to EU consumers. The proceeds of this allow for a society to function (including any law institution that would deal with said DDOS). Given how the conversation has pretty much stalled with the legal angle, and simply getting to understand that we all know what jurisdiction means, it seems fairly pointless to pursue this angle any further.
Perhaps you're right, but I'd rather deal with several hundred thousand entities than several hundred million. At the very least, an EU consumer navigating to amazon.com or amazon.co.uk will at least have VAT applied equally, as far as I can tell. Short of monitoring people online, it seems easier to tax at the point of sale.
TBH it's all symptomatic of a fast changing world and slow changing laws. C'est la vie.
Companies don't pay VAT, consumers do.
For me in this instance. Ghost has their hosted service located in the EU, therefore they should be complying due to their physical presence. If they move their servers to Singapore too or at least out of the EU then that's different.
Like the repeaters here keep saying, if you are providing a service to someone in the EU and are neither located in or have servers in the EU then fine. Nobody can force you. For all you dollar service providers outside the EU I don't really care if you pay or not, you have bigger issues to be honest.
Leverage over companies like DO get's mentioned. Is it leverage or is it that they have a substantial physical presence in London, Netherlands and Germany so should comply.
This should really be about those firms resident in or having a physical presence in the EU.
And as @Ricardo said previously, the disadvantage it puts on those in the EU having to provide a service at a higher cost than others. But that's something for the EU to discuss which is in progress, albeit slow as usual.
Huh? Now we make up laws?
It's more like extortion. The taxman can easily put the shit on medium-sized companies. So it's like "do this for me, or I'll bleed you where I can".
That's true. Of course, the EU doesn't care about it at all.
Let me cite the Lotus Case:
The International Court of Justice consider that an act or omission which is not prohibited under international law is permitted. So, a state can exercise jurisdiction within its territory over acts that occur outside its territory as long as there is no rule in international law that expressly prohibits that State to do so.
In other words, EU actually HAS THE RIGHT to enforce VAT colection from EU customers outside their borders and can exclude companies outside it's territory from doing business with their citizens (that should be inside of EU borders at the moment of the transaction) if one does not complain with the law, as long that doesn't exist a rule on international law saying that they can't.
Deal with it.
Only thing we have to deal with is stupidity. You, for example, didn't even realize that what you quoted says the exact opposite of what you wrote beneath it.
It boils down to 'substantial presence' (and customers)
In the same way DO started charging Canadian tax when they opened in Toronto.
I'm not a native speaker, but my interpretation is the "default" interpretation and was used multiple times by the ICJ.
In the VATMOSS case, the law enforcement is being made inside the EU territory. EU isn't using their power to close business or take any other action outside their borders, they're using their sovereign to regulate acts that has been made by EU citizens, inside their territory. An they really can impose a penalty on their citizens even if they do not complain with their law when outside the EU territory, when they come back ("It does not, however, follow that international law prohibits a State from exercising jurisdiction in its own territory, in respect of any case which relates to acts which have taken place abroad").
EU isn't forcing any company outside their borders to collect VAT from customers. If you don't want to, it's your problem. But EU has all the rights to block their citizens from making business with companies that don't collect.
There is no need for interpretation. It says it explicitly: it may not exercise its power in any form in the territory of another State
The EU cannot legally force non-EU companies to collect VAT. If the EU has a treaty with a country though that says otherwise, then of course it's a totally different thing. But for our purposes, we assume with companies in countries where no such treaty exists.
We totally agree on this. The EU can do whatever it wants with its citizens. The problem is that there is a patently mistaken idea floating around that a (say) US company is required by US law to collect EU VAT for EU citizens.
Indeed, that is certainly the way I see it.
To the company, who then pays it to...? Exactly :-)
That is, only after having subtracted the VAT they have paid based on the company's location and circumstances.
I would, and do, decline to accept the VAT payment and instead would ask they pay that to theit tax man themselves
.
You know what would probably happen if we starr collecting VAT? We would probably get taxed on it as it would appear as income. Then we need to explain to our own tax man how its not income, but taxes we must pay to some other country. Yeah I wouldnt fall for that either.
I think it would be reasonable to charge a tax collection fee. To cover things like transaction charges, and the time involved in handling all the paper work. Hey it could end up costing the EU more.
No, no, no. VAT is what the consumer owes the government. The company acts as an unpaid collection agency. The company does not pay VAT to the government. It collects dues of others.
And then pays it to the government.
How else would the government get it, would the company not pay it to them?
VATMOSS is by all means a way to discourage people to sell digital goods and services to those located inside the EU, there's no other way to put it.
You can do it if you want to, as you can just not collect VAT. It's up to you
The company just act as a collection agency and only if wants to.
Well if we're outside of their jurisdiction without a tax treaty imposing the collection on us, that's kind of their problem, isn't it? Just like any other country that passes a law and wants people in other countries to comply.... the burden of enforcement is on that government. Just like any other law passed in any country, mine doesn't have to say "We'll enforce it for you within our borders." Mine won't, either, I guarantee it.
If the EU wants to ban their citizens from doing business with companies that do not comply, that is well within their rights, but also not something I'm scared of. China blocks half the internet... and is in turn much of the reason why LEB VPS companies even exist... because the citizens refuse to fall in line. None of us are crying out in defense of their government either... because that matter is easier for us all to agree on.
As for how, just like we do here in the states. The individual can declare their purchases on their tax return at the end of the year and the government says "Here's your bill for what you did this year."
But but how till the EU and UK catch up to the NSA's spying technology without you collecting VAT on $15/y email packages?
They'll have to find a way to do without my tens of dollars per year to fund their billion dollar agencies.
International VAT collection... just another way to attempt to retroactively win the revolutionary war. Not today, Britain!
We seem to have a different understanding of the word "pay". Paying is not the general tranfer of money - the security company that moves money from a client's company building to a bank does not "pay" the bank. It moves money owned by a third party.
In the same sense, a company does not pay VAT to the government. Paying requires an act of transaction. In the case of VAT,the transaction is between the consumer and the government.
@Jarland has covered me on this.
In other news, scientists announced today that "number of fucks not given about whether the governments of the world collect enough taxes" will be used as a reasonable approximation of infinity.
That's why I included a link to the dictionary. Like I said before, it does depend on your circumstances, but in my case it's definitely pay. I owe the government something, I need to transfer the money, and they will come and get it if I don't pay it to them.
Doesn't mean that VAT isn't still a consumer tax, but liability is with the company selling something (at least where I live).
Indeed, for those complying with VAT MOSS, you have to make reasonable efforts that the customer is indeed outside the EU and the scope of VAT if they claim to be. e.g. if all your customers are using Google's Ireland VAT number or claiming they live in Somalia when their IP and debit card clearly indicate they're in the UK...
The advice I was given (from an accountant) was two pieces of corroborating evidence are required. I've settled with geolocation and card details.
I saw. It says what I wrote but I was being polite
The company's liability is to deliver the collectibles. Just like the security firm has the liability to actually deliver the client's money to the bank instead of stealing it. At no point does the collected money become the ownership of the company. Contrast this with paying income taxes. In paying income taxes, a company pays with capital it actually owns.
The thing with the EU VAT is that it has no legal way to force a non-EU entity to involuntarily become a collection agency. Sure, the company can opt to. But it is not required to by law of the country it belongs to.
That depends on the country your business is located in and the individual circumstances.
It's just playing over words though. The effect is still the same: a business is liable to charge VAT in a country based on that country's laws. The company then has to pay (or "transfer") that VAT to the tax authorities/government. That is, if they can't keep the VAT themselves (which may also be the case).
That's the thing: the EU now (apparently) says they can. Referring back to that fruit stall example here: if you sell digital services to people located inside the EU you are obliged to charge VAT and pay that to the relevant tax authorities/government.
Again, I agree this is totally ridiculous and I'd be curios to see it hold up in court. But this is what the EU law says at this point and it's what companies have to deal with (unfortunately).
How so (in regards to this convo)? My understanding is that VAT is a consumer tax throughout the whole EU.
Words matter. Otherwise, we'd have less. And especially regarding laws, words matter a ton.
The whole point is that a US business is NOT liable by US law to collect EU VAT. If there is a US law that says so, obviously I am wrong. If not, obviously I am right. To the best of my knowledge, I am right.
Do they really? All I see is that they say that they expect you to.
Obliged by who? If you are a US company, the only government you are obliged at is the US one. Certainly not the Russian one for example.
The EU law is totally valid for the EU entities. It is not law outside of the EU, excluding possible billateral treaties, but I don't know of any such on that matter with the US.
Fortunately I know how the law works in my country and it wouldn't, not without a change in law. A significant one at that. Not growing up here you might not understand the sentiment from the outside, but paying taxes to the British would be an exceptional insult to Americans who value their heritage, one worthy of rewriting the end of an old story in the history books.
"...but then well over 200 years later the British once again found a way to tax the colonies."
It's still a consumer tax, though some businesses (especially small ones) do not have to pay it and may consider it as additional turnover.
You are wrong, in a sense.
The whole point here is that the EU says that because you are doing business in an EU country (by selling to someone located there) you are doing business in that country (at least for tax purposes) and you are liable to collect VAT.
They do really.
See above.
Again, I'm going to refer to my fruit stall example and another analogy has been made here: http://hannahkate.net/hannahs-bananas-a-vatmoss-analogy/
Like I said before, I have yet to see this holding up in court (if it ever gets there), but at least this is what the EU claims at this point.
Businesses could be charged in an EU country rather than in the US.
Again, and I can't emphasize this enough, it's an absolutely ridiculous measure especially considering some major corporations are evading paying tax in the EU despite doing physical business there. But it seems to be the law nonetheless.
Only if they have an entity within that country that can be charged, or by means of extradition (which, for this purpose, would again require new law not currently on the books). I suppose declaration of war would be the only remaining option. Otherwise it would be a show trial at best, a means of making a statement with no legal repercussions.