by moomin on 12/1/14, 9:17 AM
This is hugely important. The rules themselves are designed to stop people like Amazon abusing the system (and believe me, they abuse it), but there's no provision for smaller companies, no one stop shop for dealing with the VAT authorities. It's going to be a disaster for SaaS startups.
by pdknsk on 12/1/14, 10:32 AM
by vegancap on 12/1/14, 9:47 AM
Why am I not surprised? The people who run the european commissions are career politicians. Involved in politics from day 1 and rarely have had real jobs. Let alone ran a business of their own. It figures...
by danmaz74 on 12/1/14, 11:12 AM
I'm a big fan of EU integration, but sometimes the EU Parliament shows a complete lack of understanding about the needs of small online companies (including startups). I understand pretty well that the goal is to stop Amaon et al to game our VAT system, but you can't impose the same kind of complication to small businesses.
by justincormack on 12/1/14, 9:38 AM
We need a flat VAT rate for digital services over the whole EU. Or indeed all services. The whole process of converging VAT rates has been too slow, which for physical goods was kind of ok, but for cross border services it matters. If they did this, then I would not care about VAT registration being compulsory.
by duckingtest on 12/1/14, 10:06 AM
Customer location vat seems to be really easy to abuse. Luxembourg VPN + Post Forwarding = 15% rate on everything that can be ordered online. Compared to maximum vat in EU (Hungary, 27%) that's an enormous difference.
by NicoJuicy on 12/1/14, 10:12 AM
Why not just use a European VAT in case a product isn't bound to a specific country, although the VAT should be "donated" to the country.
VISA, Mastercard, Paypal and etc should have systems in order to donate it to the right country (they know the owner of the card). Don't have a solution yet for Bitcoin though...
by amirmc on 12/1/14, 11:49 AM
Slightly off topic, but for some reason, reading this post and the comments made me think of PG's essay on startup hubs, where he mentions startupicide. These VAT rules seem to (inadvertently) act that way.
http://paulgraham.com/hubs.html
by acd on 12/1/14, 9:36 AM
The problem is that some countries are within the European union but are tax havens. Luxemburg is such a country with 15% VAT but most other countries have 20%+ VAT.
The solution should be to have one VAT level which is higher than 15% and the same in the whole union.
by vixen99 on 12/1/14, 9:29 AM
'If the customers IP address and billing address conflict you are going to have to halt the purchase unless ...'.
So how do I, as a customer, go about buying something online while not at home? The 'unless' doesn't appear to unravel the mystery.
by kdeldycke on 12/8/14, 2:30 PM
by doctorfoo on 12/1/14, 9:43 AM
Roll on crypto-anarchy.
by chrisdew on 12/1/14, 10:16 AM
The worst part is that non-VAT registered (because of turnover of less than £70K/~$100K in UK) businesses will have to register for VAT in each of the 28 EU countries they sell to individually (and probably in 15+ non-English languages).
I intend to stop selling to (non-UK) EU countries in 2015, but I am worried about that decision as it may open me up to discrimination laws. If that's the case, I'll have to close my business entirely.
by johansch on 12/1/14, 9:29 AM
Sure, looks like there will be some pain and confusion in the short term, but in the long term, how does this really hurt EU startups in the global market?
Presumably the various payment solutions are going to adapt to this, simply because it costs a lot less to to implement whatever is necessary than to just give up the EU market.
by leimon on 12/1/14, 10:23 AM
this is only on digital goods, right ? why is this only on digital goods. ? how is this dealt in US, there are different states, and if saas from new york sells something to LA, how is that dealt ?.
by chvatalt on 12/1/14, 9:59 AM
Switzerland is in the middle of Europe but not part of the EU.
Just incorporate there.