

Digital Tax Increase to Take Effect in Europe - dnetesn
http://www.nytimes.com/2015/01/02/business/international/digital-tax-increase-to-take-effect-in-europe.html?ref=technology&_r=0

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youngtaff
The NYT headline misses the point somewhat…

Large companies have been 'basing' their sales operations in Luxembourg
because it has an extremely low rate of VAT of ebooks, digital music etc.

Their sales operations have mainly been in name only with most of the work
being done in other countries, and revenue moved around via high interest rate
loans.

The EU have decided to legislate against this and make VAT payable at the rate
in the buyers country.

Only problem is in legislating to prevent the likes of Apple and Amazon using
the Luxembourg VAT loophole they've created hell for lots of small independent
sellers who now have to charge VAT whether they needed to or not before, and
charge in at multiple rates depending on where the buyer is.

Rachel Andrew has some good writeup's on this, in particular
[http://rachelandrew.co.uk/archives/2014/11/30/how-the-eu-
vat...](http://rachelandrew.co.uk/archives/2014/11/30/how-the-eu-vat-rules-
make-eu-startups-and-digital-businesses-uncompetitive-in-a-global-market/)
with more in the archives
[http://rachelandrew.co.uk/archives/](http://rachelandrew.co.uk/archives/)

