
Amazon and eBay 'liable' if they ignore VAT fraud - jacquesm
http://www.bbc.com/news/business-34650014
======
benoliver999
I buy a lot of stuff from Amazon for work. We are a small business so it's
important that we get all the VAT invoices for purchases where available.

I have lost count of the number of people who mysteriously are not VAT
registered, or will not provide an invoice no matter how hard I try. You get
to know who the bulshitters are pretty quickly but it's still a problem.

~~~
dogma1138
Small businesses with revenue of less than 100K a year* can opt-out of VAT
registration hence will not charge VAT and thus cannot generate you a VAT
invoice.

And as far as "marketplaces" go the HMRC's own website says that you can use
3rd party websites to actually ignore the VAT MOSS requirements as the site's
operator should handle it for you.

[https://www.gov.uk/government/uploads/system/uploads/attachm...](https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/415931/VAT_MOSS_Flow_chart_FSB_edit_V1_0.pdf)

While there ofc is a way for marketplace providers to throw the liability back
into the hands of the small business which uses them I have a strong feeling
that neither Amazon nor eBay make it particularity clear or advertise it, add
to that the open endorsement that HMRC and various small business
"associations" gave marketplaces as a easy tool to reduce the VAT burden on
small businesses and you might have quite a few instances of unintentional
"fraud".

*I'm assuming since you are commenting on a UK specific issue you are in the UK if you are not there might be other regulation or different caps for small businesses to opt-out of VAT.

~~~
jacquesm
Unfortunately that's almost correct. See, if you sell to a Spanish citizen you
now are unable to opt-out of VAT, because Spain does not have such a minimum.
The whole VAT/sales tax situation in the EU is incredibly complex and it's
little issues like the one you missed that can completely mess up your
otherwise orderly run company.

~~~
DrJokepu
*Resident of Spain, not Spanish citizen. Big difference. With the exception of the residents of Canary Islands, Ceuta, Mellila, which are part of Spain and the EU, but not part of the EU VAT area.

------
AlexMuir
Here's an example from the UK. This seller has been operating for months on
eBay selling millions of pounds worth of Apple gear.

15" Macbook Pro. 2.2GHz Processor. 256 GB Storage

===

from Apple [0]

£1,599 including VAT

£1,332 exc. VAT

\--

from Electronic King Inc. on eBay [1]

(shipped from UK)

£1,219 presumably no VAT.

\--

Apple USD price $1,999 = £1,328.

\--

The seller has a UK address as contact details. And is using a mobile phone
and a gmail address (ebayprincess05--@gmail.com).

There must be something more than avoiding VAT happening here. I thought for a
while that this might be a fraud. Even with them evading the VAT I can't
understand how they're turning a profit. My assumption was that they're
building up feedback before just disappearing with a week's worth of sales.
But 46,000 feedbacks is way beyond what's needed for that. Some of the
feedback definitely looks suspicious - a high proportion of low-feedback
buyers have bought exactly two of the same item.

[0] [http://www.apple.com/uk/shop/buy-mac/macbook-
pro](http://www.apple.com/uk/shop/buy-mac/macbook-pro)

[1] [http://www.ebay.co.uk/itm/NEW-Apple-Macbook-
Pro-2-2GHz-2-2-G...](http://www.ebay.co.uk/itm/NEW-Apple-Macbook-
Pro-2-2GHz-2-2-GHz-15-4-MJLQ2-i7-16GB-RAM-256GB-
RETINA-2015-/381331134167?hash=item58c91b56d7:g:3BUAAOxygj5Sd8Lf)

~~~
coob
No word on if it's a UK or US keyboard.

Also - they could be fraudulently taking advantage of Apple's 15% education
discount.

~~~
dogma1138
Even if you aren't paying taxes getting a 15% discount isn't enough if you
need to do a complete buy-in on the goods to sell them.

------
rasz_pl
I can tell you how it works in Poland. Ebays direct competitor in central/east
europe is Allegro
[https://en.wikipedia.org/wiki/Allegro_(auction_website)](https://en.wikipedia.org/wiki/Allegro_\(auction_website\)),
Polish tax collection agency bought software that lets them scan Allegro
auctions as far back as 2007. They started suing INDIVIDUALS (not
companies/corporations, those usually know how to "legally" pump profits out
of the country, just like Amazon/FB do) and are winning in courts. We are
talking woman selling used baby clothes here, not electronic retailers
importing containers worth of stuff from asia.

~~~
TheOtherHobbes
UK's HMRC have neither the skill, the resources, nor the political inclination
to do something like that.

The EU still has a huge issue with VATMOSS. The idiot bureaucrat in the EU
responsible for the mess has been moving over to an exemption for small
businesses - which he thinks should be around £5k, and not the £100k which
would be more sensible.

I've heard stories of tax inspectors telling small businesses just to ignore
VATMOSS.

Bottom line - considering that Amazon gets away with paying so little tax in
the UK, I'll be surprised if this is more than PR effort.

------
seanalltogether
I visit a food & craft market every weekend in the UK to browse and get lunch.
Should it be the responsibility of the market owners to ensure each stall is
charging and reporting VAT to the gov?

~~~
Symbiote
Maybe, especially if it's the kind of market where you buy "tokens" from the
market owner to exchange for food. (Common at music festivals, theme parks
etc.)

------
x5n1
All these tax schemes need to be standardized in the global market place.
Weird taxing schemes are a huge burden to business.

~~~
nraynaud
they are standardized in the EU actually. Standardization started in 1977. but
since 2007 stuff got more serious. The real problem is that each country have
a different rate, but for the rest, it's quite smooth. Tax issues across
countries in Europe are often easier than in the US from what I read around.

One issue I have with the article is asking Amazon, a notorious tax dodger, to
enforce some tax rules on others doesn't seem like the right way to go.

~~~
Symbiote
One issue is old exemptions remain, like tax free books in the UK.

Clearing up some of these would be good, if we can get counties to agree
whether books should be tax free, reduced rate, or normal rate.

~~~
dogma1138
If this was only books then It would be a good day, the problem it's not.

I've already b&m'ed about it....
[https://news.ycombinator.com/item?id=10526573](https://news.ycombinator.com/item?id=10526573)
[https://news.ycombinator.com/item?id=10526551](https://news.ycombinator.com/item?id=10526551)

TLDR There are too many different rules and regulation regarding how, when, at
what rate and why and on what VAT should be collected and these local
regulations have some many caveats that it very difficult to be 100% compliant
locally not to mention globally within the EEA market. Add to that the fact
that you have various VAT exemption rules that govern when and how businesses
and individuals can become VAT exempt (e.g. small businesses, non-profits,
charities, disabled or terminally ill individuals, etc.) and you get a
steaming pile of horse shit.

------
mesozoic
They both also need to clear up basic fraud from 3rd party sellers on their
platform selling fake or similar products by taking over previous
listings/reviews.

------
rebootthesystem
I don't know how this works with eBay but can tell you what the issue is with
Amazon US.

In simple terms they are pulling a fast one by making third party vendors
responsible for sales tax. Amazon benefit from vendors who ignore this by
having a marketplace where buyers can avoid sales tax, which can amount to a
significant chunk of change.

Why do vendors avoid it? Well, it isn't necessarily because they want to
defraud the government. It's because of how ridiculously complex the system
can become.

If Amazon were responsible for the collection and payment of sales tax it
would be super easy. They make the sale, collect the money, have the data and
can automate the entire thing.

What does it look like for third party vendors using FBA?

Well, let's say you have a business registered in, Nevada. No state sales tax
there. However, by selling through Amazon and using FBA you now have to be
aware of something called "nexus".

If your little box containing your widget is located and shipped from an
Amazon warehouse located in California you now have to register in California,
obtain a resale permit, collect, file and pay sales tax in that state. And, of
course, you have to do the same with every state where Amazon has a warehouse.
I think the number is somewhere around 16 states. In other words, it's a mess
and a nightmare.

Amazon could make this super easy by collecting, filing and paying sales tax
themselves but, for some strange reason, they've managed to convince
government folk that THEY are not the sellers. This, of course, is ridiculous.
Amazon allows businesses to list and sell on their platform but it is no
different from selling to Walmart. Amazon has total control over absolutely
everything. In that sense it isn't like eBay at all where you truly are the
seller.

BTW, as I understand it, the whole business of "nexus" connected to Amazon
warehouse locations is still something that has not been fully sorted in law.
I've read opinions on the side of single state nexus (meaning, you are only
responsible for sales taxes where your business has is located and nowhere
else) as well as the exact opposite case where you have to register, collect,
file and pay on every state your product is stocked at an Amazon warehouse.

It's a mess.

------
steaminghacker
VAT question for anyone.

I sell apps on Google play from the UK. Google keep the VAT even for UK sales.
According to my accountant they shouldn't do this. If they're paying the VAT
on my behalf, where's my paperwork because (1) can they do this and (2) when i
book sales, according to HMRC, i owe the VAT which i haven't received.

this all started since this EU VAT change.

any ideas?

