

EU's new VAT rules forcing thousands out of business - jacquesm
https://euobserver.com/opinion/129961

======
datalist
"In January, thousands of the smallest businesses closed or abandoned their
digital strategy."

Numbers and sources for this please.

Considering this comes from "EU VAT action" I somewhat question their
objectivity. They rather try to back their agenda.

~~~
Mithaldu
Agreed. I do business in 3 countries and have no issues, and buy stuff from
small and big web shops in different countries without issues. I'd really like
to know how many shops exactly closed down, as well as a representative sample
of case studies.

~~~
jacquesm
I'm running one of those companies affected by this and it is a huge pain in
the behind. For many of the countries the administrative fees are a large
multiple of the amounts due.

On top of that they're a bunch of incompetents, I got hit with a 4500 euro
'overdue' notice from the Irish tax department which they pulled entirely out
of thin air. It's a huge annoyance and I'll be more than happy if this goes
away or if I simply have to pay the dutch high VAT tariff.

Amazon got to reap the benefit of their tax avoidance scheme for years and
small businesses end up with the balance of the burden.

~~~
Mithaldu
What exactly has changed for you? How are you addressing it, and how does it
cost so much more? I'm really curious, since on my end nothing has changed at
all.

> I got hit with a 4500 euro 'overdue' notice

This and the mention of the 100_000€ bill in the article makes me think one of
the main issues seems to be incompetent handling by the offices in question.
Does that seem accurate?

~~~
hrbrtglm
> since on my end nothing has changed at all.

If nothing changed at all, you may be doing it wrong.

Which country are you billing from, which european countries are you selling
to ? Are you selling a single product/services, several with each different
tax rates ? How do you know which VAT rates you have to apply, are you vatmoss
registered ?

It's a difficult subject, I'm really surprised it seems so easy for you (or
anybody else)

~~~
Mithaldu
Germany to UK, Germany and France. I sell my services as a developer. And
according to my tax advisor (who has power of attorney for me and handles
everything) my invoices to UK and France are perfectly fine with a note
stating that they are without VAT due to specific laws in the respective
countries.

And i think that maybe the fact that it is difficult for some people, but a
complete non-issue for others is what keeps this entire issue from being
effectively communicated to europe at large; since everyone talking about it
treats it like the end of the world, but doesn't give specific details on the
issues or the costs; while for many people they don't even need to think about
it.

~~~
dogma1138
I'm sorry but you might want to get a 2nd opinion B2B services in the UK are
VAT taxable.

Since you are delivering services from outside of the UK a reverse charge
needs to be assigned.

[http://www.hmrc.gov.uk/manuals/vatpossmanual/vatposs06300.ht...](http://www.hmrc.gov.uk/manuals/vatpossmanual/vatposs06300.htm)

In the UK there's also a difference in VAT and taxation if you are registered
as self employed, contractor or if you are running you own business.

HMRC actually has quite a good selection of tools for paying VAT and taxes
that simplifies things to some extent especially for self employed individuals
or contractors.

[http://www.hmrc.gov.uk/gds/online/new.htm](http://www.hmrc.gov.uk/gds/online/new.htm)

Please note that in most countries you are still responsible for overdue taxes
even if your accountant has power of attorney, you are the one who will be
liable for it, you can sue your accountant for damages for sure but you'll be
the one left stranded to sort things out if the payments were mishandled.

~~~
dingaling
> I'm sorry but you might want to get a 2nd opinion B2B services in the UK are
> VAT taxable.

Only applicable if you as supplier are registered for VAT.

Many smaller businesses and sole-traders selling less than the relevant home-
country thresholds are unaffected.

In the UK that is £82,000 per year.

Source: being a small UK business that decided against VAT registration for
that reason

~~~
dogma1138
That's if they choose not to register for VAT you can register for a VAT
number in the UK as self employed under any threshold. In many cases the
savings from VAT returns might be sufficient to justify the cost of handling
VAT on your end.

How ever non-UK member state suppliers complicate things, if you are VAT
registered in Germany, you are treated as a VAT registered
businesses/individual by the HMRC so in this case the reverse VAT charges need
to happen (the company which received the service in the UK will clear the VAT
on the invoice).

[http://www.hmrc.gov.uk/manuals/vatpossmanual/vatposs14100.ht...](http://www.hmrc.gov.uk/manuals/vatpossmanual/vatposs14100.htm)

What i don't understand is why they've simplified things beyond reason for B2B
but complicated things in B2C, heck what happens if you have a tax exempt
business (UK example: self-employed people with small earnings exemption) and
you cannot register for a VAT number or produce a VAT invoice and you have B2C
transactions with other member states that now require you to charge VAT?

