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onsdag den 12. september 2007

EU VAT Regulations and their absurdity

It has been pointed out to me that there is a Danish regulation here for MOMs limits here.

Well I wasn't aware of the 280,000kr limit regulation hidden in there, but that does shift the onus onto the retailer to manage their business - you wouldn't be charged any more VAT on EU-bought items when they arrive.

Also, I wonder if that limit is even legal since websites like Figleaves and Book Depository make clear they charge UK VAT rate only. eBay previously added VAT to sellers fees at their location rate, and I'd give up selling anything through them since moving to Denmark as a result, but now eBay have felt confident enough earlier this year to move their EU jurisdiction to Luxembourg so that all EU private sellers only pay 15% VAT on their selling fees. See here http://pages.ebay.ie/sell/VAT-ie-faqs/index.html. I'm sure they bought the best legal advice going and you wonder why Germany doesn't do something about this, since they would be the biggest losers...maybe they know eBay have an ace to play?

Let me know if you can find a case where a government has dared to challenge a business regarding this murky rule.

I checked Fleggaard (50 yards into Germany) and they do charge German VAT on pick-ups but Danish MOMs on delivered goods so they're being careful, but then again they are a Danish company so probably have to be.

A shame, since it does mean that any hard-working Danish firm trying to sell on the internet is at an immediate disadvantage against counterparts from other European countries. Hence much business lost for the nation, as proven by my own occasional forays to Euroshop sites.
As I'm self-employed I'd suspect the limit is more likely to be a way of blocking companies supplying personal services rather than flow of goods. With this rule you'd always have to open a Danish branch.

As regards the taxes and blocking - If you read up on the EU, Denmark (and Sweden) are always the blocking countries whenever cross-border trade is mentioned. They are part of the reason it takes years to get the VAT rules shifted for the betterment of the majority. They just know that the taxes on everything are so much higher here than elsewhere that they'll lose out.

tirsdag den 4. september 2007

Whatever happened to the EEC?

Does anyone remember how, many years ago when Britain gained entry to the EU, it wasn't even called the EU, but the EEC (European Economic Community) or "Common Market"?

In those days, the major benefit that was sold to Britain was entry to an exclusive free trade club, and before that Britain was in EFTA (European Free Trade Association) along with a few of the Scandinavian nations.

Fast forward from 1973 to 1999 and the internet suddenly started making this free trade doctrine possible. So what happened? By a bit of rebranding the EEC had become the European Union (EU) and did things like forcing Amazon to charge VAT at the local buyers rate.

As a publicity stunt to put EU citizens off buying overseas ever again, it was a great success, but people need to know that Amazon was made an exception because of it's size. It's legal to buy from almost all other retailers in the EU and pay only their local sales tax.

I'm all for the EU as an organisation for fair, free trade, but at the moment this core belief has been forgotten...or did it ever exist except as an idea on paper from the days when they knew ordinary people wouldn't be able to take advantage of it anyway?