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EU Plans to Tax Internet Sales

Posted by ryuzaki0 on from the daddy-what's-a-spoils-system dept.

Arctic Fox writes: "In a bid to help European online sales, the EU is planning to tax online transactions. The article on Yahoo, says that the taxes will apply only to products downloaded from the internet, such as software,videos and music. They may elect to tax physical items (books, hardware,etc) at a later date. American companies will be forced to charge European customers the appropriate VAT in their home country. No details on how this will be enforced."

3 of 358 comments (clear)

  1. Already Happening by gagravarr · · Score: 5, Informative
    I ordered some CDs from amazon.com a few weeks back. Two days ago I received a notice that I needed to go to my local postal depot to pay a customs charge before I could collect my package

    So, I found a map, located the depot, and trapsed over there. I handed over my card, and the guy said "So, you've been buying from Amazon have you? They're cracking down on all internet purchases you know?". I had to pay the VAT (sales tax) on my CDs bought in the states before I could collect them.

    Apparently, almost all internet based purchases from major US sites are now already attacting VAT charges in the UK. I know a friend who bought from Think Geek got stung a few weeks before for the VAT on his purchase.

    --
    This post will enter the public domain 70 years after my death, unless Disney buys another extension.
  2. Tax all ya want... by Dredd13 · · Score: 5, Funny
    .USians will simply point at Yahoo! Inc. v France, and point out that the US has already granted declaratory relief that US companies don't have to obey silly-ass foreign laws.

    I strongly suspect "being forced to act as a tax-collector on behalf of a foreign country" would fall in the same boat. Heck, given the state of .US tax law, it wouldn't surprise me if it was considered seditious behavior. ;-)

    D

  3. This is news? by sph · · Score: 5, Insightful

    They may elect to tax physical items (books, hardware,etc) at a later date.

    Come on, is this 2002 or 1992? Seriously, the other part of the news (i.e. taxing online transactions for online goods) is totally valid, because it's not being done yet, AFAIK.

    There is a concept of EU's taxation area, which includes pretty much the whole EU with a couple of exceptions (like Jersey). Since something like 1993 there has been the EU "Single Market", and most physical goods imported from elsewhere have been subject to VAT. If I order something from for example the US or Australia or Japan I have to pay VAT if the package gets caught in the customs. If I order something from the UK or France or Germany, who cares, it's from the taxation area, and taxes are assumed to have already been paid. Many European online vendors have VAT already included in their prices, and for example Amazon.co.uk charges the VAT based on the destination country.

    At least some Canadian online vendors go around VAT by sending their shipments to the customer from some country in the EU. The package isn't subject to VAT if it's sent from France or Belgium. I don't know the legality of this, but the concept sounds somewhat dubious, despite allowing cheaper prices for the customer.

    At least in Finland the key is to order less in one package, because our customs don't bother to charge less than 10 euros. I have something like 90 DVD titles (some of them being 5-6 disc boxes), with almost all of them being ordered from the net, and only 15 of them originate from the EU taxation area. I haven't paid VAT (22% in Finland) or customs (3.5%) for a single one of the imported ones, because I order only one or two discs at a time.

    More information about VAT is available at European Union's VAT info page.