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Amazon and eBay Sellers' VAT Fraud Rife Despite Crackdown (theguardian.com)
Huge numbers of VAT fraudsters are illegally selling goods tax-free to British shoppers on Amazon and eBay, despite new government efforts to crack down on this ballooning 1bn pound VAT evasion crisis, reports the Guardian. From the article: A Guardian investigation found a wide variety of popular goods being illegally sold without VAT on Britain's leading shopping sites. They range from cheap Christmas tree lights, electric toothbrushes and thermal socks to expensive laptops, iPads, music keyboards, violins and pingpong tables. In some cases, VAT fraudsters offer unbeatable prices. Mostly, however, their prices remain in line with law-abiding competitors and the proceeds of evasion disappear overseas, often to China. Guardian investigations found many tax-evading sellers were trading without displaying VAT numbers on Amazon or eBay. Others were showing made up numbers, or numbers cloned, without authorisation, from unsuspecting legitimate businesses.
Wait, you mean to tell me those who don't like paying obscene taxes on goods the rest of the world enjoys VAT-free, try and find ways around it?
I'm shocked. Shocked, I tell you.
In related news, I wonder how many of those high-level regulators who are super-pissed about this problem also enjoy tax loopholes on a personal level.
Speaking of loopholes, any chance regulators from the Tax Haven of the Universe (Ireland) are super-pissed? They shouldn't be, since they harbor tax evasion on a scale most can't even dream of.
Value Added Tax is an acronym used in many, but not all countries. USA for instance, has no equivalent of the VAT, instead they have various state sales taxes. Canada has something called the HST (harmonized sales tax), but nothing called VAT. So, unless you do business with the UK, Australia, New Zealand, or other countries with something called VAT, there's no reason you'd know what it is.
If I can be modded down for being a troll, can I be modded up for being an orc, or a balrog?
To be honest VAT has always been a disaster waiting to happen, and inside the European Union it is an unmitigated nuisance to enforce.
VAT, you see, isn't a sales tax. When one company sells stuff to another one, it charges VAT on the deal which the other company can then claim back. In a chain of businesses, this carries on until the end user gets stung with the final VAT charge. This therefore lends its self to a criminal activity called Carousel Fraud, whereby VAT-liable goods are moved around, with VAT being fraudulently claimed back repeatedly. Carbon credits are the current favourite target here, since they are intangible and thus shipping costs are minimal.
Carousel fraud costs the EU thousands of millions of Euros per annum in lost revenue, and probably the same again in administration costs. As taxes go, it is a fraudster's wet-dream and a tax enforcer's nightmare and yet, as with much of the EU, it is a bad idea that is effectively here to stay.
Simply ignoring VAT, as is going on here, is another downside to it; it is simply near-impossible to catch all the fraudsters doing this, since almost no customers will trouble to report people for giving them a good cheap deal.
VAT was first introduced in France as an alternative to income tax. It was introduced in the UK after WWII to fund war reparations. That debt has now been settled - why the fuck UK taxpayers as opposed to Hitlers bankers had to pick up the tab is anyone's guess.
Charging VAT for EU sales is a nightmare. For B2B sales, you need a valid EU VAT number to zero rate for reverse supply. There is no central registry and it can take forever for EU customers to supply this via email. It's also often not properly indicated on invoices when a supplier has done this.
For consumer transactions, you need to identify the country of consumption and charge at the appropriate rate. Every company supplying into the EU should have an EU VAT ID and collect the tax. Not doing so or charging a consumer an incorrect rate is a criminal offence and again, there's no central information source on the different national VAT rates and rules. Add to the stupidity that many people live in one country and work in another.
In short, only the EU could create such a bullshit, unworkable supranational taxation regime.