Fight EU VAT for US Online Business

[dworkin]

I think this (see below) is ridiculous and am raising hell (hope my Slashdot post gets accepted) to counter this.

The EU has no right to tell US business what to charge their customers, any more than the US has such a right towards EU business. Who do they think they are??? Do US businesses need the extra paperwork. Hell no. Why would I, the little guy, pay money to fund a bunch of corrupt officials. RESIST!

If we can reach a non-compliant critical mass this rule will be unapplicable and hence unapplied.

---quote---
Dear ServerBeach Customer,

The purpose of this email is to inform you of changes to the laws of the European Union and Value Added Tax (VAT). Due to changes to the EU place of supply rules, all suppliers of electronically supplied services are now required to charge VAT to all private individuals or non-business organizations in the EU. This includes ServerBeach as a supplier of electronic services.

More information about this change and the rules can be found at:
http://www.hmce.gov.uk/forms/notices/info0703.htm

Your billing address is in a member country of the EU. Based on the rules, there are two options:

* You can supply ServerBeach your VAT registration number before your next billing cycle, thus indicating that you are a registered business. If we receive your VAT number, we will not be required to charge you VAT.
* All individuals or businesses that do not have a VAT registration number will be charged VAT. The specific VAT percentage differs based on your country of residence.

In order to have proper documentation for our files, please respond via this email indicating your response to the two options above (and include your VAT number if applicable). We will verify your VAT number and keep monthly fee the same or adjust your monthly invoice if you are not a registered VAT business.

We apologize for this unpleasant paperwork. But be assured that all hosting companies, regardless of their physical location, have this obligation. Again, the URL for more information is: http://www.hmce.gov.uk/forms/notices/info0703.htm

Thank you for your help in keeping ServerBeach and your business in compliance with these new EU rules. If you have any questions, please read the link above or reply to this ticket with your questions.


Regards,

ServerBeach Billing Department
---unquote---

[QT]

But if the customer was buying the service from a provider in the EU, wouldn't they have to pay VAT anyway? :confused:

[dworkin]

Originally posted by QT_
But if the customer was buying the service from a provider in the EU, wouldn't they have to pay VAT anyway? :confused:

Right. So trying to have US companies charge VAT too, is just a protectionist measure, because EU business is at a disadvantage vis-a-vis US companies otherwise. Do US companies tax EU customers? No. The EU's competitiveness is the EU's problem, and vice versa. The solution is to remove VAT from electronic services worldwide. No more disadvantages anywhere. Instead, me, the little guy with my little Friend & Family server would have to pay more? Those days are over, QT. The people need to win the world back urgently.

[knightfoo]

Originally posted by dworkin
Right. So trying to have US companies charge VAT too, is just a protectionist measure, because EU business is at a disadvantage vis-a-vis US companies otherwise. Do US companies tax EU customers? No. The EU's competitiveness is the EU's problem, and vice versa. The solution is to remove VAT from electronic services worldwide. No more disadvantages anywhere. Instead, me, the little guy with my little Friend & Family server would have to pay more? Those days are over, QT. The people need to win the world back urgently.

This is something that many countries and almost every state here in the US does. Most states have a "Sales and Use Tax" which is similar to the VAT. The tax is not on businesses, it is on consumers. If someone in Nebraska buys a product from a company in Texas, it is their responsibility to pay the proper taxes to the Texas state comptroller. I highly doubt anyone does this and it would be very hard to catch someone (unless they're making *very* large purchases), but the law is still there. This really has nothing to do with US vs EU companies or competition and it is not a tariff .. this has to do with the EU taxing its own citizens for goods and services that they purchase.

If you want to protest the VAT, then you need to do so within the EU. We cannot tell the EU to change their policies. If we wish to do business within the EU, we have to follow their rules. The same goes for a European company who does business in the United States. If ServerBeach does not follow the rules laid down by the EU when conducting business in the EU, we may be banned from doing business there. It would be trivial for your bank or credit card company to refuse to process transactions for a US-based company if the EU government pressured them to cease business with that company.

-knightfoo

[dworkin]

Originally posted by knightfoo
This is something that many countries and almost every state here in the US does. Most states have a "Sales and Use Tax" which is similar to the VAT. The tax is not on businesses, it is on consumers. If someone in Nebraska buys a product from a company in Texas, it is their responsibility to pay the proper taxes to the Texas state comptroller. I highly doubt anyone does this and it would be very hard to catch someone (unless they're making *very* large purchases), but the law is still there. This really has nothing to do with US vs EU companies or competition and it is not a tariff .. this has to do with the EU taxing its own citizens for goods and services that they purchase.

If you want to protest the VAT, then you need to do so within the EU. We cannot tell the EU to change their policies. If we wish to do business within the EU, we have to follow their rules. The same goes for a European company who does business in the United States. If ServerBeach does not follow the rules laid down by the EU when conducting business in the EU, we may be banned from doing business there. It would be trivial for your bank or credit card company to refuse to process transactions for a US-based company if the EU government pressured them to cease business with that company.

-knightfoo

If you see it that way: You are doing business on the Internet, not in Europe, and not even in the US.
The Internet is not in any one country. Leaving governments to meddle with it will take it away from the people. I will gladly send you cash (dollars) by courier payed in advance every year, hell I'd even bring them myself rather that comply.

[dworkin]

Originally posted by dworkin
If you see it that way: You are doing business on the Internet, not in Europe, and not even in the US.
The Internet is not in any one country. Leaving governments to meddle with it will take it away from the people. I will gladly send you cash (dollars) by courier payed in advance every year, hell I'd even bring them myself rather that comply.

..that being said (after a deep breath and a soothing cup of tea) I see and concede your point that this should be fought out in the EU first.

[knightfoo]

Originally posted by dworkin
..that being said (after a deep breath and a soothing cup of tea) I see and concede your point that this should be fought out in the EU first.

Nod .. if we choose to fight it from here then it will most likely result in ServerBeach losing the privilege of doing business with EU customers (or EU customers losing the privilege to do business with ServerBeach ;)). We would rather be able to provide some service rather than no service at all.

-knightfoo

[dworkin]

Originally posted by knightfoo
Nod .. if we choose to fight it from here then it will most likely result in ServerBeach losing the privilege of doing business with EU customers (or EU customers losing the privilege to do business with ServerBeach ;)). We would rather be able to provide some service rather than no service at all.

-knightfoo

I just remembered there is a perfectly good traditional Belgian way of handling this. :rolleyes:

[QT]

make waffles....

:p

[dworkin]

Originally posted by QT_
make waffles....

:p

;) riiiight.

[QT]

Originally posted by dworkin
;) riiiight.

That's the first thing I thought of...and they're wonderful!
On a more serious note...
I can understand the frustration of having your hands tied in a matter such as this and I've been on that side of the fence as well..but the law is the law is the law and there's not a damn thing any of us can do about it, unfortunately. :rolleyes:


well there is...vote the *not a nice word* out of office....

[dworkin]

Originally posted by QT_
That's the first thing I thought of...and they're wonderful!
On a more serious note...
I can understand the frustration of having your hands tied in a matter such as this and I've been on that side of the fence as well..but the law is the law is the law and there's not a damn thing any of us can do about it, unfortunately. :rolleyes:


well there is...vote the *not a nice word* out of office....

I'm a little tired to go into politics, tonight. But voting makes no difference whatsoever, if all your choices end up with the same end result, which is the destruction of freedoms long fought for, more money taken away from the less wealthy, and, even worse, the destruction of the environment, in essence denying our children *life*. So popular uprising and resistance is all that's left. Suggest you read Chomsky et.al, even though they might not choose to put it that strongly.

[dworkin]

Originally posted by knightfoo
This is something that many countries and almost every state here in the US does. Most states have a "Sales and Use Tax" which is similar to the VAT. The tax is not on businesses, it is on consumers. If someone in Nebraska buys a product from a company in Texas, it is their responsibility to pay the proper taxes to the Texas state comptroller. I highly doubt anyone does this and it would be very hard to catch someone (unless they're making *very* large purchases), but the law is still there. This really has nothing to do with US vs EU companies or competition and it is not a tariff .. this has to do with the EU taxing its own citizens for goods and services that they purchase.

If you want to protest the VAT, then you need to do so within the EU. We cannot tell the EU to change their policies. If we wish to do business within the EU, we have to follow their rules. The same goes for a European company who does business in the United States. If ServerBeach does not follow the rules laid down by the EU when conducting business in the EU, we may be banned from doing business there. It would be trivial for your bank or credit card company to refuse to process transactions for a US-based company if the EU government pressured them to cease business with that company.

-knightfoo

FYI: (http://www.smallbusinesscomputing.com/emarketing/article.php/2194821)
---quote---
"The European Union passed this new legislation to address the disadvantage that European suppliers of electronic goods and services have," said Richard Mitchell, general manager of the London office of Minneapolis-based e-commerce outsourcing company Digital River.

"An EU-based ASP has always been required under EU law to collect taxes on all supplies of electronic goods and services, which can put them at a disadvantage to U.S. application service providers," he said.
---unquote---

[knightfoo]

Originally posted by dworkin
FYI: (http://www.smallbusinesscomputing.com/emarketing/article.php/2194821)
---quote---
"The European Union passed this new legislation to address the disadvantage that European suppliers of electronic goods and services have," said Richard Mitchell, general manager of the London office of Minneapolis-based e-commerce outsourcing company Digital River.

"An EU-based ASP has always been required under EU law to collect taxes on all supplies of electronic goods and services, which can put them at a disadvantage to U.S. application service providers," he said.
---unquote---

This sounds like a law that has been in effect but no one has bothered to enforce it until now. California is trying to do the same thing by charging sales tax on Internet purchases. Why? Because they don't know how to manage their budget and need a quick buck. This may be the same reason behind the EU enforcing the VAT on non-EU countries .. they need money and this is the quickest and easiest way to get it, and also keeps consumers from going outside the EU to purchase goods. I'd probably leave the country if i had to pay 15-25% sales tax. :)

-knightfoo

[JMulder]

A whopping 19% in The Netherlands as far as I know. Thanks for the bum humping EU :|

I really need to find a new way to cover my costs, these popups are extremely annoying anyway.

[spsmcc]

sell blood/plasma! or your "services"

[Intesoft]

In the UK the VAT rate is 17.5% ... it does make a big difference as you can imagine.

I believe part of the background to this rule was the inequality between American ISPs (ie. AOL) and UK / European ones. The extra 17.5% that the local ones had to charge really put them at a disadvantage.

I don't like paying it but at least it's fairer if it's on everything.

[Tino Didriksen]

Actually, it's been required for foreign countries to charge VAT for quite a while...it's only recently they got a centralized system for it so companies began to take note of it.

Less paperwork, sort of.

[knightfoo]

Originally posted by Tino Didriksen
Actually, it's been required for foreign countries to charge VAT for quite a while...it's only recently they got a centralized system for it so companies began to take note of it.

Less paperwork, sort of.

Heh not really centralized. Every country has their own VAT number format and their own VAT rate. They're all doing the same thing in a different way. It's really a pain because we have to keep track of all the different number formats and charge the proper rate based on each format.

-knightfoo

[JMulder]

Originally posted by spsmcc
sell blood/plasma! or your "services"

Been there, done that!

Whoops, did I say that out loud? ;)