This is a very poorly thought out piece of legislation and it could quickly turn into a huge pain in the ass:
- People are now incentivised to game the system by trying to seem like they are coming from low VAT jurisdictions, so they get lower prices. It's the business that is liable if customers get away with this.
- The "two pieces of evidence" rule means IP address and ... ? Realistically, it seems the only other thing that'd work is credit card billing address, do people even have any other way to prove their location over the internet? Wire transfer details? So for anything that isn't very expensive, forget about selling with anything OTHER than a credit card. Great, businesses selling digital goods just got nailed onto the cross of a 1970s era payment technology that barely evolves at all; how backwards. Not to mention that many people in the EU don't even have credit cards and make payments in other ways, which may or may not give geographic info.
- More rules that are so absurd they can't be reliably enforced, like the travelling rule, so they are just setting traps for the politically unfavoured.
All this to try and undo the effects of the single market the EU worked so hard to create, by preventing countries competing with each other on tax rates? Should have thought of that beforehand!
I can see this creating new businesses. I would love to issues credit cards within EU where there is low VAT and then invoice electronically so there's no phyisical address required. As well as if IP is used, cheap shop proxy which comes as bonus when you start using credit cards which I'm issuing. Even physical "delivery proxy" could be arranged for items. Many businesses are doing trickery like this all the time.
I can see this creating new businesses. I would love to issues credit cards within EU where there is low VAT and then invoice electronically so there's no phyisical address required.
I'm pretty sure what you call a "new business" could quite easily be given the alternative name of "tax evasion."
This isn't a field I'd recommend startups to look at entering.
Comments
This is a very poorly thought out piece of legislation and it could quickly turn into a huge pain in the ass:
- People are now incentivised to game the system by trying to seem like they are coming from low VAT jurisdictions, so they get lower prices. It's the business that is liable if customers get away with this.
- The "two pieces of evidence" rule means IP address and ... ? Realistically, it seems the only other thing that'd work is credit card billing address, do people even have any other way to prove their location over the internet? Wire transfer details? So for anything that isn't very expensive, forget about selling with anything OTHER than a credit card. Great, businesses selling digital goods just got nailed onto the cross of a 1970s era payment technology that barely evolves at all; how backwards. Not to mention that many people in the EU don't even have credit cards and make payments in other ways, which may or may not give geographic info.
- More rules that are so absurd they can't be reliably enforced, like the travelling rule, so they are just setting traps for the politically unfavoured.
All this to try and undo the effects of the single market the EU worked so hard to create, by preventing countries competing with each other on tax rates? Should have thought of that beforehand!
I can see this creating new businesses. I would love to issues credit cards within EU where there is low VAT and then invoice electronically so there's no phyisical address required. As well as if IP is used, cheap shop proxy which comes as bonus when you start using credit cards which I'm issuing. Even physical "delivery proxy" could be arranged for items. Many businesses are doing trickery like this all the time.
I can see this creating new businesses. I would love to issues credit cards within EU where there is low VAT and then invoice electronically so there's no phyisical address required.
I'm pretty sure what you call a "new business" could quite easily be given the alternative name of "tax evasion."
This isn't a field I'd recommend startups to look at entering.