New European V.A.T Law

[el pres]

So is the EU software ready for Utah sale tax? Will EU business find it smart/good investment to get their system ready for VAT rates and VAT laws from western Iraq, and parts of Mongolia? Will there be free updates when Afghanistan changes their VAT rates and laws?

If there was to be a US sales tax for online purchases, it really wouldn't be that difficult to account for it, as for Iraq, Mongolia and Afganistan, you get sales from there, great.

The cost's can be offset by the interest on the tax that you hold for up to 3 months.

If you bill 100k + tax to the EU a month, you're holding 16k a month,
If you bill through Spain.

So if you stick 16k on a three month deposit
another 16k on a 60 day deposit
and another 16k on a 30 day deposit
You make some cash back.

The biggest problem would be exchange rate risk, you'd either need to hedge your exposure or set up a euro account.

I hear that many telco/isps companies in Europe are moving their billing companies to countries with the lowest VAT in Europe... does that mean that all EU citizens accept paying the highest possible VAT rate (25%) or are does that mean that EU citizens are already looking for the lowest possible VAT rate (13%)?

If you can bill with a 13% tax rate you become cheaper than your competitor, so why not move. Not sure about setting up in Maderia though.

Germany's got low sales tax,
but heavily regulated employment/company laws and pretty strict pornlaws.

Luxembourg would not be a bad idea, as you could keep all EU profits offshore and not pay tax on them, but it's damn expensive to set up and maintain an office there.

But all dialer billing goes through the major telco's and they won't move offshore, they're probably not allowed to, this law is for online services.



Last edited by el pres at Jun 7 2003, 03:57 AM