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Online Euro buyers stung by VAT rules

New member state accession won't help
Fri Apr 16 2004, 08:35
alt='eurounion' VALUE ADDED TAX rules mean that people buying goods - for example from Amazon UK - end up paying their local rate of tax rather than the 17.5% levied in this country.

And that means that if you buy from a UK vendor in Sweden and Denmark, for example, you'll end up paying VAT at 25%, the rate in those countries. From some vendors, anyway. Let the buyers beware.

Perhaps even more frustratingly, VAT is charged in the UK at zero rate, on books.

The reason is that VAT rules in Europe have changed and some classes of vendor have to register in each country in the EU, so destination rates are charged by companies such as Amazon.

Amazon, for example, has to be registered in each member state, and a Dane buying from the UK will end up paying additional charges. Amazon pays the VAT difference between the different countries using its local offices.

The existence of the rules underlines the disarray in a European Union over tax, soon to be compounded by additional countries flying under the Brussels star spangled blue flag.

This web page, for example, shows how chaotic VAT is in Europe just in the hotel business. And this page shows how the VAT rates differ in each EU country.

A Deloitte document gives some clue to what's happening in the new member states that are set to become part of the EU. µ8


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