The FT has reported that:
The German government is to make internet platforms such as eBay and Amazon liable for sellers on their sites who evade paying sales tax, in a move that has been sharply criticised by digital industry groups. “We will not tolerate retailers on online marketplaces – especially those based abroad who are not within reach of the German tax authorities – doing business without paying sales tax,” said Ulrike Demmer, the government spokeswoman. She said the bill was designed to “protect honest businessmen from competitive disadvantages”.
The only obvious response is to say that this is long overdue, and it is time everyone else does the same thing to protect their own domestic suppliers and fair competition.
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RAVAS campaign has been quoted in the German press as an inspiration for this move and I gave an interview to WDR yet HMRC have not done anywhere near as much as the Germans…It’s ridiculous
I hope this succeeds, at least in as much as there will be many legal obstacles to clear for it to work, such as proving that tax has been evaded and then sending the invoice to the platform provider.
Once all the hurdles have been jumped we can extend the principle to making landlords liable when tenants don’t pay their council tax or shopping centre owners liable when their leaseholders don’t pay their business rates.
This is a scenario where the likes of Amazon and eBay have created platforms which make it easy for sellers who are outwith the jurisdiction to avoid paying tax. In doing so they also distort the marketplace and have, quite obviously, profited enormously as a result. If you look at HMRC’s lists of defaulters, there are a lot of Chinese businesses on them. Those are the ones who bothered to register but didn’t bother to pay. It’s clearly the tip of an iceberg. No doubt Brexit will be an excuse not to follow the sensible lead taken by the Germans.
I understand the point Pilgrim Very Slight Return makes, but as I’ve said above, the effect of this is that these businesses and the online platforms they trade on have gained a huge market advantage by avoiding or evading tax (whichever way you want to look at it), and have thus hurt legitimate businesses which do pay all of their VAT. Another factor is that lots of these online products coming from the Far East are counterfeit, which is another layer of illegality.
And I meant to say above, making Amazon and eBay responsible for VAT compliance from overseas retailers is a long way from making landlords responsible for non-payment of council tax or business rates by their tenants. If you want to do that, all that will happen is that property owners increase rents accordingly.
But they would still be liable
Your examples are poor ones. This kind of liability already exists in other areas such as pub lanlords liability for underage drinking and liability for handling stolen goods. VAT evasion is a crime. Not paying your rent is not.
OK – I get that.
But people who are not being paid decent wages, benefits and pensions wouldn’t need to always seek out the cheapest tax free option if this situation was reversed.
I still think that attitudes to tax are in part driven by low wages/lack of wealth in the various strata of the economy. And bad attitudes to tax (incentives to get around it) are also driven by high house prices and other cost of living prices that always seem to be going up.
Agree entirely. 20% VAT is an invitation to defraud when you have very little money.
Have to disagree that VAT avoidance online is an invitation for the consumer to de-fraud and that imposition of VAT online harms the less well off in society. Firstly VAT is not itemised at the checkout so you never know if you are paying VAT or not (part of the problem). You do not choose a VAT avoiding transaction. You do however buy the cheapest because the internet will always highlight the lowest price and that is often because of VAT avoidance. If you are a business there is no advantage as you would claim the VAT back anyhow (if you could get a VAT receipt…which you won’t) Secondly online retail is a not something financially disadvantaged people benefit from. You need a computer and an internet connection for a start. Online VAT avoidance actually benefits those who don’t need the benefit. Furthermore, as it harms physical shops the financially disadvantaged dependent on cash have less and less choice simply because online VAT avoidance is driving consumers to the internet at the expense of shops. So whilst on paper a 20% VAT charge is bad for the poorest in reality VAT avoidance also harms them.
Yes. Ebay doesn’t make it possible to include or exclude VAT according to the geographical location of the buyer.
That’s the first thing they should be forced to do!
That is because you are directed to a geographically appropriate eBay
[…] Source:Â Taxresearch.org.uk […]