The recent changes to EU VAT were an unmitigated disaster from the start, and they remain so to this day.
For a start, it is effectively impossible for any business to fully comply with the rules now, unless it literally has the resources to understand detailed tax rules in every EU member state.
Even a good faith effort to comply with the spirit of the new rules and file the necessary returns will be beyond many micro-businesses. As a direct consequence, it appears that many people's side-businesses have ceased trading altogether, which of course is a loss to those businesses, their customers and the tax revenues of the affected states. The relevant authorities failed to even recognise that many thousands of such businesses existed at all, or to consult with them or take their situation into account in any way when writing the rules. In some cases, senior government figures even expressed surprise, when awareness was finally raised among the small business community literally just a few days before the new rules kicked in, that no-one had spoken up sooner in the multi-year process of writing the rules (that none of the affected people had any reason to know about).
Perhaps the biggest kick in the teeth of all is that for most small businesses that were large enough that it was worth continuing, the easiest way to comply was to outsource the various handling to specialist services. Given that the claimed purpose of these rules was to make it harder for large international businesses with lots of accountants to reduce their tax payments, would you like to guess what types of business were best placed to offer those new specialised services to the small, local businesses who got screwed by the new rules and thus profit off the creation of those rules at the expense of the small businesses?
Aren't they exactly what was wanted, to stop big companies like Amazon from taking advantage of the tax system (invoice everything in Luxembourg) that aren't practical for small businesses?
Or, to prevent foreign online retailers from undercutting local ones simply through lower "local" taxation rates.
In theory the laws are great. But they should be applied over a certain revenue threshold, say €1M. They're a mess for someone selling a few items per month to customers all around Europe (like selling an ebook on your own website).
As far as I know the VAT law applies only to service providers (like Skype, and AWS) and you can easily file taxes through the mini one-shop-stop way ( http://www2.deloitte.com/global/en/pages/tax/articles/eu-201... - chose an EU Member State, I recommend Ireland, their online thingie seems to be okay ).
Unfortunately, it appears that you have been misinformed. There is no lower threshold to who the new rules affect. Also, while the mechanics of filing via MOSS aren't too bad in themselves, there are numerous other problems caused as a direct result of the VAT changes. As a couple of examples, there are several practical problems with keeping records to the required standard, and related conflicts between the rules about VAT and other EU consumer protection rules about advertising all-inclusive prices.
As someone running small businesses that do have to deal with EU tax rules in some cases, it is hard to imagine how they could have got this one more wrong. I know several people who run other relatively small businesses (though in some cases much larger than any of mine) who after also going through the hassle of modifying all of their systems to comply as well as possible have the same conclusion as me. For all of us, the most commercially reasonable option if we had known the full cost of compliance would have been to instead simply decline to take on any EU customers outside our home nations from the date the new rules came into effect and have nothing to do with the rest of the EU or its VAT rules at all.
> There is no lower threshold to who the new rules affect.
I never claimed there is a minimum amount, I just said that not anything over the net is automatically subject to the new "customer's host state's VAT applies" rule.
> conflicts between the rules about VAT and other EU consumer protection rules about advertising all-inclusive prices
You can't advertise as "9.99EUR + VAT"? Or guess the VAT rate based on geo-IP location association?
What kind of services do you provide?
I agree that it's still a far cry from a great solution. First of all they have too many damned useless documents and no code at all. (At least I haven't found any.) Nor a proper infographics, or a diagram illustrating the flow.
I think the replies to my post show some of the problems.
Flat taxes might not be practical, but the baffling system of VAT and excise duties we have in place at the moment place a really high bureaucratic burden on businesses.
I'm often pro-regulation, and I like taxes, and I definitely thought some of those tax avoiding businesses were abusively avoiding tax.
Corporations lose money through regulation and lives are saved. I'm sure you can see why many Americans are horrified by it: they value money over human lives.
The recent changes to VAT feel like a mess. Maybe I'm missing something there and they're not as bad as they seem?