[jibjab]

Thanks for your reply.

Regarding #1: True, it seems that there are some countries like the UK [1] have thresholds, but others don't seem to have any (eg Ireland [2]). No matter if they exist or not, there are still companies that have large EU based turnover (Github, 37signals), and they too don't charge VAT.

Regarding #2: I agree. It's not that I want to convince anyone to start charging VAT. I'm simply trying to understand why this directive exists and why no one seems to care :-).

[1] http://www.hmrc.gov.uk/vat/start/register/when-to-register.h...

[2] "(g) A non-established person supplying taxable goods or services in the State is obliged to register and account for VAT irrespective of the level of turnover." http://www.revenue.ie/en/tax/vat/registration/index.html#reg...

[jcr]

You might also want to read up on the "Double Irish" and "Dutch Sandwich" approaches to dodging EU taxation. But if you're at work, searching those phrases without safe search might be a bit interesting... ;)

http://www.businessweek.com/magazine/content/10_44/b42010431...

[rmc]

Ireland has a low corporation tax 12½%, to avail of that you need to incorporate an Irish company. This has nothing to do with Ireland's VAT rate (of about 21%)