[tehwalrus]

State of seller determines the tax rate.

In the EU, if you're British and buying from Germany, you pay German, not British, VAT rates - they should copy that.

Agreed though, that British VAT isn't as simple as it could be (whole categories exempt, etc.)

[TomaszZielinski]

Not quite true.

The rule of thumb is that VAT is a tax on consumers, not businesses. Of course there are hundreds of exceptions to that.

If you are a British company buying services from Germany then the seller shouldn't charge you a penny, then you charge the British VAT on the purchase and then deduct it if only the purchase is related to _your_ taxable sale(s).

But if you are a British consumer then the seller should charge you the German VAT.

That's the general case, there are exceptions to that and exceptions to exceptions so don't bite me please :)

By the way, the national VAT bills have to be complex simply because they are meant to mirror the EU directive: http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:...

[mjn]

That's not true in the EU across the board. If you're buying by mail-order, and the seller is above a certain size (small sellers exempt to reduce the compliance burden), they have to assess VAT based on the shipping address. For example, when I order from Amazon.co.uk to Denmark, Amazon charges me Denmark's VAT rates (which are higher and don't exempt books, alas).

[tehwalrus]

interesting! I was basing my knowledge here on having paid "German VAT" on a smartphone from amazon.de (they had it slightly cheaper and much earlier than anyone in the UK.) Maybe I got confused, but I was sure at the time it was a different %age. Maybe I was above the threshold.