information Selling to EU buyers? Beware - The new EU OSS/IOSS VAT law affects you (and is already in effect)

[twiki]

Domain sellers, here comes trouble, I'm afraid:

Starting from the 1'st of July this year, the new EU OSS/IOSS VAT regulation came into effect.

Many sellers here probably have no clue of this.

Also the new legislation can be so cumbersome, that many sellers might find themselves unable to sell to EU buyers anymore. The accounting issues can be quite staggering. (Edit: at our company we already decided we can't sell to EU buyers anymore, at least for now).

Start by reading here: https://ec.europa.eu/taxation_customs/business/vat/modernising-vat-cross-border-ecommerce_en

Some very basic notes:

- If you sell to any EU country (except your own if you're EU based), you're doing distance selling. It doesn't matter whether you sell needles, elephants, services or domains. You have to collect and pay VAT accordingly. Edit: Furthermore domains are digital goods so they are definitely of interest for the lawmaker.

- All taxable buyers in the EU are to be charged with VAT. This includes all individuals, and companies without an valid EU VAT code. Note, most buyers are individuals.

- If you sell more than EUR 10K of goods in a year, you're obligated to collect VAT and disperse the VAT to the corresponding country (where the buyer lives).

- There are only two ways of doing this. Either register for VAT in each country (close impossible) or sign up for the One Stop Shop (OSS) that does this. You will need to have an EUR bank account that will be used to pay that VAT that will be then dispersed automatically to all member countries depending on where the buyer resides. The latter is what you do.

Edit: Additional note, If you sell in US dollars, or any other currency than euros, you will lose money % when converting to those euros and also by the transfers.

- The accounting is a huge problem. You will have to keep track of all sales and deduct VAT already paid (for example to Sedo), and pay the difference while keeping separated amounts for each country.

- Also by the law you need 2 different proof methods as to where the buyer resides (country). Unfortunately with domain platforms you only have 1 proof - what the platform tells you. So in effect, unless they change their systems, you can't - and you're already illegal by the letter of the law. An example of such second proof would be the buyer IP for example that you get through a geolocation service.

Edit: This location proof information has to be stored for years with accuracy and presented to authorities whenever required, for verification.

- There is no minimal value for this. Any sale has to follow VAT laws.

- Domain platforms are not obligated to apply for OSS themselves. Therefore they won't help.

My own mitigation of the problem:

- Despite having a company with several employees, this headache is more than we can handle right now. SO WE HAVE DECIDED TO STOP SELLING TO EU BUYERS ALTOGETHER.

- My interpretation (so far) is that the only network that can still be used is Afternic. Unlike other platforms, Afternic actually resells your domain further as you are not provided with buyer details but just the amount. That's good.

( Edit: Also Afternic often ups the price via their resellers or GoDaddy Auctions, so in effect they are a reseller - which means any Afternic sales can continue and are not affected by this law. Again this is my interpretation so far.)

- We are stopping using Dan.com and redirecting all lander traffic to Afternic due to this.

- Our Sedo listings will be Make Offer only. If the buyer is a taxable person from an EU country, unfortunately we will not be able to entertain the sale to them anymore.

This might change but preparing and getting ready for this extra headache is going to take time. We have a good accountant but he's already in deep into getting this untangled. Unsure if it is worth the hassle. Domain accounting for thousands of names like we do is a huge challenge already.

Please inform yourself, be aware, get compliant and stay within the law to avoid the nasty things.

Important note: Don't fool yourself that by selling as an individual you're protected from this. You're not. If you are selling domains on a regular basis, you're a business - regardless of being incorporated or not already. Therefore, the law applies to you as well.

Final note: Get legal and accounting advice as I'm just an user here and not an expert in either. So the above still needs to be taken with a grain of salt - it is what I understood so far though. Good luck.

 

[branding]

Yep but the fact that you're not incorporated, does not make you exempt from VAT if you're basically operating a business as a natural person.

It does. You cannot legally charge VAT if you're a natural person as there's no way for the government to collect without being registered. You're not exempt from paying your income taxes obviously. May be different depending on what EU country your in.

 

[twiki]

Some clarification is needed:

- Whet

It does. You cannot legally charge VAT if you're a natural person as there's no way for the government to collect without being registered. You're not exempt from paying your income taxes obviously. May be different depending on what EU country your in.

You cannot also legally operate a business like that if you're not registered and abiding EU laws for this.

Talk about this with your lawyer.

 

[twiki]

Some clarifications are in order now:

- I'm just raising awareness about the law here. I am to be consider neither right or wrong. The only ones who should advice you are your accountant, and especially your lawyer. I am just an opinion here among many.

Edit: Again my only point here is: Take this to your lawyer and ask them to analyze your context, situation and whether this impacts you or not.

In fact you could consider me wrong already because at least one of the things I said here (or more) are prone to be wrong since I am not a lawyer, and especially not Your lawyer, from your country and understanding the situation.

- The decisions I took to protect from this are not necessarily good ones or the best. Don't straight mirror what I mentioned in the post (what we do)

In fact it's all transitory. I'm awaiting results from our law firm and based on that will continue one way or another. For the moment I'll be switching to make offer on platforms and see from there. As a side note in my case EU sales are rare so the impact is small.

I'll probably be looking into registering for OSS at some point this year cause we're growing. And we might need it for future different business as well. We've paused EU sales just as a temporary mitigation for now.

- China -based sellers are probably unaffected since the EU has no way to enforce anything there. But in htis case the EU might turn its focus on platforms instead, on the medium term. (Edit: so indirectly Chinese sellers might find themselves unable to sell via certain platforms at some point next - to be seen yet though)

- Suggestion: I believe it would be a major asset if domain platforms would register for OSS. (@Dan, what do you think?)

This could save a lot of hassle for the sellers and be a great USP for platforms who add this early. Unlike the small seller, domain platforms have the power and the accounting, and the tech etc to implement this properly.

On longer term I guess most if not all sales platforms of all sorts might need to enroll into the thing already - this is where it all seems to go right now.

 

[branding]

Some clarification is needed:

- Whet


You cannot also legally operate a business like that if you're not registered and abiding EU laws for this.

Talk about this with your lawyer.

Yeah, like I said. You should register as a business or at least as a sole trader once you start doing the numbers. Up to a certain threshold it's perfectly legal to trade as a natural person. Is it wise? No... A proper business structure will deal with a lot of possible liabilities.

Don't have to consult a lawyer for that as my businesses are all registered Saves on tax, expenses and what not.

Point being, people making the odd sale here and there (which would go for a big lot of people) should never charge vat if they're not registered as that's actually an offense.

Circling back to what the topic is actually about...

What @DAN.COM posted makes sense to me. Have been somewhat following the subject as a lot of things changed recently. If you have a good accountant there's probably little to worry. I trust mine.

People should figure out what's applicable to their situation and if they need to charge vat, do so and don't forget to take that into consideration setting your sales price.

Disregarding the tax law change, great thread to raise some awareness about issues people could run into once they scale up.

 

[twiki]

Yeah, like I said. You should register as a business or at least as a sole trader once you start doing the numbers. Up to a certain threshold it's perfectly legal to trade as a natural person. Is it wise? No... A proper business structure will deal with a lot of possible liabilities.

Don't have to consult a lawyer for that as my businesses are all registered Saves on tax, expenses and what not.

Point being, people making the odd sale here and there (which would go for a big lot of people) should never charge vat if they're not registered as that's actually an offense.

Circling back to what the topic is actually about...

What @DAN.COM posted makes sense to me. Have been somewhat following the subject as a lot of things changed recently. If you have a good accountant there's probably little to worry. I trust mine.

People should figure out what's applicable to their situation and if they need to charge vat, do so and don't forget to take that into consideration setting your sales price.

Disregarding the tax law change, great thread to raise some awareness about issues people could run into once they scale up.

Indeed, great comment. Awareness raising, definitely check this out, and have a great accountant (and lawyer may I observe). See if it applies to you or not, and whether it might bite you in the future.

Don't automatically assume either situation, and make sure you'll be safe; not just now but plan for the future as well (whether you are growing your sales might be an important factor).

Edit: Very small sellers:

Indeed you would probably still be flying under the radar at least for a (longer?) while.

(And there's a ton of them - so I guess that's what @Dan was referring to, and they have a point there.)

Still, I'd check everything out just to make sure. So it depends.

 

[branding]

I ran into this which might be interesting regarding sales venues:

Platforms with an active role need to pay VAT
Entrepreneurs are responsible for paying the VAT on products they sell through an online platform. With the new VAT rules the online platforms are responsible for the VAT if the platform has an ‘active role’. An active role means more than just bringing together online supply and demand. For instance, enabling orders and payment of products. In that case, instead of the supplier, the platform delivers the products to private customers. Because of this, the platform pays VAT to the country where the customer resides.

https://business.gov.nl/amendment/new-vat-rules-international-e-commerce/

 

[twiki]

I ran into this which might be interesting regarding sales venues:

Platforms with an active role need to pay VAT
Entrepreneurs are responsible for paying the VAT on products they sell through an online platform. With the new VAT rules the online platforms are responsible for the VAT if the platform has an ‘active role’. An active role means more than just bringing together online supply and demand. For instance, enabling orders and payment of products. In that case, instead of the supplier, the platform delivers the products to private customers. Because of this, the platform pays VAT to the country where the customer resides.

https://business.gov.nl/amendment/new-vat-rules-international-e-commerce/

Hmm, very interesting indeed, thanks!

It also validates my earlier note - EU is definitely going against platforms to have them all implement this. And this would be the best solution for all sellers I must observe since smaller sellers have no power to actually get this done.

 

[sircc]

This is absolutely not the case. No US/Non-EU buyer/seller will have to pay EU VAT now or in the near future.

The EU VAT rules are only applicable when the domain seller is a VAT registered EU company and the buyer is also from the EU.

Thank you!
This should dissipate any doubt about non-European sellers.

 

[johnn]

Ebay did issue the news since the beginning of the year:
https://www.ebay.com/help/selling/selling/vat-obligations-eu?id=4650

The simply way would be ask the buyer to move to the US or any Asian Country. Sell the domain to them and they can move back to their own country.

 

[redemo]

@DAN.COM Sorry if I missed something in the thread but does U.K. still have some E.U. agreement or not regards to V.A.T. on domain name sales? Cheers.

 

[twiki]

@DAN.COM Sorry if I missed something in the thread but does U.K. still have some E.U. agreement or not regards to V.A.T. on domain name sales? Cheers.

https://ec.europa.eu/info/sites/default/files/brexit_files/vat-services_en.pdf

The short answer is, if you're a business, have volume (taxable person) then yes you need to register for OSS.

"The B2C supplies of telecommunications, broadcasting and electronic services are normally deemed to be situated where the customer is established."

Even without the new OSS it would fall into the non-Union version of MOSS (digital products and services) so the answer is twice yes. You need to do that unless (1) you're not a taxable person, or (2) the platform handles and pays the VAT on your behalf - they are OSS registered themselves.

Edit: No special agreement but this Brexit note clarifies the situation.

 

[zomainhacks]

( Edit: Also Afternic often ups the price via their resellers or GoDaddy Auctions, so in effect they are a reseller - which means any Afternic sales can continue and are not affected by this law. Again this is my interpretation so far.)

Good news for Afternic.

I interpret the law in the same way, but it will be the chaos as usual. Every EU member will interpret the law how they prefer (member states can enforce EU regulations in more restrictive terms) . The jungle as usual.

 

[twiki]

Good news for Afternic.

I interpret the law in the same way, but it will be the chaos as usual. Every EU member will interpret the law how they prefer (member states can enforce EU regulations in more restrictive terms) . The jungle as usual.

If you're in the EU, things are beyond clear.

The only discussion I see is about sellers outside EU, their size, and whether the long hand of the taxman can reach them. I'd bet they can in major states like US/UK/AU etc, but time will tell exactly.

However if you're in the EU, I'm afraid there will be no chaos whatsoever, on the taxman side. Because this isn't new.

This has been here ever since 2015 through the MOSS law. So it's already here, long established. The only difference is that the OSS binds together digital and physical under a "larger shop", establishes the new all-EU 10k threshold, ditches the former EUR 30 min limit (there is no limit) and sets no threshold for non-EU members. The last part is aimed mostly at Chinese sellers and platforms like Ebay.

Edit: If you ask me, from the digital services standpoint (like domains), the changes to MOSS introduced now are not of essence (technically) but rather makes everyone pay unless you're an individual and not operating as a business (only few small personal sales).

Fortunately I had very few sales to EU buyers, overall below the threshold and old thresholds were generous. But now everything has changed. I've also weighted long time the MOSS; to me the character of domains and how you work with them was debatable under MOSS. But the taxman can interpret this in their advantage and unfortunately that interpretation could stick.

Under the new law, the particular character of domains discussion and categorization (immaterial goods /stock or services ? ) and how you sell/process them is no longer a debate ,because it doesn't matter anymore. Everything from needles to elephants as I said is due VAT.

One of the ways I was avoiding MOSS for certain digital products I had (different from domains) was by using a blanket reseller such as Gumroad. That was pretty simple. It was 5% fee but it included the charge/processing fees. The bad part is that they only paid via Paypal so PP took yet another chunk. But it was simpler other than having to to through the MOSS nightmare. Edit: such services still exist but unfortunately can't be used for domains, no escrow, and cannot be connected to a major platform. Good for other digital stuff though.

I've discussed with my accountant which BTW is a very good one, and both agreed that we will go ahead with the OSS. There are disadvantages but on longer term, if you're serious about business, there is no escape from this.

Small sellers outside EU might probably be fine (Edit: for now). Dan was right in one aspect - these would probably make most of their customers, I guess. But if you're doing this seriously, as a business, I would not feel comfortable in sellers' shoes to ignore the law and simply continue as usual. But this is, at least for the moment, everybody's own decision.

The problem for non-EU sellers is this.

The data exists. Platforms will be forced to implement it, and definitely disclose sales data to the taxman. Platforms have the sales data and each and everyone's sales with accuracy. EU can anytime request that data. You think you cannot be touched by the long hand? Think again. Maybe today you can escape, but for how long? 1 year? 3 years? 5 years?

I bet in a few years everyone in established countries like US etc will be touched by the law. Especially with taxation going global lately. And then you'll have a very nasty surprise, EU can hit you anytime with a backlog of sales over many years; 15%-20% of that to be paid immediately, plus fines, plus fees for delayed payment. Depending on the number of years, this can amount to more than you ever made.

This is why I said from the first time that non-EU sellers cannot truly ignore this. Chances are it will return to bite you back hard later. We, the ones in the EU know exactly how this works and under the new data exchange rules and digital world, and EU getting better at it, it's probably a losing game anyway unless you become compliant.

Edit: There will be severe disruption for small sellers, and I bet it already is here. Only after platforms going OSS things will be better. But by then many would probably have lost their business already. Many (non-domainers) import things from China, well with new shipment fees and this, it might be a losing game anyway.

 

[zomainhacks]

If you're in the EU, things are beyond clear.

The only discussion I see is about sellers outside EU, their size, and whether the long hand of the taxman can reach them. I'd bet they can in major states like US/UK/AU etc, but time will tell exactly.

However if you're in the EU, I'm afraid there will be no chaos whatsoever, on the taxman side. Because this isn't new.

This has been here ever since 2015 through the MOSS law. So it's already here, long established. The only difference is that the OSS binds together digital and physical under a "larger shop", establishes the new all-EU 10k threshold, ditches the former EUR 30 min limit (there is no limit) and sets no threshold for non-EU members. The last part is aimed mostly at Chinese sellers and platforms like Ebay.

Edit If you ask me, from the digital services standpoint (like domains), the changes to MOSS introduced now are not of essence but rather makes everyone pay unless you're an individual and not operate as a business.

Fortunately I had very few sales to EU buyers, overall beyond the threshold and old thresholds were generous. But now everything has changed. I've also weighted long time the MOSS; to me the character of domains and how you work with them was debatable under MOSS. But the taxman can interpret this in their advantage and unfortunately that interpretation could stick.

Under the new law, the particular character of domains discussion and categorization (immaterial goods /stock or services ? ) and how you sell/process them is no longer a debate ,because it doesn't matter anymore. Everything from needles to elephants as I said is due VAT.

One of the ways I was avoiding MOSS for certain digital products I had (different from domains) was by using a blanket reseller such as Gumroad. That was pretty simple. It was 5% fee but it included the charge/processing fees. The bad part is that they only paid via Paypal so PP took yet another chunk. But it was simpler other than having to to through the MOSS nightmare.

I've discussed with my accountant which BTW is a very good one, and both agreed that we will go ahead with the OSS. There are disadvantages but on longer term, if you're serious about business, there is no escape from this.

Small sellers outside EU might probably be fine. Dan was right - these would probably make most of their customers, I guess. But if you're doing this seriously, as a business, I would not feel comfortable in their shoes to ignore the law and simply continue as usual. But this is, at least for the moment, everybody's own decision.

The problem for non-EU sellers is this. The data exists. Platforms will be forced to implement it. Platforms have the sales data and each and everyone's sales with accuracy. EU can anytime request that data. You think you cannot be touched by the long hand? Think again. Maybe today you can escape, but for how long? 1 year? 3 years? 5 years? I bet in a few years everyone in established countries like US etc will be touched by the law. Especially with taxation going global lately. And then you'll have a very nasty surprise, EU can hit you anytime with a backlog of sales, 15%-20% of that to be paid immediately, plus fines, plus fees for delayed payment. Depending on the number of years, this can amount to more than you ever made.

This is why I said from the first time that non-EU sellers cannot truly ignore this. Chances are it will return to bite you back hard later. We, the ones in the EU know exactly how this works and under the new data exchange rules and digital world, and EU getting better at it, it's probably a losing game anyway unless you become compliant.

Edit: There will be severe disruption for small sellers, and I bet it already is here. Only after platforms going OSS things will be better. But by then many would probably have lost their business already. Many import things from China, well with new shipment fees and this, it might be a losing game anyway.

The chaos in my view is if viewing Afternic as a reseller or not, the difference is subtle and I think every EU member will see the issue in different ways. The chaos is if afternic says "I'm simply an escrow/marketplace and I don't need to pay VAT (apart on transaction fees in buyer state), seller should." Then you have to demonstrate Afternic is , in fact, a reseller and I'm not sure every EU member will interpret in the same way the matter.

 

[zomainhacks]

I think that in future they will force marketplaces that wanna operate in the EU to collect VAT for every transaction that require VAT payment. Tax agencies reaching sellers outside EU seems to me too much difficult to carry on.

By the way I agree with you that so far stopping sales to EU seems the wisest things to do. Better don't mess up with tax agencies.

 

[tonyk2000]

The chaos in my view is if viewing Afternic as a reseller or not, the difference is subtle and I think every EU member will see the issue in different ways. The chaos is if afternic says "I'm simply an escrow/marketplace and I don't need to pay VAT (apart on transaction fees in buyer state), seller should." Then you have to demonstrate Afternic is , in fact, a reseller and I'm not sure every EU member will interpret in the same way the matter.

In their namepros thread, I think Joe Styler answered the following sellers question. The seller, being EU-based, wanted (was required to) issue invoices, and asked how to obtain buyers details. As per afternic, such invoices should be issued to Afternic, as no final buyers details are disclosed. So, imo, the sellers are safe with afternic, as they are simply selling their domains to US-based entity (Afternic/GoDaddy).

Moreover, GoDaddy buyers from EU will end up on localized godaddy websites, where the VAT will be charged, which will make the taxman happy. In case of other registrars (what if EU-based buyer elects to purchase via Chinese registrar, or via US-based afternic partner registrar that does not care about VAT), VAT may not be charged, but it has nothing to do with our alleged obligations in any way - we the domainers sold domains to US-based Afternic, and, while we are aware that Afternic resold it, we do not know who their buyer is and where is this buyer located. End of story.

For the sake of completeness, it might make sense to determine whether afternic dot com, where the domains can also be purchased, has some sort of VAT setup for EU buyers.

So, generally speaking, Afternic model appears to be the most logical. And,, hopefully, it would become the default model for all marketplaces.

 

[DAN.COM]

@DAN.COM Sorry if I missed something in the thread but does U.K. still have some E.U. agreement or not regards to V.A.T. on domain name sales? Cheers.

The UK indeed has an agreement with the EU in regards to VAT post Brexit. We still handle VAT for UK sellers selling to EU buyers and vice versa.

 

[DAN.COM]

In their namepros thread, I think Joe Styler answered the following sellers question. The seller, being EU-based, wanted (was required to) issue invoices, and asked how to obtain buyers details. As per afternic, such invoices should be issued to Afternic, as no final buyers details are disclosed. So, imo, the sellers are safe with afternic, as they are simply selling their domains to US-based entity (Afternic/GoDaddy).

Moreover, GoDaddy buyers from EU will end up on localized godaddy websites, where the VAT will be charged, which will make the taxman happy. In case of other registrars (what if EU-based buyer elects to purchase via Chinese registrar, or via US-based afternic partner registrar that does not care about VAT), VAT may not be charged, but it has nothing to do with our alleged obligations in any way - we the domainers sold domains to US-based Afternic, and, while we are aware that Afternic resold it, we do not know who their buyer is and where is this buyer located. End of story.

For the sake of completeness, it might make sense to determine whether afternic dot com, where the domains can also be purchased, has some sort of VAT setup for EU buyers.

So, generally speaking, Afternic model appears to be the most logical. And,, hopefully, it would become the default model for all marketplaces.

Just a quick note:

When you're a VAT applicable business seller from the EU, you have to process VAT as determined by EU law. Using a US-based platform that doesn't provide you with the legal documents required to transact can lead to unforeseen issues.

When Afternic sends you a payout, do you get any legal documents like buyer/seller/transaction overview invoices from Afternic? In the EU, the tax agencies check both Buyer & Seller invoices when VAT was applicable to even check if the invoices correspond.

If those invoices as absent or do not follow EU-wide rules and do not represent the situation (domain sale/purchase and the parties involved) you could end up in a bad situation as an EU business seller.

 

[NameFilter.com]

I read in the following document: 'The basic EU VAT rules for electronically supplied services explained for micro businesses.'
"If your services are provided through a marketplace then it is considered that you are supplying the service to a VAT taxable person (i.e. to the operator of the marketplace) who in turn is supplying the service further to the final customer, to a non-taxable person.The operator of the marketplace will be having VAT obligations in Member States where the final customers are located."

I think it is fair to assume that if you sell a domain through Afternic/GoDaddy, for the purpose of VAT, you are providing an electronic service to Afternic/Godaddy (not the final customer). Electronically supplied services are always taxed in the country where the customer belongs, the USA in the case of Afternic/GoDaddy.

 

[twiki]

I read in the following document: 'The basic EU VAT rules for electronically supplied services explained for micro businesses.'
"If your services are provided through a marketplace then it is considered that you are supplying the service to a VAT taxable person (i.e. to the operator of the marketplace) who in turn is supplying the service further to the final customer, to a non-taxable person.The operator of the marketplace will be having VAT obligations in Member States where the final customers are located."

I think it is fair to assume that if you sell a domain through Afternic/GoDaddy, for the purpose of VAT, you are providing an electronic service to Afternic/Godaddy (not the final customer). Electronically supplied services are always taxed in the country where the customer belongs, the USA in the case of Afternic/GoDaddy.

Afternic is indeed safe. Afternic is BTW a reseller network, not a content/listing distribution network. Edit: They buy it from you and resell further including adding undisclosed markup that you don't know about but it's in their terms.

GoDaddy is one of their resellers. Beside GD usually adds a small markup as well.

So yes - Afternic is no problem. The others however probably need to implement OSS in my opinion.

 

[kite26]

Afternic is indeed safe. Afternic is BTW a reseller network, not a content/listing distribution network. Edit: They buy it from you and resell further including adding undisclosed markup that you don't know about but it's in their terms.

GoDaddy is one of their resellers. Beside GD usually adds a small markup as well.

So yes - Afternic is no problem. The others however probably need to implement OSS in my opinion.

So you see it wise to put Afternic landers to all my names?

 

[twiki]

So you see it wise to put Afternic landers to all my names?

Everybody decides. Depending on the names, it could be a good option.

I'm increasing many of the prices at the same time of switching landers to Afternic. It went well so far. also the new NS5/NS6 is good for this, better conversion indeed.

I keep all domains however at all other marketplaces, with make offer.

 

[Jurgen Wolf]

GD is not their reseller.
Afternic is owned by GoDaddy (parent company).

 

[BrandPlease]

Historically, in the US, if I were to purchase an item from a merchant that did not charge me (sales) tax - I would be obligated to report that in my personal/business tax filings.

The merchant is prefered to hold taxes but sometimes they dont apply - but the state you live in still applies them to you.

E.G. I live in Massachusetts, we have high taxes on everything. New Hampshire is a 10 minute ride from where I am - theyt have no taxes on just about anything (NO SALES TAX). So if I went to NH to buy a big screen TV, Car,etc.. - a NH merchant would have no responsibility at all to be concerned about a tax that has nothing to do with them.... But, I have to report that tax free purchase and pay my taxes or face a penalty of audited.

if the US doesnt enforce state to state taxes - I am having a hard time understanding how an EU tax scheme would even be recognized? But, I am certainly no lawyer - just thinking out loud here.

Thanks for the info

 

[zomainhacks]

Historically, in the US, if I were to purchase an item from a merchant that did not charge me (sales) tax - I would be obligated to report that in my personal/business tax filings.

The merchant is prefered to hold taxes but sometimes they dont apply - but the state you live in still applies them to you.

E.G. I live in Massachusetts, we have high taxes on everything. New Hampshire is a 10 minute ride from where I am - theyt have no taxes on just about anything (NO SALES TAX). So if I went to NH to buy a big screen TV, Car,etc.. - a NH merchant would have no responsibility at all to be concerned about a tax that has nothing to do with them.... But, I have to report that tax free purchase and pay my taxes or face a penalty of audited.

if the US doesnt enforce state to state taxes - I am having a hard time understanding how an EU tax scheme would even be recognized? But, I am certainly no lawyer - just thinking out loud here.

Thanks for the info

If you are a business and you sell in the EU you have to pay sales tax. What matters it'is the place of the buyer not where the seller resides. They have multiple ways to enforce this, they can force marketplaces to collect sales tax or they can block the website (in EU space) from where you sell products/services and so on. They were able to apply GDPR pretty well in the EU space, so why not for sales tax?