I buy a lot of stuff from Amazon for work. We are a small business so it's important that we get all the VAT invoices for purchases where available.
I have lost count of the number of people who mysteriously are not VAT registered, or will not provide an invoice no matter how hard I try. You get to know who the bulshitters are pretty quickly but it's still a problem.
Small businesses with revenue of less than 100K a year* can opt-out of VAT registration hence will not charge VAT and thus cannot generate you a VAT invoice.
And as far as "marketplaces" go the HMRC's own website says that you can use 3rd party websites to actually ignore the VAT MOSS requirements as the site's operator should handle it for you.
While there ofc is a way for marketplace providers to throw the liability back into the hands of the small business which uses them I have a strong feeling that neither Amazon nor eBay make it particularity clear or advertise it, add to that the open endorsement that HMRC and various small business "associations" gave marketplaces as a easy tool to reduce the VAT burden on small businesses and you might have quite a few instances of unintentional "fraud".
*I'm assuming since you are commenting on a UK specific issue you are in the UK if you are not there might be other regulation or different caps for small businesses to opt-out of VAT.
Unfortunately that's almost correct. See, if you sell to a Spanish citizen you now are unable to opt-out of VAT, because Spain does not have such a minimum. The whole VAT/sales tax situation in the EU is incredibly complex and it's little issues like the one you missed that can completely mess up your otherwise orderly run company.
*Resident of Spain, not Spanish citizen. Big difference. With the exception of the residents of Canary Islands, Ceuta, Mellila, which are part of Spain and the EU, but not part of the EU VAT area.
There is so much nonsense with the new VAT regulation and so much internal contradiction that I'll be surprised if it won't explode within a year or so.
Have you asked them for one? VAT receipts need only be issued to VAT-registered buyers, so they might not issue them by default. (I've never dealt with Github, so they might genuinely be being dicks about it.)
That affects their risk profile, not whether or not it is legal. The EU has specific rules that affect foreign sellers selling products and services to customers in the EU, irrespective of where the seller is located.
"If you knew that fraud was being committed you are liable," she added.
"If you should have known that fraud was being committed, you are liable
as well."
So I hope you informed the proper authorities promptly!
Here's an example from the UK. This seller has been operating for months on eBay selling millions of pounds worth of Apple gear.
15" Macbook Pro. 2.2GHz Processor. 256 GB Storage
===
from Apple [0]
£1,599 including VAT
£1,332 exc. VAT
--
from Electronic King Inc. on eBay [1]
(shipped from UK)
£1,219 presumably no VAT.
--
Apple USD price $1,999 = £1,328.
--
The seller has a UK address as contact details. And is using a mobile phone and a gmail address (ebayprincess05--@gmail.com).
There must be something more than avoiding VAT happening here. I thought for a while that this might be a fraud. Even with them evading the VAT I can't understand how they're turning a profit. My assumption was that they're building up feedback before just disappearing with a week's worth of sales. But 46,000 feedbacks is way beyond what's needed for that. Some of the feedback definitely looks suspicious - a high proportion of low-feedback buyers have bought exactly two of the same item.
I bought my MacBook off eBay cheaper than on the Apple site or Amazon. It also came with AppleCare. It was brand news as well. It has a US keyboard (@ symbol over the 2) and came with a US plug AND a UK plug.
I can tell you how it works in Poland. Ebays direct competitor in central/east europe is Allegro https://en.wikipedia.org/wiki/Allegro_(auction_website), Polish tax collection agency bought software that lets them scan Allegro auctions as far back as 2007. They started suing INDIVIDUALS (not companies/corporations, those usually know how to "legally" pump profits out of the country, just like Amazon/FB do) and are winning in courts. We are talking woman selling used baby clothes here, not electronic retailers importing containers worth of stuff from asia.
UK's HMRC have neither the skill, the resources, nor the political inclination to do something like that.
The EU still has a huge issue with VATMOSS. The idiot bureaucrat in the EU responsible for the mess has been moving over to an exemption for small businesses - which he thinks should be around £5k, and not the £100k which would be more sensible.
I've heard stories of tax inspectors telling small businesses just to ignore VATMOSS.
Bottom line - considering that Amazon gets away with paying so little tax in the UK, I'll be surprised if this is more than PR effort.
I visit a food & craft market every weekend in the UK to browse and get lunch. Should it be the responsibility of the market owners to ensure each stall is charging and reporting VAT to the gov?
Maybe, especially if it's the kind of market where you buy "tokens" from the market owner to exchange for food. (Common at music festivals, theme parks etc.)
The problem with inter-governmental cooperation is that it can very quickly degenerate into cartelization, which limits the ability of the people to select a 'good' place to live (as their options become homogenized).
they are standardized in the EU actually. Standardization started in 1977. but since 2007 stuff got more serious. The real problem is that each country have a different rate, but for the rest, it's quite smooth. Tax issues across countries in Europe are often easier than in the US from what I read around.
One issue I have with the article is asking Amazon, a notorious tax dodger, to enforce some tax rules on others doesn't seem like the right way to go.
TLDR There are too many different rules and regulation regarding how, when, at what rate and why and on what VAT should be collected and these local regulations have some many caveats that it very difficult to be 100% compliant locally not to mention globally within the EEA market. Add to that the fact that you have various VAT exemption rules that govern when and how businesses and individuals can become VAT exempt (e.g. small businesses, non-profits, charities, disabled or terminally ill individuals, etc.) and you get a steaming pile of horse shit.
They both also need to clear up basic fraud from 3rd party sellers on their platform selling fake or similar products by taking over previous listings/reviews.
I don't know how this works with eBay but can tell you what the issue is with Amazon US.
In simple terms they are pulling a fast one by making third party vendors responsible for sales tax. Amazon benefit from vendors who ignore this by having a marketplace where buyers can avoid sales tax, which can amount to a significant chunk of change.
Why do vendors avoid it? Well, it isn't necessarily because they want to defraud the government. It's because of how ridiculously complex the system can become.
If Amazon were responsible for the collection and payment of sales tax it would be super easy. They make the sale, collect the money, have the data and can automate the entire thing.
What does it look like for third party vendors using FBA?
Well, let's say you have a business registered in, Nevada. No state sales tax there. However, by selling through Amazon and using FBA you now have to be aware of something called "nexus".
If your little box containing your widget is located and shipped from an Amazon warehouse located in California you now have to register in California, obtain a resale permit, collect, file and pay sales tax in that state. And, of course, you have to do the same with every state where Amazon has a warehouse. I think the number is somewhere around 16 states. In other words, it's a mess and a nightmare.
Amazon could make this super easy by collecting, filing and paying sales tax themselves but, for some strange reason, they've managed to convince government folk that THEY are not the sellers. This, of course, is ridiculous. Amazon allows businesses to list and sell on their platform but it is no different from selling to Walmart. Amazon has total control over absolutely everything. In that sense it isn't like eBay at all where you truly are the seller.
BTW, as I understand it, the whole business of "nexus" connected to Amazon warehouse locations is still something that has not been fully sorted in law. I've read opinions on the side of single state nexus (meaning, you are only responsible for sales taxes where your business has is located and nowhere else) as well as the exact opposite case where you have to register, collect, file and pay on every state your product is stocked at an Amazon warehouse.
I sell apps on Google play from the UK. Google keep the VAT even for UK sales. According to my accountant they shouldn't do this. If they're paying the VAT on my behalf, where's my paperwork because (1) can they do this and (2) when i book sales, according to HMRC, i owe the VAT which i haven't received.
I have lost count of the number of people who mysteriously are not VAT registered, or will not provide an invoice no matter how hard I try. You get to know who the bulshitters are pretty quickly but it's still a problem.