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Basics:
Value added tax - Wikipedia, the free encyclopedia

The European Union Value Added Tax (EU VAT) is a value added tax encompassing member states in the European Union Value Added Tax Area. Joining in this is compulsory for member states of the European Union. As a consumption tax, the EU VAT taxes the consumption of goods and services in the EU VAT area. The EU VAT's key issue asks where the supply and consumption occurs thereby determining which member state will collect the VAT and which VAT rate will be charged.

Each Member State's national VAT legislation must comply with the provisions of EU VAT law as set out in Directive 2006/112/EC. This Directive sets out the basic framework for EU VAT, but does allow Member States some degree of flexibility in implementation of VAT legislation. For example different rates of VAT are allowed in different EU member states. However Directive 2006/112 requires Member states to have a minimum standard rate of VAT of 15% and one or two reduced rates not to be below 5%. Some Member States have a 0% VAT rate on certain supplies- these Member States would have agreed this as part of their EU Accession Treaty (for example, newspapers and certain magazines in Belgium). The current maximum rate in operation in the EU is 25%, though member states are free to set higher rates.

Some rules:
European Union Value Added Tax Area - Wikipedia, the free encyclopedia

When goods or services are sold to a company across a border within the area, either the buyer pays the sales country's VAT to the seller, or it is possible to register the transaction as an inter-company sale with no VAT being collected. If VAT has been paid the buyer can include it in their VAT accounts just like VAT paid locally.

When goods or services are sold to a private person across a border within the area, the buyer usually pays the sales country's VAT to the seller, and does not pay any local VAT. But if the seller's annual sales of goods to the buyer's country exceed a threshold (which varies by country), the seller must instead charge VAT in the buyer's country. These are known as the distance selling rules.[1]

EU sellers may validate the VAT number of a buyer residing within the EU Value Added Tax Area using VIES.

So far it looks fairly well thought out considering there is a mix of national systems with a federal patching.

I also note:

European Union Value Added Tax Area - Wikipedia, the free encyclopedia

Areas with special rules
  • Sweden does not want to accept the VAT union regarding alcohol (see Systembolaget) and tobacco shipped to private persons.

There might be other things we would like see taxed for social or environmental reasons. Maybe something about countries having that possibility should be included.

Sweden's finest (and perhaps only) collaborative, leftist e-newspaper Synapze.se

by A swedish kind of death on Sat Dec 18th, 2010 at 02:59:00 PM EST

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