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  1. #26
    Originally posted by idoogleceo

    In my opinion, it's just a way to make their citizens purchase EU services.
    Or non-EU VAT paying hosts

  2. #27
    Join Date
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    I have to agree with some of the others, seem to be a way to make EU citizens buy EU services. As for getting companies here in the US to collect this tax, not likely going to happen. Most of us would drop accepting customers from countries in the EU.
    David White
    Owner/Operator
    http://www.liftnw8.com
    Is Your Host Weak?

  3. #28
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    Originally posted by idoogleceo

    However, hosting is an unregulated....
    At least it was

    And in my eyes this is at least Fair, for EU companies, I mean until now non-EU based companies had more competitive position , as they were able to setup lower prices due not having to add VAT to their prices.

    I mean it is not that non-EU companies will be banned from doing business, it is just that they have to obey to same rules as EU companies do.

    So, it is not that EU customers will prefer EU companies beacuse of this TAX, it just that US (and rest of the world) will loose their "we are cheaper 'cus we dont have to pay tax" position.

    fair? not?

  4. #29
    Join Date
    Jun 2001
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    Toronto, Canada
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    35
    There's a little bit of insight here.. and some tools that might help:

    http://www.thewhir.com/features/euro-vat.cfm
    The Web Host Industry Review
    http://www.theWHIR.com
    "All you need to know about Web hosting"

  5. #30
    The first billing software package to include a VAT feature, which charges VAT at a rate depending on the country the customer is in, and automatically adds up the VAT returns, will be laughing all the way to the bank....

  6. #31
    Join Date
    May 2003
    Location
    Veles, Macedonia
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    Good point Angel78. Simply said - EU citizens will start looking for banners saying EU costumer friendly and deal mostly with them.

    Webhosting is business. Businesses have to pay taxes. Do consultants invoice taxes of their non-tangible services? YES they do. And their services are even more in-tangible then hard rock servers crunching bits somewhere....

    As for the EU - no hard feelings but I come from Europe. Not yet in EU but joining the group in forseeable future. I do respect EC's solution to protect the VAT system (which is by far the best taxation system offering public health, public transport and so on). EU web hosts and resellers in fact NEED VAT paying DC - that way they will get invoices with EU VAT calculated. They make costumer invoices with EU VAT included as well. They pay the tax only on their profit margin. So they actually don't PAY anything as middle-men and they stay legit. This is also a matter of cache-flow control from the IRS service in EU - you can't just offer hosting from vacuum - you either need to offer the hardware or the leasing agreement as proof of your sources. And if these proofs are not VATed - then you are in a really deep trouble.

    Yes I am very happy with this development because this will kill all kid-hosts which wont have the know-how, energy or will to deal with taxes and accountants. Thus providing higher quality and legal business to EU costumers you will find real competiton not suffering the online gray economy dealers. Second point - I am starting building some e-stores for some German companies - and they absolutely asked me to have all VAT clearly legal and paid - so EU is already is informing the businesses somehow.

    And if we implement all these things - then the EU hosts are not that expensive. Do you know who's on netcraft's no.1 list of dedicated hosts in the whole world for quite some time???

    Schlund - a german only site!!!

    So what are the implications?

    - Only serious hosts will deal with EU costumers (and not only EU since the synchronization process implies similar regulations in all future EU members as well). This will also mean legal control over e-commerce trade - which must be done!

    - The serious DCs will start opening offices in EU. Rackspace is here as well as some other - hopefully some day we'll see Rackshack.eu

    - EU will protect EU based DC's and hosts from unfair dollar/euro competition

    - Hopefully EU will find resources to attract backbone carriers to spread their "pipes" around future member countries and distant members (such as Greece).

    Therefore - EU taxation will mean fair business with European costumers. Like it or not that's how the things are going...
    -=========================-
    MalinaNET.com Internet Solutions

  7. #32
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    Veles, Macedonia
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    Just to add some thing - you might not understand - why so many taxes and so high taxes in EU? - Simply USA is based on conservative business-friendly concept and EU is based more on social-democratic concept of fair living for everyone (definitely not Darwinistic towards it's citizens). But all these free education, schools and transportation eat a lot of money - so they need higher taxes. And control of the flow of money. That's the main thing why they implied this regulation - to controll the flow and tax it.

  8. #33
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    Feb 2001
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    Long Island, NY
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    And what will EU do if the US passes a reciprocal tax requiring European vendors to pay a US VAT at the same rate as that country forces US businesses to charge?

    Not legal? Maybe, maybe not. But I'll tell you what would probably be legal. Require EU countries to collect sales tax on sales to US consumers. US has 50 states, each with a different rate. If fact, in some states (like NY) you have different rates by city and county.

    The real burden to non-EU businesses in this VAT thing is the accounting and dispatching of money to multiple jurisdictions, chasing the businesses away from dealing with EU customers. Are you folks in Europe ready to start looking up the sales tax tables in Havre, Montana, Intercourse, Pennsylvania, and Peoria, Illinois?

    Saucis Goosis Est. Saucis Ganderis Est.

  9. #34
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    That's where guys like me fit in - Consulting companies

  10. #35
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    If EU based customers are required to claim all monies paid to US hosts themselves and remit the correct amount of taxes themselves, fine...but I'm not going to worry about it.

    If it gets to the point to where it is an enforcable crime to not collect VAT, I'll just turn down EU customers. I focus on US businesses anyway, so no big deal to me.

  11. #36
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    yes that's one of the options also.

  12. #37
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    Feb 2003
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    Lake Arrowhead, CA
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    Originally posted by dynamicnet
    Greetings:

    Hmmm... sort of reminds me of the Boston Tea Party....

    Taxation without representation.
    Hey! I was going to say that.
    Dale Poncy
    Retired from Zana Web Hosting

  13. #38
    Join Date
    Mar 2001
    Location
    London, England
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    335
    Originally posted by NJHosting
    Most of us would drop accepting customers from countries in the EU.
    I think you've probably hit the nail on the head. I would imagine that is what the EU is trying to achieve. And guess what, more EU consumers would have to buy homegrown hosting which in turn = more tax revenue for our govt's.
    ••• Mark Castle •••
    ••• www.captivereality.com •••
    ••• domainlabs.uk •••
    My views are my own and not those of my company.

  14. #39
    Join Date
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    Central NJ
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    That is what I see also, they are forcing the US companies out so that EU people are buying EU products, that would be like the USA saying that no one here could buy any products unless they were manufactured in the US, I guess we wouldn't be buying much here if that were to happen.
    David White
    Owner/Operator
    http://www.liftnw8.com
    Is Your Host Weak?

  15. #40
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    Actually, they are not, it simply that a 11,7 € hosting plan ( we imagine , the same specs...etc) which consumer can buy from EU company, he could buy it from US company for 10, € because US based companies didn’t had to charge the sale tax, if you were a consumer which option would you choose?

    10 or 11,7 ? (So until now non_EU based companies had benefits and were able to ahmm use "predatory pricing" to take over the EU - market)

    It's not that you benefit being a EU based company now, it's more like that now US and EU companies are equal, And you will still continue to earn 10 € on that package but you will not be able to make EU companies look bad because they have to price it at 11,7 €.

    Sure, the "free lunch" is gone ( will be gone from 1st of July) but life goes on.

    And yes i do think that there should be some reactions by US government ( so EU based companies will also have to pay tax for their US customers, because they would be able to profit from the same situation US companies use now) by adding some sort of "import tax", but as I mainly serve/have EU and European customers it wont affect me that much, but it is fair.

  16. #41
    Join Date
    May 2001
    Location
    Colorado, USA
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    814
    Hey, you know - my servers are in the US and the data center has only US connections to the Internet. I am US-based and I am a US citizen. I am offering my services in the US.

    The client might be in Europe but hey - they are on my server reading my web pages, spinning my hard drives and using my US CPU's and memory on US electricity. I don't care about the EU until I run code from a EU server or have a location down there. Until then I see it that I am being visited in the US by somebody from Europe.

    It's just simply greed taxing US-based companies that do not have any physical or virtual presence in the EU. Where's the finger smiley?! ;-)

    TF

  17. #42
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    Colorado, USA
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    Oh, forgto to say - it's like forcing a merchant at the Grand Canyon to collect VAT on items they sell to Europeans. Forget it. Screw the EU.

  18. #43
    Join Date
    Jul 2001
    Location
    Canada
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    It should work the way it does in Canada. If I buy something from out of country, I am required to remit the GST (Canadian equivalent of VAT) to the government as the purchaser since the seller is out of country, and there is no obligation on their part to collect it. The only time there would be an obligation for, say a US company, to collect the GST would be if they had an office or other legal presence in Canada.
    "Obsolesence is just a lack of imagination."

  19. #44
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    Vienna, Austria
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    Originally posted by TheFish
    Oh, forgto to say - it's like forcing a merchant at the Grand Canyon to collect VAT on items they sell to Europeans. Forget it. Screw the EU.
    Grand Canyon = USA ( tourist are in the states )
    Your EU customer = EU ( is not in the us )

    get the difference?

    One of the most difficult exams I had this year was Austrian Tax Law (EU - conform), and these "services" : hosting, downloadable goods cant make exemptions, there is a option to let customers pay this tax ( like import tax ) but that would be hard to control ( it is easier to control few hosters ).

    I mean it is easy, if you dont like it put a huge banner (EU RESIDENTS GO AWAY), but I do think that we will be informed that we have to check if the host is ok (probably some sort of registration somewhere) otherwise we ( eu residents) will have to pay penalties, so be sure that most will switch to other hosts.

    This will be hard to implement, but I see it as a good decision, as it will push out all the 10-15 yr old hosts ( allready mentioned by someone) and people that really have no idea about doing business ( Taxes, Marketing, HR...etc )

  20. #45
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    Sep 2002
    Posts
    522
    Originally posted by NyteOwl
    It should work the way it does in Canada. If I buy something from out of country, I am required to remit the GST (Canadian equivalent of VAT) to the government as the purchaser since the seller is out of country, and there is no obligation on their part to collect it. The only time there would be an obligation for, say a US company, to collect the GST would be if they had an office or other legal presence in Canada.
    That's what I was talking about...I didn't know Canada did it that way, though.

    If they do it this way, I'm fine. If I have to worry about charging VAT, I'll just sell off my EU customers and close new signups to them.

  21. #46
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    Nov 2000
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    3,046
    Originally posted by NyteOwl
    It should work the way it does in Canada. If I buy something from out of country, I am required to remit the GST (Canadian equivalent of VAT) to the government as the purchaser since the seller is out of country, and there is no obligation on their part to collect it. The only time there would be an obligation for, say a US company, to collect the GST would be if they had an office or other legal presence in Canada.
    That's how they would have to do it. There is absolutely no way to force that on companies based in the US since EU law doesn't matter for crap here, and vice versa. But at the same time, how many people are actually going to say "Damn, I'd really like to pay 20% more for my hosting, so I'm definately going to be telling the EU Tax Authority about my US hosting account". It's not like the EU can force a US company to give them private info on their customers
    A well-reasoned assumption is very close to fact.
    - Adorno

  22. #47
    Join Date
    Sep 2002
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    522
    Originally posted by Angel78
    This will be hard to implement, but I see it as a good decision, as it will push out all the 10-15 yr old hosts ( allready mentioned by someone) and people that really have no idea about doing business ( Taxes, Marketing, HR...etc )
    It will also push out good businessmen who know all about Taxes, Accounting, Marketing, HR and who understand that if their profit from hosting EU customers does not offset the additional legal and accounting expenses (time/cost/hastle), then they will drop them. It can be assumed, though, that this is one of the desired results.

  23. #48
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    @ comphosting :you are completly right, they cant hide that fact, but it is the same thing as writing wrong numbers in the book's (ENROn..etc) it is tax cheating and there are huge penalties for that.

    but, they have to caught you first ( is it wort risking a penalty of few 1000 € for 20-50 that you may save?)


    @7out

    Off course, that why not every mom and pop shop is exporting to other coutries. Costs are too high.

  24. #49
    Join Date
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    3,046
    Originally posted by Angel78
    @ comphosting :you are completly right, they cant hide that fact, but it is the same thing as writing wrong numbers in the book's (ENROn..etc) it is tax cheating and there are huge penalties for that.

    but, they have to caught you first ( is it wort risking a penalty of few 1000 € for 20-50 that you may save?)
    No, but ENRON managed to bankrupt or nearly bankrupt THOUSANDS of people... so your comparison is pretty poor. I can say there's the big loophole, because (A) I'm not from EU so I don't care about their rules. (B) It pisses me off that they are trying to push American business out of the market. Maybe if their connectivity were better, people would actually use an EU based webhost .
    A well-reasoned assumption is very close to fact.
    - Adorno

  25. #50
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    cmon I was joking about Enron, but you do get the point? It is illegal to do what you have sugested = get a account and keep your mouth shut.

    And actually conectivity is ok, i have better ping's to local DC's but they cost much more ( because they lost huge market share to US Dc's and can not profit from EoS )

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