Date: 2011-11-09 11:27 am (UTC)
From: [identity profile] henriksdal.livejournal.com
ahhhh so that's why everything you order online seems to come from Jersey!

Date: 2011-11-09 11:50 am (UTC)
drplokta: (Default)
From: [personal profile] drplokta
So, which territory outside the EU VAT area (which is a bit bigger than the EU) other than the Channel Islands has the cheapest/quickest shipping to the UK? All those companies need a new home. Gibraltar? Andorra? Svalbard? The Faroes? San Marino? The US?

Date: 2011-11-09 12:13 pm (UTC)
From: [identity profile] a-pawson.livejournal.com
Gibraltar is not considered part of the EU for VAT or customs purposes so you can't import goods from there without paying duty.

However there are several other territories which are inside the EC customs area but outside the VAT zone:

Andorra
The Åland Islands (Finland)
The Channel Islands
The Canary Islands (Spain)
The overseas departments of France (Guadeloupe, Martinique, Reunion and French Guiana)
Mount Athos (Greece)

Date: 2011-11-09 01:46 pm (UTC)
From: [identity profile] skington.livejournal.com
More than this, according to a list that work's finance department sent me. There's the Faroe Islands and Greenland (Denmark), Busingen and the Isle of Heligoland (Germany), the Azores and Madeira (Portgual), Ceuta and Melilla (Spain), and, best of all, in Italy, the communes of Livigno and Campione d'Italia and the Italian waters of Lake Lugano.

I didn't Google all of them, but the German and Italian ones look like they're partially or entirely inside the Swiss borders.

Date: 2011-11-09 12:11 pm (UTC)
From: [identity profile] a-pawson.livejournal.com
Whilst I as a consumer will lose out as a result of closing the VAT loophole, I'm very glad they are doing it. When internet shopping started out it was only a few small companies who took advantage of it, and they were at a disadvantage due to the higher costs and slower service offered by the Royal Mail.

But now the likes of Tesco, Amazon and Asda have all moved their dispatch businesses there it's just ridiculous to allow it to continue. The disadvantage caused by the mail service has also gone because the Royal Mail lowered the cost of postage to/from the channel islands and put on daily flights to satisfy the demand.

Given the very low profit margins on these sort of goods, it is now pretty much impossible for a company based on the UK mainland selling low value consumables such as say ink cartridges or CD's to remain competitive.

Date: 2011-11-09 01:32 pm (UTC)
From: [identity profile] bart-calendar.livejournal.com
The Internet VAT thing is the one thing the US actually did right. (Though we call it Sales Tax instead of VAT.)

In order to keep companies from moving weird places just to avoid the sales tax, we don't charge sales tax on goods ordered through the Internet. That means that Amazon and such build warehouses and creates jobs where it makes sense to create them, not simply where they can dodge taxes.

Otherwise every major online company would have moved their offices to New Hampshire where there is no sales tax.

Date: 2011-11-09 01:40 pm (UTC)
From: [identity profile] bart-calendar.livejournal.com
Well.. but eventually it will lead to every major online company being based in Andora.

Date: 2011-11-09 01:45 pm (UTC)
From: [identity profile] bart-calendar.livejournal.com
I wonder if Amazon and Tesco etc... could simply pool their money together to but a decommissioned aircraft carrier or two to act as their warehouses and simply anchor them in international waters off the coast of England and avoid the VAT.

Date: 2011-11-09 01:51 pm (UTC)
From: [identity profile] a-pawson.livejournal.com
But then the VAT would have to be paid by the consumer when the goods enter the country (as currently happens with goods purchased outside the EC). The current loophole only works if you sell/ship the goods form somewhere which is inside the EC customs area but outside the VAT zone. That these are different is crazy but mostly is a result of archaic legislation.

Date: 2011-11-09 01:47 pm (UTC)
From: [identity profile] skington.livejournal.com
Europe has a much higher VAT (18-20% typically) than US sales tax, though.

Date: 2011-11-09 01:52 pm (UTC)
From: [identity profile] bart-calendar.livejournal.com
That's why your citizens have health care, a social safety net and affordable university tuition and we don't.

Date: 2011-11-09 01:53 pm (UTC)
From: [identity profile] a-pawson.livejournal.com
That seems rather unfair to anyone operating a physical shop.

Date: 2011-11-09 02:01 pm (UTC)
From: [identity profile] bart-calendar.livejournal.com
Well, because of the way drop shipping companies work, Internet based companies will always have an advantage over physical stores price wise.

But the physical stores have an advantage as well. If you order from Amazon you'll pay less but get your product in three to five days and if the package is large have to go to the post office to pick it up.

If you go to a physical shop you pay slightly more but you get the product the day you buy it. For many people and products that's a crucial advantage.

Plus physical shops can accept cash while online shops can't and there are many people who need to use cash (teenagers, people without credit cards, people who work jobs where they are paid in cash and don't want to put it in a bank and pay taxes on it, etc...) which is another advantage to physical stores.

Beyond that, lots of products can not realistically be sold over the Internet because of their size or weight. I supposed I could purchase a large television or refrigerator over the Internet and save some money on the base price of the item, but the shipping costs I'd incur would be so much that I'd end up paying far more than if I just went into a store and bought it and loaded it into someone's car or truck.

Date: 2011-11-09 02:18 pm (UTC)
From: [identity profile] a-pawson.livejournal.com
I get the impression things are different in the US due to the size of the country, which increases distribution costs dramatically. Here in the UK, if I order something from Amazon it arrives tomorrow morning. With quite a few online retailers I can order something as late as 8pm and still get it the next morning, even large items such as a TV or a printer. Our courier companies all have distribution networks which can deliver to all but the most rural parts of the country overnight.

There will always be an advantage for online retailers in terms of lower operational overheads, but to be given a tax advantage as well seems odd to me.

Date: 2011-11-09 02:25 pm (UTC)
From: [identity profile] bart-calendar.livejournal.com
Man, that must be nice. When I was living in the States it was always three to five days to get something unless you were willing to pay extra for FedEx (which would essentially double the price of your order.)

Even here in France (a much smaller country than the US) it takes three to five days for Amazon stuff to arrive.

In the US the tax advantage assures that Internet based companies will not end up all concentrated in one state that simply decides to not tax something. Otherwise Amazon, instead of employing people in dozens of states, would only have employees in New Hampshire. That would be great for New Hampshire but put thousands and thousands of people across the country out of work.

Beyond that, an argument can be made that the online retailers are putting just as much if not more more money into government hands, because the post office is part of the federal government, and those companies are giving them a lot of postage (which physical stores are not.)

Date: 2011-11-09 11:44 pm (UTC)
From: [identity profile] brixtonbrood.livejournal.com
I bought my new fridge on the internet recently - most people I know do buy that sort of large boring thing online nowadays.

Date: 2011-11-09 05:05 pm (UTC)
From: [identity profile] channelpenguin.livejournal.com
I used to say that Pringles were made by taking potatoes apart into their constituent parts, deep-frying each molecule, then puttign them back together in Pringle shape, then frying them again. I wouldn't touch ANY Pringle with a bargepole.

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