According to the new EU regulations that will take effect on January 1, 2015, Internet retailers such as Google and Amazon will, in accordance with the relevant laws and regulations of the country where the consumer is located (to the consumer where the consumer is located). country) pay the corresponding value-added tax (VAT).
From a report in the Croatian media on May 3, we learned that the new EU regulations that will take effect next year mean that Croatia will obtain additional benefits from Internet transactions. Up to now, Internet-based transactions of goods and services such as electronic games, software, music, online auctions, and Internet hosting services are subject to VAT levied by the seller. Large companies that sell these goods and services through the Internet generally choose to conduct business operations in countries and regions with very low VAT rates, such as Luxembourg, whose VAT rate for e-commerce is only 3%.
It is understood that in 2013, 32% of Luxembourg’s government revenue came from e-commerce value-added tax, reaching 950 million euros. Roman Heinen, director of the Luxembourg Tax Office, predicts that this revenue will be expected to exceed 1 billion euros in 2014, but is expected to fall again in 2015 because the value-added tax will be paid by buyers.
In fact, in addition to Luxembourg, the e-commerce market in some other European countries is also developing and growing. A report on the characteristics of German online shopping released by eBay pointed out that Germany is the country with the highest amount of online shopping in Europe, and the German people are very enthusiastic about online shopping. In 2013, more than 42 million German people loved online shopping, exceeding the total population of Germany. Half of the number, accounting for 74% of the total number of Internet users, has increased significantly compared with the past five years, with holiday consumption being the leading factor.
It is understood that EU law allows companies to establish subsidiaries in Luxembourg and collect VAT from customers according to Luxembourg’s low VAT rate. A large company like eBay would designate its Luxembourg office as a supplier to its EU customers, helping it compete with rivals. Search engine companies like Google earn billions of dollars in revenue from various European countries, but pay almost no business tax to governments. This situation is becoming increasingly intolerable to parliamentarians. Investigations into their tax avoidance behavior have also been launched.
