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European Union laws on cross-border trade will hurt online sales and may cause legal chaos, UK business leaders have warned.
Some smaller firms, especially those relying on internet sales, may have to end non-UK business, the CBI said.
Under EU proposals, a UK company selling abroad may have to comply with the laws of all 27 member countries rather than just domestic rules.
BBC - EU laws 'will hit online trade' [news.bbc.co.uk]
The gist of it is that, under the proposals, if you sell outside your own member state you will have to learn about and follow the laws of each member state to which you sell.
[edited by: engine at 9:10 am (utc) on Jan. 22, 2007]
[edit reason] extended quote [/edit]
It's actually a very silly one; after years of 'harmonization', it's actually quite difficult to be legal in your country and illegal in another EU country - though people in new member states may have some challenges.
Also, you have EU 'rights' in other EU countries.
If you think about it, it's much more likely you'll have legal problems with countries OUTSIDE the eu, who may well have anti-eu import issues.
But journalists never let the facts get in the way of a good story ;)
[edited by: Quadrille at 9:40 am (utc) on Jan. 22, 2007]
If I do business within the EU with a non VAT registered company I need to register for taxes in his country once turnover exceeds some piddly amount. 10000 euro I think it was.
[edited by: SlyOldDog at 10:24 am (utc) on Jan. 22, 2007]
That is just baloney. Sorry. You obviously have not idea of what you are talking about.
I have a business in Poland and Polish law conflicts with EU law in my area. Not only that, but if I follow the EU law I will get a fine from the Polish tax office. I have to follow the Polish law because the EU countries have no right of recourse because Polish law supersedes EU law.
Now to the webmaster part:
"The gist of it is that, under the proposals, if you sell outside your own member state you will have to learn about and follow the laws of each member state to which you sell." -> Anybody heard about harmonization? Well, all member states laws would probably be harmonisized before such a law would be implemented... as too say the difference between each country's law would be minimal. However that poses another problem to online businesses on the short term.
This may address why you would still face a fine from the tax office:
Does it affect the way I charge VAT to EU countries?
No, taxation is specifically excluded from the Directive.
That is from the link posted about the directive (in a nutshell) - so taxation law would override the directive as taxation has been excluded.
To put it short European media is full of crap stories like this, of some reason the media finds it easier to write about "future might be problems". When the reality is that each memberstate only have gotten economic benefits from being part of the EU.
How true! The effect of the service directive is exactly what DTI writes (see link above). It will make inter-EU trade with services a lot easier than before. If any other interpretation is put on the table, such as the one described by BBC, then the European Council simply won't approve it, since each member state has veto power.
We have been selling services (B2C) through Internet to all 27 EU member states for years. The easy way to handle any possible customer dispute is to choose law in the published terms of trade. In our case, the law of our home country. Piece of cake, really.
If I do business within the EU with a non VAT registered company I need to register for taxes in his country once turnover exceeds some piddly amount
Surely you only have to register for local taxes if you have a local presence in the 'other' country, not just if you have customers there.
As far as taxes go yes. The countries are directed to have their VAT rates between 15-25% or something. On certain things EU law other than taxation EU law rules. Like sizes of cucumbers for example :)
The post by Crush above this states VAT rates of 15-25%. There are three VAT rates applicable just in the UK - 17.5% (the EU 'compliant' one), 5% (a reduced rate, mostly as an industry concession) and 0% - an actual rate of applied and accounted-for taxation - in order to meet the letter of the EU VAT requirements by having an actual tax but without having to actually tax those goods.
Such irregularities exist across the spectrum. With 27 different sets of national laws to accomodate I take issue with those above who suggest this issue isn't worthy of note.
Let us not forget:
Bananas must not be excessively curved (free from abnormal curvature).
The Sun, 4 March 1998, p6. from EU regulation 2257/94
Surely you only have to register for local taxes if you have a local presence in the 'other' country, not just if you have customers there.
No, that's not the case. If your yearly sales to private individuals into another EU Country exceed a certain amount you have to register in the other country and start collecting the VAT of this member state. However this concerns only the VAT and not other taxes.
Just looked it up: The lowest amount I could find was 27.000 EUR for Italy. Highest needed turnover I found was Germany with 100.000 EUR.
Wherever you trade in the world, YOU always have to consider the rules of the receiving country. It was that way, always will be that way.
The EU has not changed that EXCEPT where things have 'harmonsed' it's easier.
Trade with France and Germany is easier now than ever.
Trde with newer members (eg Poland) still has problems, but fewer since they joined the EU.
Try trading with non-EU Eastern European nations!
It's a non-story because the BBC picked up a press release and never bothered to ask a single question. Most news media ignore CBI self-promo scare stories. Did you think the CBI really care about small business?
Once you know the source of a story, you can usually work out the agenda. This one is NOT pro-small business, it's just an EU-bash.
Vincevincevince, that's a big load of rubbish. There is no such law, as you can see by going round any supermarket in Europe and observing that every flipping banana is indeed as curved as they've always been.
I find it rather suspicious that the original starter of this thread is also peddling this urban myth that is clearly untrue.
Relying on The Sun for balanced and accurate information about European law is like relying on Microsoft for balanced and accurate information about Linux. They're the newspaper that tried to organise that rather pathetic "Up yours Delors" rally where people were supposed to raise two fingers to the European Union, but no one bothered turning up to it.
After all if a trader in Norway orders Bananas in Portugal he needs to know what he gets for his money. The little shrinkled green class III fruits or the large yellow class I.
Sometimes things are a little tricky but without the EU I would loose 1/3 of my sales.
On the positive side - if customers will be able to sue a company at their location this could give another boost to cross border sales since it would remove an obstacle for many people to buy online from a shop in another EU country.
When I want plants or seeds from any other EU country, I order them, no problem.
Good old times.
If you are in Netherlands and want to bet online, the foreign online casino/bookmaker must have Dutch gambling licence, as ruled by Dutch Supreme Court (try "de Lotto vs Ladbrokes"). Of course foreign casino can't get the licence because Dutch betting operator De Lotto has monopoly on it.
Ladbrokes has been ordered to implement geolocation systems and other measures to insure that its Web site cannot be accessed by Dutch residents.
Welcome to EU.
[edited by: Moncao at 8:38 am (utc) on Jan. 27, 2007]
-What important here is that they follow idiocy of the superpower: The business of the host country has to take care that foreign nationals are excluded from using their services, because the legal business has no licence for the foreign country! Are you seriously going into even considering understanding for such reasoning?
Las Vegas casino's don't ask for Dutch approvement to allow gambling to Dutch citizens.
Foreign nationals still can legally use marijuana in NL, without approval of foreign governments.
US citizens aged 17 could legaly consume alcohol in Greece.
And so on.
Anything wrong with that?
If a country has a law there is due process for trying to change it in that country. If Holland has a problem and you disagree, go do something about it in Holland. If Holland is a member of the EU and has signed up to certain areas of law, for example free trade which covers gambling, you have another option at a higher level.
Suggest you read up on International law and conventions before you go spouting off. Didn't the US just block online casinos and arrest the managing director of one British online casino when he visited Texas under some archaic Texas law? Don't you think it appropriate that states have control over what their citizens do on the Internet in that country? You try and use an example of a Dutchman going to a casino in Las Vegas, but he is not going to Las Vegas, he is going to his his PC in his living room in Holland. What about child pornography? Should we all be allowed to buy it online because you can get it from street vendors in Thailand? How about some guns from the good old USA or maybe make a subscription to al-Qaeda from a site in Saudi? You making out Holland has done something wrong and the EU is to blame is the joke.
[edited by: jatar_k at 1:54 pm (utc) on Jan. 29, 2007]
[edited by: lorax at 6:11 pm (utc) on Feb. 2, 2007]
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What about child pornography? Should we all be allowed to buy it online because you can get it from street vendors in Thailand? How about some guns from the good old USA or maybe make a subscription to al-Qaeda from a site in Saudi?
Don't you think it is a business between you and your resident country? What YOU are allowed is your responsibility and not the gun seller legally selling guns in another country.
I am simply amazed I have to draw this to same people.
It is about very dangerous precendence of enforcing one country's laws outside their jurisdiction.
As mentioned in the original thread here there is a possibility that a business in one country will need consent of another one to do any business with another country citizens!
Didn't the US just block online casinos and arrest the managing director of one British online casino when he visited Texas under some archaic Texas law?
Right. And another two for "allowing companies to transfer money from U.S. customers to bank accounts overseas!" [webmasterworld.com]
However this is a slightly different issue. While (nonsense of) the charges against those men are related to this thread, the US jurisdiction to act on their soil is not disputable.
Don't you think it appropriate that states have control over what their citizens do on the Internet in that country?
Again, this is between you and your country, not between your country and a legal business abroad.
... but he is not going to Las Vegas, he is going to his his PC in his living room in Holland.
AHA! That's the key point.
This is the only valid question, not yet answered in international courts, afaik.
But the common sense says again that approprite parties are again YOU and your resident country.
Now we could speak about location of the servers, even nameservers and so on. But, provided that everything is located in a foreign location, we are coming back to the non-jurisdicton of one country's laws over another country's legal businesses operating abroad.
Otherwise, any similar snail-mail communication could be forbidden to foreign parties, to make the idiocy complete.
[edited by: jatar_k at 1:18 pm (utc) on Jan. 29, 2007]
The lies and dramas and scare stories thrown up by the British press and people in government is so typically sycophantic, usual thrown up as a smoke screen to cover some other hidden agenda.
In basic terms the business of the EU is to open borders, make trade easier and to have a fair playing field.. like ever massive under taking there are some anomalies which become all too easy to highlight to create a story...
As business people, get to know the truth of EU business rather than pandering to anti-EU nationalistic fervour based mostly on bigotry and ignorance..
And what about the other way around? Are you selling into their markets at a preferential rate? How about the EU affiliates here who sell stuff in the US and pay no taxes on that? If you do not like selling from within the EU, move your op offshore or leave Europe yourself maybe. If you want to find an opportunity (like with my earlier examples) you will. If you just want to moan and complain, that speaks more of your inability to find opportunity. I find so many people whinge about the EU in public yet enjoy all the benefits including increased trade and human rights under their breath it sickens me. God bless the EU.
I think it's already funny that we that live in Europe have to pay 21% or 25% more than a non-EU citizen, at Adwords for example, to compete at the same market.
It is quite normal, for the UK government to vote for an EU policy, then when it comes in, to blame Europe for the effects. Plus several UK newspapers repeatedly run fictionalised 'examples' of EU damage - some repeating the same discreditied story on a six-monthly basis (thank you, Daily Mail).
The topic for this thread is simply a non-story. For a start, every country in the world has the 'right' to lay controls on people selling to them; the way it's done varies, but most get involved one way or another.
In the EU for example, the Treaty of Rome (which founded the EU in the 1950s-ish), explicitly lays down that 'right' for EU trade; the new act changes nothing at all - just reminds sellers of their legal duties.