My latest Guardian column, Can anything curb the dominance of the internet’s big guns? points out that everything governments do to tame the online giants has no effect on them — but makes it nearly impossible for new companies to compete with them.
There’s no better example of this than the VATMOSS VAT mess. Amazon, Google, Apple and other e-commerce giants claimed to be headquartered in Luxembourg in order to avoid VAT. This made everything they sold 20% cheaper than the products offered by high-street companies and small startups that couldn’t afford a presence in Luxembourg, which is quite a commercial advantage.
To solve this, the EU passed a regulation saying that anyone who sold goods in the EU would have to figure out who they were selling to, collecting two pieces of non-contradictory information about each purchases and retaining them for 10 years (meaning that every small and medium-sized enterprise [SME] has suddenly become a long-lived reservoir of indifferently secured Europeans’ sensitive financial information), and charge the local rate of VAT on those goods. There’s no minimum amount: if you sell a single 50p item in Bulgaria and collect 1p in VAT, you have to prepare and file a return so that Bulgaria gets its penny.
Amazon, Apple and the other tech giants were at the table when this was negotiated. It’s a pain in the ass for them, but not unbearable. They have whole buildings full of programmers and accountants who will simply update their tax filings to make sense of it.
For SMEs and sole traders, it’s been a disaster. I have a small business selling my own audiobooks through my website. This first VATMOSS quarter, I collected GBP18.76 in VAT from five EU nations. I spent over GBP700 in custom software, accountancy fees, and a new, specialist e-commerce fulfilment service in order to collect and remit this GBP18.76. Everyone I know who sells ebooks or digital audiobooks is in the same position.
Can anything curb the dominance of the internet’s big guns? [The Guardian]
(Image: Giant, Greg, CC-BY)