New EU tax law puts thousands out of business


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We’re here to help you! A major revision to the VAT tax in the European Union tax has caused the shutdown of thousands of businesses because they cannot afford to meet the complex rules and bureaucracy required.

Designed to prevent large businesses locating themselves in VAT-competitive territories, it had the predictable effect of drowning small businesses under a sea of bureaucracy, forcing them to access the data required to prove the customer’s location, figure out which of more than 80 VAT rates to apply, and issue an invoice in the correct language, currency and layout. Unable to afford the costly software required to deal with the regulation, thousands of small business and sole traders have closed or abandoned their enterprises. Most of those who have continued to trade have either moved to third party platforms, losing up to 70 percent of their total revenue (not just non-domestic sales) in commission, or spent thousands on software.

“The human cost to these businesses is vast”, Clare Josa is co-founder of EU VAT Action commented for EU Observer. “The only reason the Digital Single Market is still functioning is because awareness levels are below 5 percent, so most businesses are continuing to trade under the former system. As awareness rises, the damage will soar.”

Read the whole article. The quote above only gives a small taste of the problem caused entirely by government bureaucrats and elected officials who seem divorced from reality. And though this is a European governmental disaster, it is instructive for Americans to learn about it. Like Obamacare, the new VAT tax rules were imposed with the best of intentions, but completely ignored the reality of meeting those intentions. The result is financial ruin for thousands of businesses and individuals.

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2 comments

  • ted

    I do not agree that Obamacare was imposed with the best of intentions. It was designed to create chaos and frustration so that the bureaucrats could later ‘fix’ it with a single payer system.

  • hondo

    Ted – same here.

    “government bureaucrats and elected officials who seem divorced from reality”

    Sorry. Not divorced – they just have their own sense of desired reality. EU socialists (as their Communist cousins) always have big problems with “small businesses”. To difficult to control and supervise. They would just as well like the neighborhood butcher shop (or anything else) to be gov’t run and staffed with gov’t employees.

    If it doesn’t work – so what! If people complain – ha ha ha – oh boy! Waiting for Madera to solve his country’s problems with mass arrests and disappearances.

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