November 28th, 2014


So does the VATMOSS craziness mean that while I'm on one of my occasional tax-avoidance day-trips to buy cigarettes and wine in Belgium and France respectively, I can also pop over the border into Luxembourg, connect to a local wireless data network, and stock up on ebooks at 3% VAT instead of 20%? Even while still using my UK credit card and PayPal account? If not then why not -- it will be my right to pay the Luxembourg rate of VAT when buying ebooks in Luxembourg, and will be the retailer's duty to charge me that rate and no more. But if so then what's to stop me from getting an account with a Luxembourgeois VPN provider and doing the same without bothering to go to the effort of actually visiting Luxembourg?

It's high time that we had global agreement that electronic sales work like physical sales, with the regulations and tax rates of the country where the retailer is based applying to the sale, and with territorial rights based only on the retailer's location. Because in fact it's impossible to know where the customer is physically located at the time of the sale. Yes, this gives lots of oppurtunities for tax avoidance, which suggests that perhaps we should just give up trying to levy sales taxes on electronically delivered goods altogether, and replace them with taxes on things that can be unambiguously located geographically.