Level online VAT playing field due tomorrow
New VAT laws governing non-EU companies trading over the internet come into force tomorrow, aimed at eliminating unfair tax advantages.
Link: VAT threat to dotcoms
But while Customs & Excise has said 80% of online trade from non-EU companies will comply with the new laws, it may be impossible to get thousands of smaller companies to comply.
Only around 22 non-EU companies have registered for VAT purposes in the UK which suggests that there are many others that either do not intend to register, or are unaware of the new legislation.
The aim of the legislation is to provide a level playing field for European companies that trade online. They have always been subject to VAT while non-EU competitors have escaped it allowing them to price products far lower.
More information on the VAT on e-commerce directive can be found here.