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I think you are confusing the threshold at which VAT must be collected, and my point, which is that the VAT is a tax on purchases, not earnings. VAT is collected by a vendor on behalf of the government for all sales, but has no relation to the vendor's earnings. It is a direct tax on the consumer based on the price of the good/service purchased by the consumer. Therefore, if Apple previously did not have to collect the tax for certain downloads, that benefit is received by the purchaser, not Apple. Said another way, VAT is a tax on consumers, not businesses. Consumers are the beneficiaries of this tax avoidance scheme, if we want to call it that, not Apple. At least, that is how I would characterize this situation.

That makes sense, and I see what you mean as we are benefiting from lower prices I guess. However, that doesn't mean Apple aren't benefiting too - of course they are! Otherwise they wouldn't go through all the effort to find these loopholes and take advantage of them. If Apple had their prices set higher, then they wouldn't be selling as much content as they are.
 
I think i am split over-this decision:
on one side, i feel that tax avoidance by companies like apple, amazon and starbucks is diabolical

If politicians wanted to end the ability for companies to avoid taxes... they would change the laws. Obviously the politicians are just fine with things as they are.

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I'd imagine this is a good thing, as Europeans are in favor of higher taxes for the common good.

Ask 100 people what the definition of what they believe 'common good' happens to be and you're likely to get 100 different answers.
 
Definitely do it. Logic Pro X is amazing!

I was under the impression that for all the improvements, they've dropped logicnode, making it nowhere near as powerful as the previous version if you want to use additional systems for software synths. You could always rewire them from Reaper into Logic X and use Reamote to achieve the same thing but that's nowhere near as convenient as simply running logic node on a networked Mac as previous.
 
Everything unnecessarily contributes to a complicated tax system. Then you get the politicians involved, and it all goes to hell. The state I live in is trying to add 10 cents to the gasoline tax. We already pay 23 cents per gallon and have tolling facilities on the interstate and a state highway. They also want to put tolling on a proposed bypass highway.
I wish our gas tax was only 23cents we pay 46.4cents, but I guess we have hardly any toll roads in Ohio to make that diffrence.
 
I work in the insurance industry. In my experience, I would actually expect an health insurance company to pay more often when not strictly required than the opposite. Health insurance is a field requiring a lot of tact: refusing to pay a claim unless blatantly not due would be a huge reputation damage which in a competitive market means losing a lot of customers very quickly.

All the insurance companies I know tend to pay claims very liberally and try to reduce costs incentivizing healthy lifestyle, frequent health checks (which the insurance subsidizes recouping the money in finding problems sooner when the cure costs typically a lot less) and disincentivizing bad habits.

This was a joke, right? Maybe a commercial?

Lies.
 
Apple should simply ****ing absorb the VAT. It's not as if they did not already profit enough from those tax leaks and make quite some money anyway.

You wanna make money in a certain country? Pay this country's taxes.
Just ridiculous to pay taxes in Luxembourg or Ireland but sell goods and services in a completely different country?

Sales tax is always up to the consumer to pay. You shoud really be protesting the extortion-like VAT system. Talk about ridicuous.
 
I've heard this but trying to reclaim VAT on app purchases seems like a bit if a waste if time to me as reclaiming cross border VAT isn't straightforward. You can't just stick it on your UK VAT return as you haven't been charged UK VAT. I wonder how many people who pester Apple for a VAT receipt even realise they aren't being charged UK VAT and as such their attempts to reclaim the VAT will likely be fruitless?

Normally, a B2B sale of software would be subject to the reverse charge, meaning the seller would zero rate the supply and the buyer would account for the VAT as both the supplier and buyer on their VAT return, meaning there would be no VAT to reclaim overall.

However, Apple are quite clear in their terms and conditions that all sales are non commercial and therefore they treat all sales as B2C meaning they aren't obliged to reverse charge the sale.

I'm not sure pointing to HMRC guidance on issuing VAT invoices is really relevant to a Lux. registered trader either.



The thing is, as far as I know, Apple's refusal to offer zero VAT invoices (Intra-Community acquisition) is illegal. That's the problem.
What their terms of use state is irrelevant. If you want a zero VAT invoice, as a company, the seller is obliged to give you one (or refuse sale). In other words you should be able, as a business, to buy a €0,99 app for €0,86 (= excl the 15% Lux. VAT).

This is a serious issue for more expensive applications like Final Cut and Aperture that are only sold through the app store (and used by professionals who can claim a VAT deduction).

I tried getting a zero VAT invoice from Apple once. I just gave up. I reported them to the EU and the Belgian ministry of Finance. Nothing will come of that but it's the idea that counts.

I can imagine that Apple is an insanely frustrating company to deal with, even for governments. They bend rules or plain ignore them.
This week Apple, in Belgium, finally gave in to the 2 year warranty law. They were still supplying their goods with a 1 year factory warranty instead of the legally required 2 year.

Another example; Apple has a few partner networks for the iPhone. They block LTE on non-partner networks. Stating, blatantly lied, "technical reasons". Result: the government is now working on a law to unblock LTE on iPhones for every network. If the device is technically able to connect, it should connect, without any artificial restrictions.
 
The thing is, as far as I know, Apple's refusal to offer zero VAT invoices (Intra-Community acquisition) is illegal. That's the problem.
What their terms of use state is irrelevant. If you want a zero VAT invoice, as a company, the seller is obliged to give you one (or refuse sale). In other words you should be able, as a business, to buy a €0,99 app for €0,86 (= excl the 15% Lux. VAT).

I think you'll find thats simply not true. The terms of sale are crucial. If the terms of sale state that the sale is for private use and not for business use, then the criteria for reverse charging the VAT have not been met, regardless of whether the end user is a VAT registered business or not (businesses can buy things for non-business purposes too).

I quote from HMRC notice 741a:

For place of supply of services purposes ‘B2C supplies’ means supplies to:

a private individual
a charity, government department or other body which has no business activities, or
a ‘person’ who receives a supply of services wholly for private purposes.

Also:

If the services you are supplying to your customer are being used for a wholly private purpose, it is not a B2B supply. Instead you will need to decide whether the B2C general rule or one of the other place of supply rules applies.

Additionally, if your business is a limited company, then there is no way for Apple to make a direct B2B supply with your company as iTunes accounts are for individuals, not corporations.

So in short, Apple are satisfied that their transactions are not B2B supplies because a) iTunes accounts belong to individuals, not businesses and b) their terms of sale explicitly state that the supplies are not received for business purposes.

From the terms:

You shall be authorised to use iTunes Products only for personal, noncommercial use.

I realise this is at odds with the principle of selling software that is specifically aimed at commercial usage, but there you go.

So on the plus side, the new rules from January 2015 will mean that Apple will be charging UK (or Belgian in your case) VAT on their "B2C" supplies. This means, if you're legitimately buying something from Apple for business purposes and you can get a VAT invoice from them, then you should be able to reclaim the VAT.

Belgian rules might be slightly different to the UK but in the UK the invoice normally needs to be in the name of the VAT registered entity. This will still mean if your operating as a UK limited company that you won't be able to reclaim the VAT as the invoice will not be in the company name.
 
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I think you'll find thats simply not true. The terms of sale are crucial. If the terms of sale state that the sale is for private use and not for business use, then the criteria for reverse charging the VAT have not been met, regardless of whether the end user is a VAT registered business or not (businesses can buy things for non-business purposes too).

Additionally, if your business is a limited company, then there is no way for Apple to make a direct B2B supply with your company as iTunes accounts are for individuals, not corporations.

Then how would business users be able to buy programs aimed at professionals such as Final Cut Pro, Logic Pro and Aperture if they are only available from the Mac App Store?

Probably why they have the Volume Purchase Programme (VPP) for Business. ;)
 
If you have no VAT people with no income (i.e. living off savings) pay no tax nor do any tourists / business visitors. Almost all countries have a sales tax (or VAT) including the US where it varies by state. In Singapore the sales tax is at a higher rate than many people pay income tax at. VAT is not levied on essentials like food or rent and in the UK now the first £10k of earnings is free of income tax - moral enough ?

How did they get those savings? If they earned them they'll have paid income tax, if they inherited them they should pay a huge inheritance tax (I'm against inheritance). I agree that a high threshold before you start paying income tax is good, not sure what that has to do with VAT.

VAT is actually a superior tax system to income tax. It treats everyone equally and makes the tax code incredibly simple.

that's actually what I prefer about income tax - it shouldn't treat everyone equally, the rich should pay a high proportion.
 
The thing is, as far as I know, Apple's refusal to offer zero VAT invoices (Intra-Community acquisition) is illegal. That's the problem.
What their terms of use state is irrelevant. If you want a zero VAT invoice, as a company, the seller is obliged to give you one (or refuse sale). In other words you should be able, as a business, to buy a €0,99 app for €0,86 (= excl the 15% Lux. VAT).

This is a serious issue for more expensive applications like Final Cut and Aperture that are only sold through the app store (and used by professionals who can claim a VAT deduction).

I tried getting a zero VAT invoice from Apple once. I just gave up. I reported them to the EU and the Belgian ministry of Finance. Nothing will come of that but it's the idea that counts.

I can imagine that Apple is an insanely frustrating company to deal with, even for governments. They bend rules or plain ignore them.
This week Apple, in Belgium, finally gave in to the 2 year warranty law. They were still supplying their goods with a 1 year factory warranty instead of the legally required 2 year.

Another example; Apple has a few partner networks for the iPhone. They block LTE on non-partner networks. Stating, blatantly lied, "technical reasons". Result: the government is now working on a law to unblock LTE on iPhones for every network. If the device is technically able to connect, it should connect, without any artificial restrictions.

They should be getting publically fined large amounts for ignoring laws. End of, it's the ONLY way to make them change, trouble is some governments wouldn't dare do that.
 
This was a joke, right? Maybe a commercial?

Lies.
Why a joke? And a commercial to what? For which reasons should I have lied? I cannot speak for your specific situation: if in your situation insurance companies can and do screw their customers it's most likely because there is not enough competition and they don't care about their reputation. If this is the case you have a more fundamental problem: not enough competition tends to lead to bad consumer experience in basically all industries.
 
The UK is a piece of **** country.

Cannot wait to be out of this hellhole.
Be good to your word and move on then. Ensuring VAT is collected on online purchases is a sensible and necessary move.
 
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When revenue drops from outside the US then the US prices will eventually increase to cover the shortfall. I live in the UK so I am sorry for making your prices increase.

Apple knows that they're playing with fire if they increase their prices which many in the US consider too expensive as it is. Wireless carriers are starting to lower their plans (thanks T-Mobile) and other US companies have become more aware of price-sensitive consumers here. Subsidies may even disappear which means Apple would have to list those outrageous unlocked prices instead of those more appealing subsidized prices during their big iPhone announcements. Maybe that would be an incentive to lower their prices by 100-200 dollars.
 
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Wait, did I read this right?

There is zero difference between the two from a legal or accounting perspective. If you have some philosophy that argues your assumption, love to hear it.

I do not HAVE to exploit a loophole to not pay more than I am legally required to pay. I can legally pay all that I am required to pay and not have exploited a single tax loophole in the process.
 
If Apple had their prices set higher, then they wouldn't be selling as much content as they are.
Yes, that's true. It's the same argument for sales taxes on internet sales in the U.S., that it's unfair to local businesses that are collecting the tax on equivalent sales. U.K. has decided to impose tax increase to level playing field. In the U.S., we're not there yet (hard for politicians to agree to tax increase, even if it is to make the system "fairer")
 
Consumers pay VAT not corporations Small minds do not understand

If corporations had to absorb all sales taxes, socialist countries with high sales taxes would be advantaged compared to the more capitalist ones.

If this was the case, why would any country not turn super-socialist and make every public service free and put 50% sales taxes on everything? It's corporations, not citizens, that would end up paying for that 50% anyway. Where do we set the bar? Apple and the likes would end up paying for your healthcare and infrastructures while it wouldn't in non-socialist countries. How is that fair?

In the end, you'd want corporations to be paying for basically all of your government's expenses, except that in reality it wouldn't be sustainable for them to do so, so they'd just stop making business in your country.

And I say that as a Canadian who pays an extra 15% sales tax on top of every product that's already more expensive than in the states. Your proposition just seems incredibly naive and selfish. I'm by no mean knowledgable about economics or politics but this kind of post (and its number of upvotes) is so cringeworthy it makes me feel better about the little understanding I have.

That's why if you read my comment properly, you will see I stated Apple were not the only ones, Google and Amazon are also included.
They are changing the laws because the scandal was brought to light in the media, and the public rightly demanded action.

These companies DO trade in the UK, they employ people in the UK, they should pay UK tax.

Look at these:

http://www.bbc.co.uk/news/magazine-20560359
http://www.bbc.co.uk/news/business-22549434
http://www.theguardian.com/technology/2012/apr/04/amazon-british-operation-corporation-tax

It's been going on for years. They won't stop at this and will hopefully make all the American giants pay their full corporate tax.

You are a fool corporations are not going to pay this tax you the consumer will.
 
The UK is a piece of **** country.

Cannot wait to be out of this hellhole.

Don't let the door hit your behind on the way out will you ;)

You are a fool corporations are not going to pay this tax you the consumer will.

No, the corporations will pay it, my links refer to corporation tax avoidance, NOT VAT avoidance.
They have mostly managed to dodge paying almost any tax at all. Thankfully not for much longer.
 
There is an old saying: "Don't steal, the government hates competition."

In this case, the government is providing nothing new of value since bandwidth is already paid for and that cost is already taxed.
 
If a company buys 100 pieces of lead, and then turns them into 100 pencils, it pays VAT on the cost of the 100 pieces of lead, put offsets it against the sale price of the 100 pencils.

Set up a an IT company? Buy a load of computers? In the UK, you can reclaim the VAT on them. If your company is successful, great: You pay the VAT. If your company is a failure, then the government foots the VAT bill.

That's the difference between sales tax and VAT.

Sadly, there are all sorts of circumstances in which HMRC will not allow a person or company register for VAT. It would save me a lot of money if I could. On the other hand, it saves me a lot of paperwork.:)
 
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