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January 2nd, 2014, 04:56
When I hear how complicated this is in the US, I actually prefer our system. It's a PITA, but in the end it's almost neutral for businesses, and end customers only have to pay once per transaction and can safely ignore the issue.
a) Every business pays VAT (actually there are at least 3 different terms for that in Germany, depending on who has to bill whom) to its suppliers and receives VAT from the parties after it in the chain. The difference has to be predicted and paid in advance (!) once a month. Corrections influence the next advance payments. So it's reasonably fair for ongoing businesses. It's just annoying because the tax authorities persue VAT issues very agressively. 1 day delay -> immediate trouble. The Spice must flow!
b) End cutomers pay VAT on everything to the business on their invoice.
c) All announced prices for end customers must already include VAT. Prices in B2B are without VAT because it's irrelevant for them.
edit: 19% on almost everything in Germany, 7% on food and a few other essentials.
Join Date: Aug 2006
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