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Zephyr550
·Quite off-topic, but the rationale is simple: VAT is a tax on the whole value chain which is payed by the last member of the chain. There is a "trick" tough since, how do you "value" "value"? Simple answer is you directly map "value" to "price". If you bought something for X and sold it for X+delta, "delta" is the added value that you will pay taxes for. Note "delta" can be either a positive or a negative number. When you have to set your VAT declaration, you sum up all VAT that you collected from your sellings and detract all the VAT you had to pay to others from your buyings. If then it happens you collected VAT in excess, you return it to your government (since VAT is not payed to independent agents, but always to government: you merely collect it temporarily on its name).
That's the rationale. Now: does reality always map to rationale? I.e.: if you are not acting in a professional stanza you don't collect nor pay business-related taxes so no VAT should be involved while sometimes, i.e. trans-border operations, it might happen. It should be either petty money (one watch a year?), or the problem, if volume is high, may be a different one: maybe you are acting professionally in disguise and thus, comitting tax fraud.
I understand how taxes work really well... But my point is that the current system is missing common sense in this case.
If there is X+delta, only delta shall be taxed... but not by VAT (which is calculated from the final price = item price + shipping costs + customs), the right tax is income tax (under condition there are no other related costs). Nowadays, the world is globalized, and if there is no VAT on stocks for example, why on used watches? As I said before, there is no “value added”. There is no common sense fot that. If there is a cross-border transaction of a new item, VAT is applied just once - country of sales or country of consumption - not both. But when a used watch is concerned, VAT is paid twice. I am sorry for off-topic, we can discuss the issue via private messages.
Imagine this example: UK based private person buys a watch for retail (VAT is included, state got paid) for 100 EUR, after some time he sells it to continental Europe (i.e. Germany) for 100 EUR shipping included, but after Brexit, customs and VAT are applied... so the German guy pays something like 125 EUR (100+customs + VAT). Where is the value added? And again, after some time the Germany guy sells it back to the original owner or to US/Australia (not EU)... VAT is applied again and the state is paid again. We can continue like this, the watch can travel arround the world and VAT is paid everytime... stupid in my opinion. (If law says that, I respect that, but I still think it is wrong policy)
