The real problem with the EU is whose in control.

[PBC_1966]

There is a vast difference between rates and system.

But the EU is already part way toward specifying common rates by saying that standard rate must be no less than 15% and the reduced rates no less than 5%. Those rules haven't been in place since the invention of VAT as a system. Do you really think that in time they won't be trying for further EU-wide standardization of the rates as well as the basic system?

It prevents states charging VAT on {.....}

And at the same time it forces them to charge VAT on everything which is not on the exempt list, the exceptions being those "special" cases like the U.K.'s zero-rate on food and some other items discussed above.

It's inherently sensible for VAT categories to be harmonised across all states.
It makes sound administrative and economic logic for goods and services to be in the same VAT categoies for all EU states.

Why?

Eire has a exempt rate for postal services whereas NI has a standard rate for postal services. All the local organisations cross the border to post their mail.

Assuming that the basic rate for whatever destination the mail is intended for doesn't negate any possible advantage. But that aside, so what? People who are conveniently near to various borders often cross those borders when they can buy something cheaper on the other side of that border.

We do have some cross-border shopping but it is not as daft as it would be if all states were free to choose their own categories.

What is wrong with cross-border shopping? Isn't that supposed to be what the "free market" is all about in the first place?

UK citizens would be travelling to France for tobacco and alcohol products, etc. .

Don't they do that already? And again, so what?

As I mentioned earlier, there are no common rates nor even any common system of sales tax in the United States, each state setting its own rules and rates, and that's all within one country. Why do think it needs to be the same across two dozen or more different countries?

Imagine the kind of chaos that would ensue if the categories of goods were different in different states.

But that is exactly what we have here in the U.S. and it doesn't result in chaos. As I also mentioned earlier, it's not even always the same rates from one town to another. I had to pick up a new garbage disposal for the kitchen this morning and bought it in Redding, being charged 7.5% sales tax on the purchase price. If I'd gone a few miles the other way into Anderson it would have been 8%. Obviously it wouldn't have been worth the time or the cost of gas, but if I'd cared to have driven 120 miles or so across the state line into Oregon, it would have been tax free. People who live near to state lines often make trips to adjacent states to save on certain things, just as people who are convenient to the tunnel or ferries in England might make a day-trip to Calais to stock up on certain things. What's the problem with that?

Goods being transported and exported from one state where VAT was standard to another state where VAT was exempt.
The administrative difficulties would be a nightmare.

Again, it's done every day here in America and that's all within a single country. So why does it need to be the same across two dozen European countries?

 

[EFLImpudence]

Are there any plans afoot to harmonize prices and wages when/if harmonized vat or other tax is the order of the day?

 

[Himaginn]

There is a vast difference between rates and system.

But the EU is already part way toward specifying common rates by saying that standard rate must be no less than 15% and the reduced rates no less than 5%. Those rules haven't been in place since the invention of VAT as a system. Do you really think that in time they won't be trying for further EU-wide standardization of the rates as well as the basic system?

It prevents states charging VAT on {.....}

And at the same time it forces them to charge VAT on everything which is not on the exempt list, the exceptions being those "special" cases like the U.K.'s zero-rate on food and some other items discussed above.

It's inherently sensible for VAT categories to be harmonised across all states.
It makes sound administrative and economic logic for goods and services to be in the same VAT categoies for all EU states.

Why?

Eire has a exempt rate for postal services whereas NI has a standard rate for postal services. All the local organisations cross the border to post their mail.

Assuming that the basic rate for whatever destination the mail is intended for doesn't negate any possible advantage. But that aside, so what? People who are conveniently near to various borders often cross those borders when they can buy something cheaper on the other side of that border.

We do have some cross-border shopping but it is not as daft as it would be if all states were free to choose their own categories.

What is wrong with cross-border shopping? Isn't that supposed to be what the "free market" is all about in the first place?

UK citizens would be travelling to France for tobacco and alcohol products, etc. .

Don't they do that already? And again, so what?

As I mentioned earlier, there are no common rates nor even any common system of sales tax in the United States, each state setting its own rules and rates, and that's all within one country. Why do think it needs to be the same across two dozen or more different countries?

Imagine the kind of chaos that would ensue if the categories of goods were different in different states.

But that is exactly what we have here in the U.S. and it doesn't result in chaos. As I also mentioned earlier, it's not even always the same rates from one town to another. I had to pick up a new garbage disposal for the kitchen this morning and bought it in Redding, being charged 7.5% sales tax on the purchase price. If I'd gone a few miles the other way into Anderson it would have been 8%. Obviously it wouldn't have been worth the time or the cost of gas, but if I'd cared to have driven 120 miles or so across the state line into Oregon, it would have been tax free. People who live near to state lines often make trips to adjacent states to save on certain things, just as people who are convenient to the tunnel or ferries in England might make a day-trip to Calais to stock up on certain things. What's the problem with that?

Goods being transported and exported from one state where VAT was standard to another state where VAT was exempt.
The administrative difficulties would be a nightmare.

Again, it's done every day here in America and that's all within a single country. So why does it need to be the same across two dozen European countries?

You're becoming desperate by focusing on increasingly minute details of VAT, comparisons of alternative systems in place in other countries, and invalid suggestions about what EU intends in the future.

I've been patient explaining your misinterpretation about most of your invalid claims so far, as I was about your obstinate refusal to accept that EU Parliament has Legislative Initiative powers. But my patience wears thin when you make such wild comments as "in time they won't be trying" or "Why?" or "so what" or "What's the problem with that" or "who's to say".
If you want to go into a theoretical discussion about the benefits, advantages and disadvantages of VAT compared to other systems, then please do so. Just don't expect me to answer your "if" questions.
Exercise your obstinacy with others, not with me.

 

[Himaginn]

Are there any plans afoot to harmonize prices and wages when/if harmonized vat or other tax is the order of the day?

VAT is an indirect tax system. Direct tax describes all other tax systems, such as Income Tax, CG tax, Business Tax, etc.

Harmonisation of these (VAT) is far more advanced than in the case of direct taxes, which are not mentioned in the treaties.
Tax matters have been included in the Treaties since the Union's beginnings. Nevertheless, they have remained closely linked to Member State sovereignty (along with police and military issues), protected by the unanimity requirement

http://www.europarl.europa.eu/RegData/etudes/IDAN/2015/549001/EPRS_IDA(2015)549001_EN.pdf

So any changes or harmonisation of any other tax requires a unanimous decision of EU member states, via a Treaty change.
One member e.g. UK can veto this treaty change, thus prevent any further harmonisation of tax systems. But UK can only do that if we're IN.
If we're OUT and we want to re-join at some later date, we'd be require to accept any Treaty changes completed in our absence.

 

[PBC_1966]

You're becoming desperate by focusing on increasingly minute details of VAT, comparisons of alternative systems in place in other countries, and invalid suggestions about what EU intends in the future.

It's simply a matter of track record when it comes to the EU pushing for more "harmonization" in the future. That's what's happened in so many other fields, so why should we believe it will be any different for VAT? As I pointed out already, those 5% & 15% minima weren't there when the U.K. joined the EEC; that's a later step toward bringing rates more into line between countries. So why should anyone believe they won't gradually narrow down the ranges until stipulating common rates for each country?

As for the comparisons I've made with American sales tax, why do you think that's not a valid comparison? Why will you not answer the simple question as to why you think the basic VAT system needs to be the same across more than two dozen countries when over here we have more than 50 different sales tax systems all within the same nation?

 

[PBC_1966]

One member e.g. UK can veto this treaty change, thus prevent any further harmonisation of tax systems. But UK can only do that if we're IN.

And if the U.K. is out, it doesn't matter what the others want to do with regard to adopting some common tax system.

If we're OUT and we want to re-join at some later date, we'd be require to accept any Treaty changes completed in our absence.

Any future U.K. government would be absolutely crazy to rejoin the EU after escaping from it, especially if that meant handing over even more power to Brussels than has been done thus far in the country's membership.

 

[Himaginn]

It's simply a matter of track record when it comes to the EU pushing for more "harmonization" in the future. That's what's happened in so many other fields, so why should we believe it will be any different for VAT?

That's just your prejudicial opinion and underhand attempt at scaremongering. There is no valid justification for it.
Moreover I've already shown you written evidence that shows it needs unanimous agreement to make changes.
Yet you still obstinately refuse to accede the point. Rather like you refused to accept that the EU Parliament has legislative initiative power.

As I pointed out already, those 5% & 15% minima weren't there when the U.K. joined the EEC; that's a later step toward bringing rates more into line between countries. So why should anyone believe they won't gradually narrow down the ranges until stipulating common rates for each country?

Because categories were set up in order to facilitate administrative and economic procedures you claim it's an attempt to force standards rates on member states?
How many more time do I have say it: CHANGES TO VAT LEGISLATION REQUIRES A UNANIMOUS DECISION.
That means that EU cannot force new VAT legislation on member states without the agreement of all member states, not the majority, not some of them, not a group of bureacrats, a UNANIMOUS AGREEMENT OF ALL MEMBERS!

As for the comparisons I've made with American sales tax, why do you think that's not a valid comparison? Why will you not answer the simple question as to why you think the basic VAT system needs to be the same across more than two dozen countries when over here we have more than 50 different sales tax systems all within the same nation?

A comparison with other countries system of raising revenue is outside of and irrelevant to this discussion.
This discussion is about being IN or OUT of EU, not whether another system of raising tax is better or worse.
Additionally:

Cross-border VAT is declared in the same way as domestic VAT, which facilitates the elimination of border controls between member states, saving costs and reducing delays. It also simplifies administrative work for freight forwarders. Previously, in spite of the customs union, the differing VAT rates and the separate VAT administration processes resulted in a high administrative and cost burden for cross-border trade.

https://en.wikipedia.org/wiki/European_Union_value_added_tax

 

[Himaginn]

One member e.g. UK can veto this treaty change, thus prevent any further harmonisation of tax systems. But UK can only do that if we're IN.

And if the U.K. is out, it doesn't matter what the others want to do with regard to adopting some common tax system.

What? It doesn't matter to whom?
It's not only UK that has the power of veto, all member states have the power of veto. That's what "Unanimous Agreement" means.
There are still some anomalies in the current EU VAT system which need sorting. For example your example of 0% goods in UK:

The zero rate is not featured in the EU Sixth Directive as it was intended that the minimum VAT rate throughout Europe would be 5%. (Except of course exempt items) However, zero-rating remains in some member states, most notably the UK and Ireland, as a legacy of pre-EU legislation. These member states have been granted a derogation to continue existing zero-rating......

Which explains your misinterpretation of Pierre Moscovici

Pierre Moscovici, the Economics Commissioner, said that Britain's "zero rate" for VAT on a number of items is "not the best idea" and suggested it will be looked at as part of a review by the European Commission.

So your prejudicial opinion of EU VAT harmonisation is an intentional misinterpretation and mischevous misrepresentation in an attempt to persuade readers to vote to leave EU.

If we're OUT and we want to re-join at some later date, we'd be require to accept any Treaty changes completed in our absence.

Any future U.K. government would be absolutely crazy to rejoin the EU after escaping from it, especially if that meant handing over even more power to Brussels than has been done thus far in the country's membership.

Any current UK government would be crazy to take us out of a system that has brought tremendous prosperity over the last 40 years. Especially when they consider taking us out of that system into the unknown.
If we regress back to the sick dog of Europe in the next decade, in the event of a Brexit, we may have few alternative choices.

 

[jockscott]

Himmy, I wonder ,,, Do you work for the government? Are you a top civil servant (you know the one, who's been told to deny the Out ministers access to any information regarding the EU that could damage the chances of the Stayers) ????

 

[Himaginn]

a top civil servant (you know the one, who's been told to deny the Out ministers access to any information regarding the EU that could damage the chances of the Stayers) ????

Another monstrous misrepresentation of the situation, although on this occasion fueled by the sad campaigners who want the civil service to break with time-honoured tradition and rules.
That practice is extremely simple and straightforward:

The Civil Service helps the government of the day develop and implement its policies as effectively as possible.

https://www.gov.uk/government/organisations/civil-service/about
The tradition and practice has always been about supporting the government of the day, not the opposition, not some fringe party, not some dissenters, but the government of the day.

We’re co-ordinated and managed by the Prime Minister, in his role as Minister for the Civil Service.

The civil service has not been prevented from providing information or data to Brexit campaigners. It has been instructed not to comply with requests for assistance in forming policy, speeches, arguments, advice, etc.

In a letter to Cabinet, Sir Jeremy wrote: "As set out in the Prime Minister’s letter it will not be appropriate or permissible for the Civil Service to support Ministers who oppose the Government’s official position by providing briefing or speech material on this matter.
Under the rules, civil servants will also not be able to give briefings to or write speeches for anti-EU ministers.
.

http://news.sky.com/story/1647151/brexit-ministers-get-civil-service-ban

Now that has been misinterpreted in many ways, and perpetuated by the people like you. But the text of the actual letter makes it very clear what they cannot do.

 

[EFLImpudence]

Yes, Minister.

 

[PBC_1966]

It's simply a matter of track record when it comes to the EU pushing for more "harmonization" in the future. That's what's happened in so many other fields, so why should we believe it will be any different for VAT?

That's just your prejudicial opinion and underhand attempt at scaremongering. There is no valid justification for it.

How much more evidence do you need than the years over which it's been happening in so many fields?

Ask yourself one very simple question: Is there any field which is an "EU competence" (in its own phrasing), in which the regulations are not now more restrictive than at any time in the past?

Moreover I've already shown you written evidence that shows it needs unanimous agreement to make changes.

For some things yes. But I think it's also become clear that the U.K. government rather lets itself be bullied into accepting certain things in order to win (often temporary) concessions in other areas. Of course, that's the fault of the British government for not just standing its ground, but it's still a problem.

Rather like you refused to accept that the EU Parliament has legislative initiative power.

Initiative to request that the European Commission submits new or amended legislation for its consideration. I'm still waiting for something which confirms that the Commission is then obliged to do so.

 

[PBC_1966]

A comparison with other countries system of raising revenue is outside of and irrelevant to this discussion.
This discussion is about being IN or OUT of EU, not whether another system of raising tax is better or worse.

It's very convenient to dismiss something as being "irrelevant to the discussion" in order to avoid answering the question. The specific point was not whether the systems used elsewhere might be considered to be better or worse than the basic VAT system, but related to your insistence that for "administrative and economic" reasons and in order to "avoid chaos" it's somehow necessary that items be in the same categories throughout the EU.

Why do you think that we can operate numerous sales-tax systems in the different states of the U.S. - all within one country - yet it's somehow necessary that the EU establishes an identical system across all of its member countries?

It seems like a perfectly reasonable - and relevant - comparison to me.

Cross-border VAT is declared in the same way as domestic VAT, which facilitates the elimination of border controls between member states, saving costs and reducing delays. It also simplifies administrative work for freight forwarders. Previously, in spite of the customs union, the differing VAT rates and the separate VAT administration processes resulted in a high administrative and cost burden for cross-border trade.

Now let's talk about how it's increased the administrative burden for businesses selling to other EU countries, since they now have to account for intra-EU sales. Why don't you mention the fact that this exercise in supposedly making intra-EU sales easier has actually - from the VAT accounting perspective - made it more burdensome for many businesses to sell to another EU country than to sell to somewhere outside the EU?

 

[Himaginn]

It's simply a matter of track record when it comes to the EU pushing for more "harmonization" in the future. That's what's happened in so many other fields, so why should we believe it will be any different for VAT?

That's just your prejudicial opinion and underhand attempt at scaremongering. There is no valid justification for it.

How much more evidence do you need than the years over which it's been happening in so many fields?

Ask yourself one very simple question: Is there any field which is an "EU competence" (in its own phrasing), in which the regulations are not now more restrictive than at any time in the past?

Oh, here we go, off down another avenue of your misinterpretation and misrepresentation.

Moreover I've already shown you written evidence that shows it needs unanimous agreement to make changes.

For some things yes. But I think it's also become clear that the U.K. government rather lets itself be bullied into accepting certain things in order to win (often temporary) concessions in other areas. Of course, that's the fault of the British government for not just standing its ground, but it's still a problem.

More prejudicial opinions of yours.
Wild accusations.

Rather like you refused to accept that the EU Parliament has legislative initiative power.

Initiative to request that the European Commission submits new or amended legislation for its consideration. I'm still waiting for something which confirms that the Commission is then obliged to do so.

Oh, for crying out loud!
Stop being so obtuse and sullenly obstinate. Your denial and refusal does not and will not change facts.

 

[Himaginn]

A comparison with other countries system of raising revenue is outside of and irrelevant to this discussion.
This discussion is about being IN or OUT of EU, not whether another system of raising tax is better or worse.

It's very convenient to dismiss something as being "irrelevant to the discussion" in order to avoid answering the question. The specific point was not whether the systems used elsewhere might be considered to be better or worse than the basic VAT system, but related to your insistence that for "administrative and economic" reasons and in order to "avoid chaos" it's somehow necessary that items be in the same categories throughout the EU.

Why do you think that we can operate numerous sales-tax systems in the different states of the U.S. - all within one country - yet it's somehow necessary that the EU establishes an identical system across all of its member countries?

It seems like a perfectly reasonable - and relevant - comparison to me.

Read the quote reproduced below!
Additionally, I don't care how US conducts their tax system. It's not relevant to this discussion.
If you think it's relevant then kindly go off and start a thread comparing US tax systems to EU tax systems.

Cross-border VAT is declared in the same way as domestic VAT, which facilitates the elimination of border controls between member states, saving costs and reducing delays. It also simplifies administrative work for freight forwarders. Previously, in spite of the customs union, the differing VAT rates and the separate VAT administration processes resulted in a high administrative and cost burden for cross-border trade.

Now let's talk about how it's increased the administrative burden for businesses selling to other EU countries, since they now have to account for intra-EU sales. Why don't you mention the fact that this exercise in supposedly making intra-EU sales easier has actually - from the VAT accounting perspective - made it more burdensome for many businesses to sell to another EU country than to sell to somewhere outside the EU?

Why don't you provide examples, and comparisons on the amount of administrative savings compared to any extra burden created?

Here we go, off down another increasingly minute inspection of VAT cases, only to find that they didn't really apply after all.