New on LowEndTalk? Please Register and read our Community Rules.
All new Registrations are manually reviewed and approved, so a short delay after registration may occur before your account becomes active.
All new Registrations are manually reviewed and approved, so a short delay after registration may occur before your account becomes active.
Comments
I doubt anyone will lower because that means down the road they have to raise it again, and no one likes raising prices.
Francisco
@Francisco a few added the 3% difference as credit to my account,netcup, iniz and some other
Yea is old news
Are you living in Germany @cold?
yes
Anyone remember when the UK raised VAT from 17.5% to 20% and the government said it would be good for business because it would make calculations easier?
Ok thats what I thought. Ich auch
A provider needs to use EU VAT MoSS System and charge on the invoice he VAT of the customer EU country.
(Unlike they are making 10.000 Euro/yr or bellow in Sales to other EU countries total)
Plus if provider is in EU and customer outside EU, customer doesn't pay VAT at all.
So it won't affect much users here. Only the Germans on LET
I also think too it will last longer however
hahahaha really
Easier for the government to get more money
If they don't lower (gross) prices during this temporary time period and you sign up for a new contract now (at a higher net price), you may have to pay more later just because you signed up during a period of lowered VAT if they pass through the VAT increase in January. Unfortunatelly this seems a welcomed practice for profit-greedy companies.
Wait, isn't VAT tax money that goes to the governments and not companies?
Correct. Let's do some math for illustration.
Let's say a company used to offer a service at 100 EUR. Including 19% VAT this resulted in a net price for the company of 84.03 EUR plus 15.97 EUR for the government.
Now German government decides to lower VAT to 16%. For whatever reason.
The company could now lower their end price incl. VAT from 100 EUR down to 97.47 EUR, saving the end customer incredible 2.5% for a few months.
However because 100 EUR looked so nice on the advertisements (better than 97.47 EUR) (or because they don't wont to modify billings) (or because the company wants to maximaze their profits) they simply keep selling the service at 100 EUR.
Let's say you as a private end customer now sign up for this service. So on paper you will sign up a new contract for a service that costs 86.21 EUR + VAT (currently 13.79 EUR) = 100 EUR.
Notice the company now earns 86.21 EUR instead of 84.03 EUR (before VAT).
Now in January the company will tell you that Germany increased VAT from 16% to 19%, hence your invoiced amount is now going to be 86.21 EUR + VAT (then 16.38 EUR) = 102.59 EUR.
So just because you signed up for the same contract during a period of temporarily reduced taxes, you end up paying 2.6% more.
Sorry for this wall of math. But this whole temporarily tax reduction is just...
Must of been a real nightmare when it was 15% for that ever so brief sweet moment.
I'm not sure how german companies wouldn't know this after 4 months.
You are explaining how tax works. I will say you've made it remarkably short, considering it's tax which you can escape only by death.