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EBay users hit by sales tax
siddiqui
06/06/03 at 19:38:17
The online auction house eBay has said it will start charging people selling goods on its site VAT following a new EU law. According to the new European directive, all internet firms trading in western Europe must now charge VAT on services and products sold from their sites, if the sellers live in a European country. The move means that seller fees will now include VAT, and eBay admitted the move to charge a sales tax could have an effect on its European business, until now one of the firm's fastest growing units. EBay said it would increase its fees in Britain and Germany to compensate for any loss of revenue from the new laws. "Now the EU is going to get its cut," said Michael van Swaaij, vice president of eBay Europe. But eBay is also using the changes to restructure its pricing policy for the site as a whole, sparking criticism from some users. Knocking sales? The new fees will begin on 1 July, with new charges for vendors living or registered within the EU. eBay said it would display the VAT as part of new gross fees to be displayed on the site. The charges apply to all so-called 'seller fees' when listing on an EU eBay site, including insertion fees, feature fees, final value fees and service subscription fees. We assume this will have some effect Michael van Swaaij, eBay Europe So, reservation fees on goods selling for more than £100 for example, will rise from £1.20 to a charge of 1.2.%; final value fees for vehicles will rise from £15 to £18. EBay said at the same time as implementing VAT, it would "restructure eBay's insertion, feature and final value fees..We will raise some fees, reduce others, while keeping some the same". Its 'featured fee' for appearing on the homepage is rising from £19.95 to £49.95 while a 'gallery featured' article will cost £15.95, against a previous £9.95. Business sellers can apply for a VAT exemption and will not be charged VAT on ebay fees. EBay will charge higher selling fees in Britain and Germany, its two largest markets, in a move which the group admitted could dent sales growth. "We cannot predict exactly what's going to happen with us raising prices in Germany and the UK. We assume this will have some effect," said Mr van Swaaij. Still compelling Analysts have predicted the move will lead to a slowdown in custom, at least initially. But they expect sales to pick up in the longer term. "Business fundamentals remain compelling and potential near-term impact from fee increases is already reflected in guidance and estimates," said Safa Rashtchy, an analyst with US Bancorp Piper Jaffray. Other internet groups are also likely to be hit by the new law. Media giant AOL Time Warner has already taken steps to pre-empt the charges, setting up a new business unit in Luxembourg - a European country with a more favourable VAT rate - for its internet group AOL Europe. Story from BBC NEWS: http://news.bbc.co.uk/go/pr/fr/-/2/hi/business/2968106.stm Published: 2003/06/06 16:53:54 GMT © BBC MMIII

Re: EBay users hit by sales tax
Al-Basha
06/16/03 at 03:46:15
[slm] I just hope they don't pass the Internet tax law here in the US.
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