SuinBruin
New in Town
- Messages
- 22
- Location
- United States
This has been a hot topic on the VLJ over the last few days and I thought the folks here deserved to be clued into the situation.
Both Eastman and Aero's listed prices on their web sites include 20% UK VAT ("value added tax," the European equivalent of a sales tax). Unlike pricing in the US, it is standard in Europe to include VAT in the listed price.
The kicker is that VAT is not payable on sales outside the EU. In the words of Her Majesty's Government:
"VAT is a tax charged on goods used in the EU, so if goods are exported outside the EU, VAT isn't charged. You can zero-rate the sale, provided you get and keep evidence of the export, and comply with all other laws. You must also make sure the goods are exported, and you must get the evidence, within three months from the time of sale."
http://www.hmrc.gov.uk/vat/managing/international/exports/goods.htm#6
Thus, out-of-EU sales from Eastman and Aero should be eligible for a discount of about 17% of the list price (divide the price by 1.2 to back out the VAT component). But neither Eastman nor Aero disclose this on their web sites, and neither will apparently agree to back out the VAT on overseas sales. Thus, both companies are realizing a 20% bonus profit on all non-EU sales. Since they are not charging VAT on these sales, the portion that would otherwise go to pay VAT instead goes into their pockets.
I've bought a number of items from the UK and had the VAT taken out. This doesn't cost the seller a dime since the VAT is a tax, not part of the retail price. In other words, Eastman and Aero could back out the VAT on overseas sales and make just as much profit as they do on sales in the UK and EU. But they would apparently rather keep this windfall from overseas buyers, even when directly asked to discount the VAT amount.
Disclosure: I don't own anything from Eastman but was considering buying one of their sweaters until this issue was raised. I do own an Aero jacket and think very highly of it (it was purchased through eBay via Mark Moye several years ago). I have studied in the UK and bought a number of products from the country, and I consider myself pro-British. This isn't meant to slight our friends across the pond but only to highlight what I consider an unethical business practice.
Both Eastman and Aero's listed prices on their web sites include 20% UK VAT ("value added tax," the European equivalent of a sales tax). Unlike pricing in the US, it is standard in Europe to include VAT in the listed price.
The kicker is that VAT is not payable on sales outside the EU. In the words of Her Majesty's Government:
"VAT is a tax charged on goods used in the EU, so if goods are exported outside the EU, VAT isn't charged. You can zero-rate the sale, provided you get and keep evidence of the export, and comply with all other laws. You must also make sure the goods are exported, and you must get the evidence, within three months from the time of sale."
http://www.hmrc.gov.uk/vat/managing/international/exports/goods.htm#6
Thus, out-of-EU sales from Eastman and Aero should be eligible for a discount of about 17% of the list price (divide the price by 1.2 to back out the VAT component). But neither Eastman nor Aero disclose this on their web sites, and neither will apparently agree to back out the VAT on overseas sales. Thus, both companies are realizing a 20% bonus profit on all non-EU sales. Since they are not charging VAT on these sales, the portion that would otherwise go to pay VAT instead goes into their pockets.
I've bought a number of items from the UK and had the VAT taken out. This doesn't cost the seller a dime since the VAT is a tax, not part of the retail price. In other words, Eastman and Aero could back out the VAT on overseas sales and make just as much profit as they do on sales in the UK and EU. But they would apparently rather keep this windfall from overseas buyers, even when directly asked to discount the VAT amount.
Disclosure: I don't own anything from Eastman but was considering buying one of their sweaters until this issue was raised. I do own an Aero jacket and think very highly of it (it was purchased through eBay via Mark Moye several years ago). I have studied in the UK and bought a number of products from the country, and I consider myself pro-British. This isn't meant to slight our friends across the pond but only to highlight what I consider an unethical business practice.
