A recent EU report (https://static.rasset.ie/documents/news/onlineshopping.pdf) has highlighted that shoppers are still experiencing discrimination because of their nationality and country of residence. The report found that …
EU Shoppers still experience “Geo-Blocking”
A recent EU report (https://static.rasset.ie/documents/news/onlineshopping.pdf) has highlighted that shoppers are still experiencing discrimination because of their nationality and country of residence. The report found that a practice called ‘geo-blocking’ is still stopping EU shoppers from fairly accessing goods and services, especially when shopping online.
The issue relates to restrictions faced by consumers. Often consumers face higher prices based on their nationality or place of residence. For example, an Irish consumer may see an identical product listed on a retailer’s UK webstore (.co.uk) and their Republic of Ireland webstore (.ie). However there may be a significant price difference even taking in to account the Euro/Sterling currency exchange rate. Furthermore consumers may be faced with a refusal by the retailer to deliver to the country in which they are located.
The report showed that Austria sends the highest number of complaints in the EU regarding this issue – 138 in total. Italy was second (68 complaints) followed by Ireland in third place (66 complaints). Some of the excuses are arbitrary such as charging more for the use of an Irish/Austrian/Italian credit card. However there could be more to this. Retailers may be refusing to provide services as they do not want to become liable for VAT in another EU country. If a retailer surpasses the distance selling threshold set by another EU Member State they become liable for VAT in the country where the consumer is located.
The report said that ‘geo-blocking’ is illegal under EU consumer protection rules.
EC to simplify VAT rules for small businesses selling online
The European Commission has unveiled a series of measures to improve the VAT environment for e-commerce businesses in the EU. The changes would benefit all the start-ups and smaller businesses that had been pulled into the VAT MOSS on B2C e-services in 2015.
The EC proposes:
- New rules allowing companies that sell goods online to deal easily with all their EU VAT obligations in one place
- To simplify VAT rules for start-ups and micro-businesses selling online, VAT on cross-border sales under €10,000 will be handled domestically. SMEs will benefit from simpler procedures for cross-border sales of up to €100,000 to make life easier
- Action against VAT fraud from outside the EU, which can distort the market and create unfair competition
- To enable Member States to reduce VAT rates for e-publications such as e-books and online newspapers
Meridian Global Services (Ireland)