Quote: Originally Posted by richc46
VAT coming to USA soon. Things are getting bad.
It's 19% here, called Umsatzsteuer or Mehrwertsteuer (Umsatz = turnover, Steuer = tax, Mehrwert = value added).
It's the most stupid and bureaucratic system in this world of ours! Let's say we pay a 20 buck commission to an agent selling our services. We need for instance 100 bucks net, so we have to give the customer a bill of 143 bucks (our 100 bucks + agent's 20 + 19% VAT).
But that 20 bucks is money that we never see, it goes directly to that agent. Still it is seen as our income, and we have to pay VAT from that. When the agent sends the bill to us to get that commission, they'll pay VAT from that, too.
So, the VAT from that commission was paid two times. No problem, we get it back because at the end, only the agent in this example has to pay VAT from that amount. But first we have to pay it, then ask IRS to give it back to us after they got it again from the agent.
Very simplified example but that's how it works here. Add to that the fact that Germans love stamps and official documents and complicated forms, rather in 4 copies each.