The VAT thus motivates businesses to spend money on goods and services. What is it used for? "VAT essentially compensates for the shared service and infrastructure provided in a certain locality by a state and funded by its taxpayers that were used in the provision of that product or service." https://en.wikipedia.org/wiki/Value-added_tax
New Laws.
Is more expensive because everybody is paying a 21% more in taxes. So either the customer pays more, or the seller accepts to take a cut in their benefits to keep the price in a strategic value (below the product of his competitors)
To compensate it and survive, the startup needs now to find a way to produce the 'same' product 21% cheaper. For example, in China.
That invariably leads to your product being cloned for somebody and fake products invading your market.
Your customers, of course, hate it. Will hate YOU for that.
And will try to press you to forget VAT all the time. This system introduces a incredible amount of anger and friction in the process of selling a product, that must to be as straightforward and easy as possible. And is a bless to the bigco competitors.
That leads us to the parallel VAT-less market that will be created in no time.
Well, you raise an invoice with VAT on it, you get paid, you put the VAT money on the side because it is NOT YOUR money and you pay the VAT to the financial system. Your invoice goes into accounting only when it's paid. Can you explain what's wrong with that?
> Your customers, of course, hate it. Will hate YOU for that.
160 countries around the world have VAT / GST. Haven't seen widespread "HATE" anywhere.
