Will consumers be affected by the 2015 VAT changes

The European Commission believes that the effect of the 2015 VAT changes on consumers will be minimal.Businesses that supply broadcasting, telecommunications and electronic services have a decision to make when the new rules comes into force on January 1, 2015.

What price will these businesses charge post-2015?

There are two options: dynamic or universal pricing. Dynamic pricing will take into account the varying VAT rates of the 28 EU member states and price accordingly. If an eMerchant decides to implement dynamic pricing then there prices will vary from country to country. If the consumer is based in a country with a higher VAT rate then they may be charged more for the service than before.

With universal pricing the eMerchant charges the same amount for their service across the board, This may also mean that the consumer will pay more but it could also result in lower prices. It all depends on where the end consumer is located.

Prices pre-2014 are based on where the supplier is located, post-January 2015 prices are based on where they consumer is located, The difference in the VAT regimes of the suppliers location and the consumer’s location will more than likely be the price differential. Read More...