LaForge's home page (Posts about business)https://laforge.gnumonks.org/blog/tags/business.atom2022-06-21T07:49:57ZHarald WelteNikolaDHL zones and the rest of the worldhttps://laforge.gnumonks.org/blog/20161206-dhl_rest_of_world/2016-12-06T07:50:00+01:002016-12-06T07:50:00+01:00Harald Welte<p>I typically prefer to blog about technical topics, but the occasional
stupidity in every-day (business) life is simply too hard to resist.</p>
<p>Today I updated the shipping pricing / zones in the ERP system of my
company to predict shipping rates based on weight and destination of
the package.</p>
<p>Deutsche Post, the German Postal system is using their DHL brand for
postal packages. They divide the world into four zones:</p>
<ul class="simple">
<li><p>Zone 1 (EU)</p></li>
<li><p>Zone 2 (Europe outside EU)</p></li>
<li><p>Zone 3 (World)</p></li>
</ul>
<p>You would assume that "World" encompasses everything that's not part of
the other zones. So far so good. However, I then stumbled about <strong>Zone 4 (rest of
world)</strong>. See for yourself:</p>
<img alt="/images/dhl-rest_of_world.png" src="https://laforge.gnumonks.org/images/dhl-rest_of_world.png">
<p>So the <em>World</em> according to DHL is a very small group of countries
including Libya and Syria, while countries like Mexico are <strong>rest of
world</strong></p>
<p>Quite charming, I wonder which PR, communicatoins or marketing guru came
up with such a disqualifying name. Maybe they should hve called id 3rd
world and 4th world instead? Or even discworld?</p>Germany's excessive additional requirements for VAT-free intra-EU shipmentshttps://laforge.gnumonks.org/blog/20151103-gelangensbescheinigung/2015-11-03T00:00:00+01:002015-11-03T00:00:00+01:00Harald Welte<div class="section" id="background">
<h2>Background</h2>
<p>At my company <a class="reference external" href="http://sysmocom.de/">sysmocom</a> we are operating a small
<a class="reference external" href="http://shop.sysmocom.de/">web-shop</a> providing small tools and
accessories for people interested in mobile research. This includes
programmable SIM cards, SIM card protocol tracers, adapter cables,
duplexers for cellular systems, GPS disciplined clock units, and other
things we consider useful to people in and around the various <a class="reference external" href="http://osmocom.org/">Osmocom</a> projects.</p>
<p>We of course ship domestic, inside the EU and world-wide. And that's
where the trouble starts, at least since 2014.</p>
</div>
<div class="section" id="what-are-vat-free-intra-eu-shipments">
<h2>What are VAT-free intra-EU shipments?</h2>
<p>As many readers of this blog (at least the European ones) know, inside
the EU there is a system by which intra-EU sales between businesses in
EU member countries are performed without charging VAT.</p>
<p>This is the result of different countries having different amount of
VAT, and the fact that a business can always deduct the VAT it spends on
its purchases from the VAT it has to charge on its sales. In order to
avoid having to file VAT return statements in each of the countries of
your suppliers, the suppliers simply ship their goods without charging
VAT in the first place.</p>
<p>In order to have checks and balances, both the supplier and the
recipient have to file declarations to their tax authorities, indicating
the sales volume and the EU VAT ID of the respective business partners.</p>
<p>So far so good. This concept was reasonably simple to implement and
it makes the life easier for all involved businesses, so everyone
participates in this scheme.</p>
<p>Of course there always have been some obstacles, particularly here in
Germany. For example, you are legally required to confirm the
EU-VAT-ID of the buyer before issuing a VAT-free invoice. This
confirmation request can be done online</p>
<p>However, the Germany tax authorities invented something unbelievable: A
Web-API for confirmation of EU-VAT-IDs that has opening hours. Despite
this having rightfully been at the center of ridicule by the German
internet community for many years, it still remains in place. So there
are certain times of the day where you cannot verify EU-VAT-IDs, and
thus cannot sell products VAT-free ;)</p>
<p>But even with that one has gotten used to live.</p>
</div>
<div class="section" id="gelangensbescheinigung">
<h2>Gelangensbescheinigung</h2>
<p>Now in recent years (since January 1st, 2014) , the German authorities
came up with the concept of the <em>Gelangensbescheinigung</em>. To the German
reader, this newly invented word already sounds ugly enough. Literal
translation is difficult, as it sounds really clumsy. Think of
something like a <em>reaching-its-destination-certificate</em></p>
<p>So now it is no longer sufficient to simply verify the EU-VAT-ID of the
buyer, issue the invoice and ship the goods, but you also have to
produce such a <em>Gelangensbescheinigung</em> for each and every VAT-free
intra-EU shipment. This document needs to include</p>
<ul class="simple">
<li><p>the name and address of the recipient</p></li>
<li><p>the quantity and designation of the goods sold</p></li>
<li><p>the place and month when the goods were received</p></li>
<li><p>the date of when the document was signed</p></li>
<li><p>the signature of the recipient (not required in case of an e-mail
where the e-mail headers show that the messages was transmitted from
a server under control of the recipient)</p></li>
</ul>
<p>How can you produce such a statement? Well, in the ideal / legal /
formal case, you provide a form to your buyer, which he then signs and
certifies that he has received the goods in the destination country.</p>
<p>First of all, I find if offensive that I have to ask my customers to
make such declarations in the first place. And then even if I accept
this and go ahead with it, it is my legal responsibility to ensure that
he actually fills this in.</p>
<p>What if the customer doesn't want to fill it in or forgets about it?</p>
<p>Then I as the seller am liable to pay 19% VAT on the purchase he made,
despite me never having charged those 19%.</p>
<p>So not only do I have to generate such forms and send them with my
goods, but I also need a business process of checking for their return,
reminding the customers that their form has not yet been returned, and
in the end they can simply not return it and I loose money. Great.</p>
</div>
<div class="section" id="track-trace-courier-services">
<h2>Track+Trace / Courier Services</h2>
<p>Now there are some alternate ways in which a <em>Gelangensbescheinigung</em>
can be generated. For example by a track+trace protocol of the delivery
company. However, the requirements to this track+trace protocol are so
high, that at least when I checked in late 2013, the track and trace
protocol of UPS did not fulfill the requirements. For example, a
track+trace protocol usually doesn't show the quantity and designation
of goods. Why would it? UPS just moves a package from A to B, and
there is no customs involved that would require to know what's in the
package.</p>
</div>
<div class="section" id="postal-packages">
<h2>Postal Packages</h2>
<p>Now let's say you'd like to send your goods by postal service. For
low-priced non-urgent goods, that's actually what you generally want to
do, as everything else is simply way too expensive compared to the value
of the goods.</p>
<p>However, this is only permitted, if the postal service you use produces
you with a receipt of having accepted your package, containing the
following mandatory information:</p>
<ul class="simple">
<li><p>name and address of the entity issuing the receipt</p></li>
<li><p>name and address of the sender</p></li>
<li><p>name and address of the recipient</p></li>
<li><p>quantity and type of goods</p></li>
<li><p>date of having receive the goods</p></li>
</ul>
<p>Now I don't know how this works in other countries, but in Germany you
will not be able to get such a receipt form the postal office.</p>
<p>In fact I inquired several times with the legal department of Deutsche
Post, up to the point of sending a registered letter (by Deutsche Post)
to Deutsche Post. They have never responded to any of those letters!</p>
<p>So we have the German tax authorities claiming <em>yes, of course you can
still do intra-EU shipments to other countries by postal services, you
just need to provide a receipt</em>, but then at the same time they ask for
a receipt indicating details that no postal receipt would ever show.</p>
<p>Particularly a postal receipt would never confirm what kind of goods you
are sending. How would the postal service know? You hand them a
package, and they transfer it. It is - rightfully - none of their
business what its content may be. So how can you ask them to confirm
that certain goods were received for transport ?!?</p>
</div>
<div class="section" id="summary">
<h2>Summary</h2>
<p>So in summary:</p>
<p>Since January 1st, 2014, we now have German tax regulations in force
that make VAT free intra-EU shipments extremely difficult to impossible</p>
<ul class="simple">
<li><p>The type of receipt they require from postal services is not provided
by Deutsche Post, thereby making it impossible to use Deutsche Post
for VAT free intra-EU shipments</p></li>
<li><p>The type of track+trace protocol issued by UPS does not fulfill the
requirements, making it impossible to use them for VAT-free intra-EU
shipments</p></li>
<li><p>The only other option is to get an actual receipt from the customer.
If that customer doesn't want to provide this, the German seller is
liable to pay the 19% German VAT, despite never having charged that
to his customer</p></li>
</ul>
</div>
<div class="section" id="conclusion">
<h2>Conclusion</h2>
<p>To me, the conclusion of all of this can only be one:</p>
<p>German tax authorities do not want German sellers to sell VAT-free
goods to businesses in other EU countries. They are actively trying to
undermine the VAT principles of the EU. And nobody seem to complain
about it or even realize there is a problem.</p>
<p>What a brave new world we live in.</p>
</div>