Ahhh ... Vats What It Is!

[PatientType]

Several times I've marveled at how fountain pen pricing seems to be so much higher when members in Europe offer pens for sale.

I've seen used fountain pens that I could purchase in the US for $250 offered at more than $300. What I'd not realized is the huge difference that VAT makes. The Value Added Tax is imposed in Europe, China, & India. It is supposed to be their version of the sales taxes imposed in the United States.

There appear to be two major differences between our sales tax and VAT taxes:
1) VAT taxes are incrementally collected for every value-added transaction. So, if I buy wood, a VAT would be paid on the value of the wood. If I make the wood into furniture and sell it to a retail outlet, a VAT would be paid on the difference betweent he value of the wood and what I sold the furniture for. Then, if the retail store sells the furniture, they charge a VAT on the difference between what they bought the furniture for and what the consumer paid to buy it.

2) VAT taxes are really high. Sales tax in the US ranges from zero in Montana, Delaware, Oregon & New Hampshire to 9.75% in Oakland, Los Angeles & Long Beach California. Also, Internet purchases often do not incur the tax or rely on citizens to voluntarily report such taxes (resulting in a compliance rate of less than 1%). A Wikilinks article lists the following VAT fees by country:
Germany 19%
Hungary 27%
Spain 21%
UK 20%
Sweden 25%
Greece 24%
Finland 23%
France 19.6%

 

Bottom line... If you're buying a fountain pen from someone is Sweden, they paid more than 25% more for the pen than you might have had you bought it new. As a result, they're likely to expect to receive more for their used pen than you might.

I've known there were such things as VATs but not the specifics. I thought others might find this as interesting as I did.

[watch_art]

Very interesting - and EXPENSIVE. Yikes.

[rochester21]

From what i know, VAT is charged for the final product, at the time of purchase. They don`t charge VAT for the individual materials that go into the final product. Maybe this detail varies from country to country.

Another thing: VAT is not always the same for every product/class of products. For basic food products(like bread and milk), the VAT is generally lower that for electronics, etc.

 

Also, if say a japanese pen is imported in the EU, the firm has to pay some fees, but i don`t know much about this issue. Of course, import fees are common to all countries, but the figures probably vary a lot.

 

And VAT is not expensive- it actually depends on what the government does with the money. I went through faculty and master program without paying a dime, because the government supports some of the costs(for deserving students such as myself ). In Romania, the VAT was 19%, but they increased it to 24% because of the hard times.

Edited September 14, 2013 by rochester21

[thesunshine]

Also I think it's worth noting that if you're not an EU citizen, you shouldn't be paying the taxes. I have no idea how it works for online purchases, but when I was last in England, I claimed back VAT from all of my purchases as I was leaving the country from Heathrow.

[Strand]

VAT is a government tax that the merchant is collecting from the customer on behalf of the contries tax department. VAT is not accumulating over different steps in the merchant chains as it is Always deductable for the companies in each step as long as they are buying from VAT registered companies in turn.

 

If you are in the US and buy a new pen from a European Company you should not have to pay VAT as long as the Company is VAT registered. The situation might be different (depending on country and choices made by the retailer) when buying a used or vintage pen from a VAT registered company. VAT may not Always be dedutable. (Caveat Emptor)

 

If you buy a pen from a private seller they cannot deduct VAT and hence there is no VAT reduction mechanism in place.

 

Note that some companies with worldwide presence actually are deploying different levels of RRP pricing depending on continent (typically most expensive in Europe). To make matters worse distributors in different countries can have different pricing policies - I have seen variation of up to 40% differene in rrp between european countries.

[Left FPN]

OK lets set up an example of a pen purchase.

 

Here in the UK I can buy, from an online UK store, a brand new boxed Waterman Carene in Marine Amber for £115 ($175) with free delivery.

 

What would you guys have to pay in the USA or anywhere else buying within your own country not importing.

Edited September 16, 2013 by Force

[PatientType]

Best price I could come up with using American-based dealers on line for a Waterman Carene, brand new in Marine Amber (on short notice) was $188, free shipping and no tax. I found another for $189. The going price seemed to be $200 to $220.

Best price for a Waterman Carene new, in box in any color and cross borders was a Garnet Red from Germany (free shipping, no tax, no VAT of course) for $133.

[Left FPN]

Best price I could come up with using American-based dealers on line for a Waterman Carene, brand new in Marine Amber (on short notice) was $188, free shipping and no tax. I found another for $189. The going price seemed to be $200 to $220.

 

Best price for a Waterman Carene new, in box in any color and cross borders was a Garnet Red from Germany (free shipping, no tax, no VAT of course) for $133.

Perhaps you will message me those details

[PatientType]

FYI - Your mailbox isn't accepting mail.

Perhaps you will message me those details

[Left FPN]

FYI - Your mailbox isn't accepting mail.

 

Very odd, I have received PM's in the past and have changed nothing in my settings. Maybe that is why I have mailed a few other but had no replies lately. Maybe someone can assist.

[chris.uk]

If you think it's bad on pens you should see how much we pay for fuel in the UK! Still at least we don't have to pay VAT on books they're just really expensive anyway if you buy on the high street, I actually said to a guy in Waterstones the other day that the difference between the online and in store price was quite substantial in some cases and he replied "well in store we have to charge you VAT"... obviously well trained staff there then.

[watch_art]

if pm box is full you can't get new messages.