Wednesday, December 7, 2011

Netflix Opens in Luxembourg: Yes, Tax Rates Matter


This is no secret: Luxembourg is the place to be for internet commerce. It is simply a play on VAT differentials. As long as the prevailing regulation has the merchant charge the VAT rate of its host country rather than the VAT rate of the customer's country (difficult to determine), Luxembourg is the best deal. Until it gets steamrolled by those who think that it's not funny or logical that the smallest member state charges the smallest VAT tax.

Netflix just joins a list of prominent foreign corporations, mostly US, in Luxembourg, who easily were drawing the same conclusions.



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