Neighbors? What country?
It is questionable whether you can do that for something backed 2+ years in advance. Perhaps that applies in the US too - but that gets into the nitty gritty of each state or countryâs detailed legislation - as to when the tax is calculated and applied.
For example, in some areas of law it depends on when the contract of sale becomes unconditional. If you walk into a store and buy an item, it is obvious that it is unconditional immediately. When you back a âstartup projectâ, potentially even before it has reached its initial funding goal, never mind about shipping a finished product, it is not so clear.
This is a well known issue (rort) when there is an impending tax rise, so governments do care about the details.
In any case it would be challenging for Purism to be on top of the crazy rules and regulations that apply in every different country.
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since my country joined the EU i refer to it as just a coun(ty) so it is less important publicly what the exact neighbouring count(ry) it is compared to yours. i just remarked your public declaration thatâs all (by the way support knows the details so you arenât required to publicly make statements regarding your geo-location here on the forums - especially since it could be used against you)
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Hi guys and girls!
As engineer, i can two things: crying and solving* problems.
= First part: Begin the cry =
I am a Hungarian guy, so the VAT for me is 27%, plus the handling fee.
The end result is close the 30%, so when i decided the order, i was happy because i read
the âfree worldwide shippingâ and âEU shipping from Germanyâ sentences.
This two sentence is means for me, based on the Schengen aggreement: i can not pay extra
fees, in my case, circa 180 USD.
Because 180 USD in not a joke.
Sad fact, this money is must be pay. So, me or Purism must be pay.
I dont want to pay, the Purism in turn can not pay.
If the Purism is paying instead of all EU customer, then the Purism financial plans will be collapse.
So, what can we do?
= Second part: try solving the problem =
What is the source the problem? The bureaucracy. What can we do? Hack the bureaucracy! 
So⌠How working the VAT handling? The officer got a package, and see the label on it.
This label says the item description: (smartphone), need custom (yes/no), and the base value of the custom/VAT (in USD).
The âneed customâ is axiom, because the Purism is not pay the custom/VAT of course.
So, we can play with the money attribute.
Writing lower walue than the real: is crime. We are not gangsters, so, lying is not a option.
Must write it a correct value. But⌠How much is the correct value? 600 USD? Really?
The package is not contain 600 USD. The package is contain assemled hardware parts.
What is the cost of these harware parts? One display, two circuit board, one aluminium case,
a battery, cables, and a small set of screws, - this is 600 USD? No. Hell no!
The large part of my 600 USD is payed for the Pusrism developers for salary, and the Purism
firm daily needings: office rent, electricity, water, ergonomic worplace, and hopefully,
time to time a little beer because they deserve.
So, why want the custom officer i pay VAT for the Purism beer or a developers salaries?
This value is not in the box, - this value will be download from the PureOS mirrors.
Okay, okay, i known, the package contanis hardware parts contains lot of hard engineering
works, but this working efforts is not printed to the circuit boardâŚ
Okay, we are maybe a criminals a bit at this point. I am not a lawyer.
So, maybe working solutions: the Purism is not send a full assembled phone for me.
Instead, Purism send a phone DIY kit for me, - and in absulote legal, write the
factory costs of the parts to the package value label, and the âDIY kitâ to the item description.
If this âonly hardware costâ cause a significally lower VAT price for me, then i will happy.
I think, the Librem 5 is a not-to-hard repairable, not-glue designed device.
So, if i have a precision screwdrivers, and an antistatic workplace, i can assembly my phone.
This solution is good for the Purism too, because the assembly work is mine, not for Purism responsibility.
Or, maybe using the Germany reseller, the Purism can deliver from US to Germany a lot of
DIY set, - and this DIY or repair part sets is not a 600 USD per set value, but also a
lower value packages, because this packages not contain a high value mobile phone, just
the sort of naked hardware parts.
I think, this is fully legal.
But i not sure, this is feasible or not?
However, when no method for skip the high VAT, i will pay it, because this device is not a
600 USD value device: The Librem 5 is more-more valuable device for me.
What is the real value of a trustworthy device?
And the truly convergent device?
Because the Librem 5 is these for me. Reliable, trustworthy, and in convergent mode, i able to
do a base desktop functionality, with a legacy Linux software stack, instead of the weak Android apps.
@Purism employee: I want the thank you for you, because you made my dream come true!
By:
Greg
(*) I was say solving problems, but this is a lye in this form.
Because the engineers can not solve problems.
Just change/transform the big problem to a little problem(s).
There is no free lunch!
7 Likes
not sure whether it would work but that may also mitigate ce certification issue. the emitter (radio modules) will be ceâd, and the rest⌠just components.
Wait. If Purism includes the developersâ salaries into the final price, then the result of their work (the software) is the value added by Purism too (by definition of âvalue addedâ), and its cost should also undergo the taxation. Thatâs what VAT is for.
If you donât like paying taxes for this, you have to ask Purism to not include the developersâ salaries into the phone price (thus excluding the result of their work from the value added by Purism to the final device), but in this case you probably will pay for the software separately (cause, well, the software will become the independent product, which anyway will have some price, unless Purism is ready to provide the software gratis), which could or could not undergo the taxation anyway (depending on your local laws).
By asking Purism to send you the disassembled phone, you will remove the assembly costs from the price (and from the value added by Purism), and only this part will not undergo the taxation. This has nothing to do with value added by the developers.
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Dear Greg I understand your complain and I also have the same. The way Purism advertised the phone in the crowd funding campaign was misleading. Personally, I asked them through email and they reassured me that the phone will ship from within EU. It seems they do not understand that 150 or 180 euros for Germany is almost peanuts, but for other countries this money is a very big amount.
Unfortunately it seems that there is no way out now. The best to expect is to ship
from within EU and pay the VAT to the entity that will ship it. This way we will save on customs handling fees which are also a sizeable amount. But I believe that they will not do even thisâŚ
Start saving money 
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sorry but if youâve read the link you shared youâd see itâs a different added value which is taxed by VAT, itâs about margin and profit (added cost) not added value (feature, benefit) to the customer. It is for the state to cut the share of the profit.
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No one is asking this! @Ylegreg, in his own, open and somehow funny but very friendly way, proudly said:
Please read carefully that it is about VAT of 27% (plus the handling fee) for Hungary and if Librem 5 would be imported or assembled (the supplierâs place of establishment) in Germany than VAT would be 19% âif your client is an EU or non-EU customer (private person), this is a B2C service taxed at the your place of establishment - which is Germany. Therefore German VAT would generally be due so invoice as standard. That should cover off all the basics of an invoiceâ, but this is not currently the case. It is common for all EU customers that VAT shall be paid by all with no exception, it is just question here: where to pay for VAT and how much?
âWhen goods are imported from non-EU countries or non-EU territories, the place of importation is determined by where the goods are at the point of entry into the EU.â So if the place of importation is Germany someone from Hungary that bought Librem 5 may be asked from Purism entity in Germany to pay additionally, before its delivery, for VAT of 19% on particular IBAN bank account (within Germany). This might be legal, Iâm not sure. And of course there are a lot of costly details for Purism to be solved if they think this is something that needs to be done for EU customers. @ramnasko was already clear on this approach:
I think, you viewpoint is right.
I think a little more about my âlower VAT when not a product just bunch of parts in the boxâ idea, and i now think: my idea is wrong.
Wrong, because if i buy the latest Marvel movie in DVD from the USA, i need pay the VAT for the whole price, not just the bare empty DVD disc, without a movie.
So, the fair behaviour is the âRender unto Caesarâ.
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Hmm⌠Yes, the 19% (Germany) VAT instead of the 27% (Hungary) VAT is better.
27-19=8%; 600 USD x 0.08 = 48 USD, this is the saved cost.
This is circa the price of a 256GB micro SD Card from Aliexpress. (In the Hungarian local stores, the SD Card prices mostly double than the Ali prices.)
This saving it would be very good for me (and all HU or any EU resident with high local VAT) but the bulk shipment from USA to Germany, (and pay 19% VAT), then after lot of individual shipment from Germany to the other UE countries, (and collect the previously paid 19% VAT costs) is maybe too hard and too expensive (because need lot of human resource) for the Purism and the Germany FLOSS Shop.
So, i dont known, this scenario feasible or not.
I hope so.
Is that the way it works though? Or does the German company have to collect VAT at the end userâs rate?
I mean what you are suggesting is such an obvious rort that you would think that EU country governments would already have thought of it and moved to stop it.
Perhaps you can solve the problem by traveling to Germany to collect the phone in person (or have someone do that on your behalf).
As I see it the only way to avoid paying VAT is to have a VAT number registered in the EU VAT database. I had some problems (solved) because the seller could not find my VAT number. The seller can leave the VAT unpaid only if they find your VAT number in the EU database - else they have to pay the VAT to their government.
This is in at @Quarnero post.
Between the EU countries no VAT, even if the VAT is not same.
The payable VAT is depend on the point (country) when the product is appear.
This appear is not the shore where the freight ship is coming.
This appear is when the containers is proceed at the local post/customer officers.
If the sealed container is opening in Budapest (Hungary), the VAT will be 27%.
If the sealed container is opening in Hamburg (Germany), the VAT will be 19%, and this case, the items is transferable without any plus VAT from Germany to Hungary.
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I donât know about containers but when Iâm purchasing in germany eShops they charge me with my countryâs VAT (which is higher). Itâs being automatically recalculated during checkout after shipping address is confirmed.
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Is this some kind of funny joke? I am sure that âyour eShopsâ having nothing to do with Germany and that goods that you are buying from âGermanyâ were never produced in Germany or otherwise legally entered German territory, meaning/simplifying those eShops are not having permanent stock of finished goods in Germany, period. Please prove that I am wrong, I donât mind, if you know better. And, please read what you wrote: âyou are paying VAT that is more than 19% in Germany ⌠to German bank IBANâ. This is ridiculous.
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lol, itâs amazon.de You are welcome
P.S. and yes Iâm always paying 21% as on amazon.de so on other german eShops.
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This is called Amazonâs Tax Calculation Service and as such is not replacement for the country particular EU VAT rate that each customer needs to pay on top of the ordered product or service.
As Iâve mentioned itâs not specific to amazon, itâs common thing with any other eshop. I can screen the invoice if that is so hard to believe
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This is new to me. I have always paid the VAT of the origin country (19 % buying from Germany) except for when I use my VAT number in which case I pay no VAT at all. The system works so that I should pay VAT of my own country - but if I can deduct it in the tax declaration I pay nothing at all (i.e. I pay 24 % and then deduct 24 %). There is however some mechanism for handling VAT between countries - but I do not know how it works.