US companies need to comply with these rules, but many of them don't.
I think the main issue here is enforcement. I don't think it's reasonable to expect the IRS to enforce foreign legislation on US companies. And that's exactly the reason why US companies often don't comply.
Edit: I'm talking about digital downloads and digital services. If you're shipping goods then there might also be import duty liabilities, not sure.
Enforcement makes the whole process utterly impractical.
The EU's VAT and tax authorities are barely keeping up with work as it is. And the idea that companies with five or six figure turnovers are worth chasing for a few percentage points of extra VAT is nonsensical when there's so much other VAT and tax fraud in the EU.
I'm not convinced taxation is the real point. To me this seems more like a ham-fisted attempt to force businesses to keep records for surveillance purposes.
I wonder if at some point in the next decade we'll see companies having to make their online sales records visible to the tax authorities for "automated verification", so they can find out who's been buying machetes and bomb chemicals.
Yes, absolutely. There are cases where hundreds of millions have gone missing in carousel frauds. I'd assume those take precedence over small VAT cases.
Not sure on the second part, but I do know some tax authorities are already using various data mining techniques to flag certain behaviours.
I think the main issue here is enforcement. I don't think it's reasonable to expect the IRS to enforce foreign legislation on US companies. And that's exactly the reason why US companies often don't comply.
Edit: I'm talking about digital downloads and digital services. If you're shipping goods then there might also be import duty liabilities, not sure.