Proposed US tariffs on lenses from Germany

[pgk]

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1 hour ago, NigelG said:

Local VAT can’t be deducted from used goods AFAIK only on new goods (where it is not actually deducted but instead not charged on the base price.

It depends. Many dealers use the VAT margin scheme (I think its EU wide too) which means that if they are VAT registered then they pay VAT only on the profit on the used item. This is not reclaimable and the invoice must state this. 'Professional' dealers who mainly deal with VAT registered professionals don't tend to use the scheme so their used items have VAT added to them since a VAT registered professional will reclaim it. As far as I am aware, if a margin scheme operating dealer ships an item abroad the VAT is not reclaimable either because stating the vat proportion of the entire price would obviously show their profit margin and they are highly unlikely to do this for obvious reasons (the VAT will be a quite small percentage of the shoe anyway). I used to be VAT registered and had to deal with its vagaries as I dealt with both professional and none professional users of equipment which meant that some used items had VAT on them whilst other items were under the margin scheme. All good fun.

[Michael Geschlecht]

2 hours ago, willeica said:

Cutting profits or prices is different to paying taxes. Lenses going in to the US would still be subject to tax either at the point of import or by the final receiver of the goods. So any taxes due in the US would effectively be paid by the final consumer. Leica or international dealers might have some explaining to do with their customers in other countries as to why US customers were getting more favourable treatment and, before somebody denies this, it would be more favourable treatment. I am aware of customers crossing borders in Europe (particularly in Switzerland) to buy cars, but such 'loopholes' have usually been shut down before trade got too distorted.

I agree with Keith (pedaes) that Leica and its dealer network have considerable margin to play around with, but such price discrimination would be playing with fire with all of the other things coming down the tracks eg the 'B' thing. In the US, people happily accept the fact that goods are advertised net of State and local taxes, whereas in Europe this would be an illegal practice. I should know this as I used to enforce laws relating to such matters at one time in my life.

William

 

Hello William, 

Not everybody in the USofA "happily accepts" things being advertised net of State & Local taxes, as well as things being advertised net of Service Charges, etc. It is good that it is illegal to NOT include them in prices where those laws are current. And to add to that: That Point of Service Taxes such as Value Added Taxes & Sales Taxes should simply be abolished. They should be replaced with an Income Tax that begins above the level where government services are returned. Automatically adjusting to that point if or/& when circumstances change. This, of course, would do away with the necessity for any types of separate Corporate or Business Tax System. No Corporations. Only individual incomes. And individual  Income Tax. 1 simple set of rules for everybody.

Best Regards,

Michael

 

Edited February 25, 2020 by Michael Geschlecht

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[willeica]

14 hours ago, wizard said:

Now, that would be easy, as Leica could always (and rightfully) say that US customers do not get more favorable treatment (since the end price a US customer has to pay will likely be higher than elsewhere, due to the 25% import duy).

You are incorrect about this point. The treatment of US purchasers arises from the actions of their own Government. If Leica were to introduce discriminatory pre tax prices in favour of US purchasers they would have to compensate elsewhere and those of us outside the US would have to pay more and we would, effectively, be subsidising US customers. International trade is a complex global business, but trade wars distort the picture and there are usually no winners in the end.

13 hours ago, bherman01545 said:

All good input, but we've gone a bit off topic here without respect to my issue. My recent issues relate to a used lens, being sold (not be Leica) but a third party dealer and shipped from the EU to the US and charges of +25% duty/tariff because of its classification and place or origin based on the new laws which have been put in place.

No dealer in second hand Leica items could afford to absorb a 25% duty.

I have checked the 10 Commandments and I have not found one that says ' Thou shalt sell Leica gear for the same price in every country in the world, irrespective of local taxes.'

William

[willeica]

12 hours ago, Michael Geschlecht said:

Hello William, 

Not everybody in the USofA "happily accepts" things being advertised net of State & Local taxes, as well as things being advertised net of Service Charges, etc. It is good that it is illegal to NOT include them in prices where those laws are current. And to add to that: That Point of Service Taxes such as Value Added Taxes & Sales Taxes should simply be abolished. They should be replaced with an Income Tax that begins above the level where government services are returned. Automatically adjusting to that point if or/& when circumstances change. This, of course, would do away with the necessity for any types of separate Corporate or Business Tax System. No Corporations. Only individual incomes. And individual  Income Tax. 1 simple set of rules for everybody.

 

Thanks Michael. I have in the past discussed this topic at the OECD with some of the US Federal Trade Commissioners. They justified the local taxes as transparency in respect of local taxes and services, even though they do not provide transparency on the local consumer price. I know which option I would prefer and that is the one we have in Europe. Ultimately, I am of a democratic (small 'd') disposition and if that is what the people who govern determine the system to be, then so must it be. Is there any kind of impetus for a change in the system in the US?

William

[wizard]

vor 7 Minuten schrieb willeica:

The treatment of US purchasers arises from the actions of their own Government. If Leica were to introduce discriminatory pre tax prices in favour of US purchasers they would have to compensate elsewhere and those of us outside the US would have to pay more and we would, effectively, be subsidising US customers. International trade is a complex global business, but trade wars distort the picture and there are usually no winners in the end.

What you describe is not a hypothetical situation, it is the reality. BMW has for many, many years sold fully equipped cars on the US market for a price that was roughly euqivalent to the price of a base version of that car in Germany (and I refer to cars that were actually manufactured in Germany and had to be shipped to the US). I even mentioned this to a BMW person once when taking a tour of BMW's Munich factory, and the stupidity of his response just blew me away. This guy said it would be cheaper for BMW to sell fully equipped cars in the US as opposed to the German market, where customers are used to customize their new cars to their liking. My answer was I'll take the fully equipped car including the stronger engine anytime for the price of the base version, forget about customizing.

So in effect, German and European buyers have been subsidising US customers over a long period (I have not checked recently), and this is but one example out of many, so I do not believe I am incorrect.

[willeica]

1 hour ago, wizard said:

What you describe is not a hypothetical situation, it is the reality. BMW has for many, many years sold fully equipped cars on the US market for a price that was roughly euqivalent to the price of a base version of that car in Germany (and I refer to cars that were actually manufactured in Germany and had to be shipped to the US). I even mentioned this to a BMW person once when taking a tour of BMW's Munich factory, and the stupidity of his response just blew me away. This guy said it would be cheaper for BMW to sell fully equipped cars in the US as opposed to the German market, where customers are used to customize their new cars to their liking. My answer was I'll take the fully equipped car including the stronger engine anytime for the price of the base version, forget about customizing.

So in effect, German and European buyers have been subsidising US customers over a long period (I have not checked recently), and this is but one example out of many, so I do not believe I am incorrect.

The proposal was to absorb a full 25% US tariff (which has been imposed for trade war reasons) which would have a significant effect. The tone of the posts was that Leica and the rest of the world should bend over to suit US Leica users. I am not in favour of having the same price everywhere and I am aware that manufacturers fine tune prices according to local market circumstances, including taxes. This has always happened, but the circumstances of the present case involving German made lenses are quite different. There is not even the 'excuse' of US made substitutes being available. 

William

[jdlaing]

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It’s not about substitutes.

[wizard]

vor 2 Stunden schrieb willeica:

There is not even the 'excuse' of US made substitutes being available. 

+1. But we all know that the man who imposed those tariffs does not need any excuse. 

[willeica]

2 hours ago, jdlaing said:

It’s not about substitutes.

That is what I said.

William

[Michael Geschlecht]

9 hours ago, willeica said:

Thanks Michael. I have in the past discussed this topic at the OECD with some of the US Federal Trade Commissioners. They justified the local taxes as transparency in respect of local taxes and services, even though they do not provide transparency on the local consumer price. I know which option I would prefer and that is the one we have in Europe. Ultimately, I am of a democratic (small 'd') disposition and if that is what the people who govern determine the system to be, then so must it be. Is there any kind of impetus for a change in the system in the US?

William

Hello William,

Here the issue for many people revolves around the lack of visible return to the individual of services, etc reflective of taxes paid. This is coupled with a sometimes irrational disagreement with or/& aversion to the payment of taxes of any kind. While, at the same time, demanding the services, etc that taxes pay for. And seeing nothing negative in the large scale tax avoidance on the part of large corporations. This large scale corporate tax avoidance, while these same corporations demand & get the services, etc that tax dollars pay for,  is 1 of the reasons that the separate set of corporate laws & tax rules should be abolished & replaced with a unitary tax system with NO corporate anything. This should be a simple income tax system for all people where taxes are collected proportional to income above the level where governmental services are returned and that level is automatically adjusted as circumstances change. 

Best Regards,

Michael

Edited February 26, 2020 by Michael Geschlecht

[plzandtanku]

Yea hopefully if you wait it out the tariffs might change or disappear...

[kalifornier]

Jumping in on this thread. Does the tariff/import tax apply to used cameras as well? Or only lenses? Thanks.

[Chuck Albertson]

The EU got the go-ahead from the WTO to impose some 4 billion Euro in tariffs on US goods, in furtherance of the WTO ruling against subsidies provided to Boeing. Here's the proposed list of goods that has been issued (mostly foodstuffs, wine, rum and some chemical feedstocks): https://trade.ec.europa.eu/doclib/docs/2019/april/tradoc_157861.pdf

[Fgcm]

We should make a EU-US common market ASAP. This would boost the economies on both sides of the pond.