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Europe targets tax evasion by Chinese online vendors

Retailer complaints of lost sales prompt moves to tighten rules

Only an estimated 10% of 20,000 Chinese vendors selling into Germany from online shopping platforms are properly paying taxes due.    © Reuters

HAMBURG, Germany -- European governments have begun to act on complaints from retailers claiming to have lost sales to tax-dodging Chinese vendors.

The German cabinet last month approved a draft bill that would require e-commerce platforms to pay a 19% value-added tax on local online sales if they cannot prove that the vendors have already paid the VAT due. Sweden, Switzerland and the EU are also tightening their VAT rules to combat tax evasion by online sellers. The U.K. meanwhile has corralled and eBay into pledging to share data and weed out tax dodgers.

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