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Thread: Chronext commission sale - huge nightmare

  1. #101
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    Quote Originally Posted by Raffe View Post
    That's nonsense, a commission is still a commission even if it isn't expressed in percentage points. It is about whether they buy the watch and it becomes part of their inventory or whether they sell on behalf of a client. And if you had read the thread before you stated that nonsense, you would have known that they clearly communicated about a commission sale.

    And even if they faked a commission sale, effectively buying the watch from the OP when it sold during January, then that still triggered VAT.

    So however way round you look at it, there is no way this sale wasn't subject to VAT.
    I haven’t said the sale wasn’t liable for VAT, I i stated whatever happens chrononext would have to pay vat on the margin, however it was sold. The business I’m in the term ‘commission sale’ can be sometimes be worded as a sale or return... The OP wouldn’t of had to pay any form of VAT selling into Germany, only the buyer would have to costs to pay if bought direct from the OP, he hasn’t as far as he’s concerned he’s bought it from the dealer and has an invoice. Surely Chrononext would have to show the watch in their stock? they have received funds from the buyer and paid out the seller so would have to account for it somehow.

    Maybe I’m just being thick, it if they were only acting purely as ‘middlemen’ then the invoice that the seller received would state the buyers (private person) and the sellers and there would be a separate invoice from chrononext detailing commission. I probably don’t understand the inner workings of international watch selling.......
    Last edited by Rob153; 25th February 2021 at 21:16.

  2. #102
    Grand Master Raffe's Avatar
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    Quote Originally Posted by Rob153 View Post
    I haven’t said the sale wasn’t liable for VAT, I i stated whatever happens chrononext would have to pay vat on the margin, however it was sold. The business I’m in the term ‘commission sale’ can be sometimes be worded as a sale or return... The OP wouldn’t of had to pay any form of VAT selling into Germany, only the buyer would have to costs to pay if bought direct from the OP, he hasn’t as far as he’s concerned he’s bought it from the dealer and has an invoice. Surely Chrononext would have to show the watch in their stock? they have received funds from the buyer and paid out the seller so would have to account for it somehow.

    Maybe I’m just being thick, it if they were only acting purely as ‘middlemen’ then the invoice that the seller received would state the buyers (private person) and the sellers and there would be a separate invoice from chrononext detailing commission. I probably don’t understand the inner workings of international watch selling.......
    No matter how often you repeat - there is a big difference whether they are taking the watch in commission or buying it.

    You are also confusing the dealer's obligation to pay VAT on their markup or commission with the requirement to pay VAT on cross-border transactions following Brexit. Two different things.

    Anyway, have a good evening, I will stop repeating myself.

  3. #103
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    Raffe
    The fact that he has not paid VAT would indicate that you are wrong on this.
    It happens and there is no need to feel any shame over it

  4. #104
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    Quote Originally Posted by Saint-Just View Post
    I do not know what the terms are, but presumably they define "unusual" a little better. And it's not the first time I hear the names Monzo and Paypal associated with frozen accounts, but rarely other banks. So either I have been really unlucky in my readings, or they interpret the law differently to other banks (I know Paypal adds an extra layer of self interest so not in the same league, just mentioned them because of association with frozen accounts).
    In any case they're supposed to enquire about the origin of the funds, not ask what they can see (a break down of recent purchases) and then wait another 20 hours.
    My team work on the calibration of the transaction monitoring systems for banks. There are numerous activities that in aggregate can score enough points to freeze an account pending investigation. Accessing your funds within 24 hrs is a good outcome, it can be much longer.

  5. #105
    Grand Master Raffe's Avatar
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    Quote Originally Posted by Hood View Post
    Raffe
    The fact that he has not paid VAT would indicate that you are wrong on this.
    It happens and there is no need to feel any shame over it
    I have been wrong before and am happy to listen to arguments how this could work. When I say arguments, I mean things that work in the real world, not that 'he has sold it to their UK office'.

    Explain to me one legal way how this transaction could be not subject to VAT. Just one.

  6. #106
    Quote Originally Posted by Raffe View Post
    Explain to me one legal way how this transaction could be not subject to VAT. Just one.
    How do we know it hasn’t been? All we know is that the seller hasn’t been charged VAT, which he wouldn’t be anyway as a seller. Presumably Chronext have taken the hit by honouring the original deal and their commission charges going forward will be increased for UK sellers to compensate for import charges.

  7. #107
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    It's late and perhaps I'm being dense, but surely any relevant VAT was charged at the point of sale based on the German rates. So buyer probably paid the OPs price, plus the commission, plus the German tax.

    I'm not sure it makes any difference whether the watch was sourced from the UK or Germany, the same German VAT applies and UK taxman has nowt to do with it, right?

  8. #108
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    Good to see that op finally got paid. Sad to see chronext still haven't changed their ways. Mad that they are even still operational with service like this

    Sent from my SM-G991B using Tapatalk

  9. #109
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    Quote Originally Posted by M1011 View Post
    It's late and perhaps I'm being dense, but surely any relevant VAT was charged at the point of sale based on the German rates. So buyer probably paid the OPs price, plus the commission, plus the German tax.

    I'm not sure it makes any difference whether the watch was sourced from the UK or Germany, the same German VAT applies and UK taxman has nowt to do with it, right?
    There is no VAT due on transactions between private sellers within the EU, but this changes if the seller is from the UK. There are a couple of threads about this on TZ.

    We simply don't know what happened, but my point stands that there is no way this transaction could be legally done without incurring VAT.

    Good for the OP that he got what he wanted, but I doubt very much that Chronext will be able to continue their business model to ship watches freely between the UK and Germany.
    Someone who lies about the little things will lie about the big things too.

  10. #110
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    Kudos to Raffe and others for maintaining their cool while in a prolonged discussion about VAT. While the underlying facts are important, it is a pleasure to see the discussion has not deteriorated.

    I often wonder how improved my life would be if the people I meet were as patient when discussing complex topics.
    Last edited by AlphaOmega; 26th February 2021 at 07:54.

  11. #111
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    If it is a genuine agency relationship, where Chronext were selling as agent on behalf of the private seller and then taking a commission, the sale would be directly between the seller (as principal) in the U.K. and customer in the EU. You’d think that VAT might naturally apply there but I don’t know the tax rules or if there are exceptions.

    The terms on which the seller entered into their relationship with Chronext are key. If those terms do not describe an agency relationship but say that the watch is sold to Chronext U.K. (either immediately or once an end customer is found) and then on to the customer (or first between Chronext U.K. and EU and then the customer) and Chronext then pay the original seller the end sale price less X%, then it might not really be an agency relationship even though the term “commission” is used. Then the VAT is Chronext’s issue?
    Last edited by Berty234; 26th February 2021 at 08:43.

  12. #112
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    Quote Originally Posted by Berty234 View Post
    If it is a genuine agency relationship, where Chronext were selling as agent on behalf of the private seller and then taking a commission, the sale would be directly between the seller (as principal) in the U.K. and customer in the EU. You’d think that VAT might naturally apply there but I don’t know the tax rules or if there are exceptions.

    The terms on which the seller entered into their relationship with Chronext are key. If those terms do not describe an agency relationship but say that the watch is sold to Chronext U.K. (either immediately or once an end customer is found) and then on to the customer (or first between Chronext U.K. and EU and then the customer) and Chronext then pay the original seller the end sale price less X%, then it might not really be an agency relationship even though the term “commission” is used. Then the VAT is Chronext’s issue?
    I agree.

    So either Chronext have lied about this being a commission sale and have taken the VAT as hit making their P+L on this deal negative (which I find unlikely), or they have done a mistake in the tax representation of the deal. Since selling watches is everything they do (and a large part of them cross-border UK/Germany), I cannot believe that such misrepresentation could have been made in error.

  13. #113
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    Quote Originally Posted by Raffe View Post
    I agree.

    So either Chronext have lied about this being a commission sale and have taken the VAT as hit making their P+L on this deal negative (which I find unlikely), or they have done a mistake in the tax representation of the deal. Since selling watches is everything they do (and a large part of them cross-border UK/Germany), I cannot believe that such misrepresentation could have been made in error.
    It is undeniable that their business model was dealt an extremely serious blow on Jan 1, since they must now account for VAT. Whether they have effectively done the necessary to adapt their business model, or kept their head in the sand, we'll soon see.
    'Against stupidity, the gods themselves struggle in vain' - Schiller.

  14. #114
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    Quote Originally Posted by Saint-Just View Post
    It is undeniable that their business model was dealt an extremely serious blow on Jan 1, since they must now account for VAT. Whether they have effectively done the necessary to adapt their business model, or kept their head in the sand, we'll soon see.
    That's my point.

    How any business that trades cross-border for a living cannot be prepared and have no strategy is beyond me. This is a business which has received over $100 Mio in VC funding over the years and has consistently missed their own revenue goals and has never earned a profit. Not sure their financial backers will be happy if they end up having to swallow a hefty VAT bill because of management incompetence.

  15. #115
    Good to know, thanks for sharing your experience

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