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Thanks for the correction, I updated the blog post.

jkulmala, the other part of your claim is wrong: "The change was made [...] to force them to move more operations to EU to get VAT reductions". After Jan 1, 2015, there will be zero VAT-related incentive to move to the EU, because any company (EU or non-EU) will get the same VAT reductions: the VAT in the customer's country.

Edit: yes, I meant VAT "reductions" not "payments". My point holds though: there won't be any more VAT incentives to move.

It's not what they pay, it's what they get to reduce. If you purchase supplies etc. you get to reduce the VAT you've paid.

So if you have $0 VAT from EU purchases, but $40 VAT from sales, you pay $40. But if you paid $40 VAT from EU purchases, and have $40 VAT from sales, you pay out $0.

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