VAT

 

Running a first world country/high standard of living doesn’t come cheap.

 

...I managed to get 5% after I shed some tears.

Does anyone know why?

It's quite possible they took pity on a grown man shedding tears to get a discount.

 

Economics of the region? I think MX hit the nail on the head with the VAT answer.

 

Nope, economy in europe is shiet atm.

 

Politics

 

The average European has a higher standard of living than the average American or Asian. This of course comes at a slightly higher cost of goods and services. Luxury items like watches are naturally affected by that dynamic.

 

Europeans do NOT have a higher standard of living at all compared to the US, and most especially with Asia. They do however have much higher income tax burden than Americans. The EU VAT is a real burden as well, double most of US typical sales taxes are. You might not have meant "higher standard of living" and meant something else.

 

Prices in Europe are always inclusive of VAT depending on the country and these tax rates are between 16% (Luxembourg) and 27% (Hungary). The discount structure is of course up to each seller, but it is usually the case that regular customers are granted a greater discount than walk-in customers and tourists.

 

You get the privilege to say you paid more. 👍🏽 No, really it's shi* but what can we do? It's worse to buy overseas, i've paid more than Europe price in Vat +Customs.

 

I understand regular customers get more discount than walk-in tourists. But my friend was a tourist and he was offered 20% off in Japan. I accept to pay more because of VAT, I understand that. But what I don’t understand is that why aren’t we getting similar discount in terms of percentage.

 

If you buy a watch as a citizen of a third country (e.g. the USA) in Europe (e.g. Germany), you can get it at the net price, as the seller does not have to pay VAT to the state for exports to third countries*.
Since a VAT rate of 19% applies in Germany, a Tudor Black Bay 58 with bracelet (reference M79030N-0001), for example, would only cost you EUR 3,361.35 (4,000 : 1.19) instead of EUR 4,000.00, which corresponds to a discount of just under 16% granted by the German government. If the dealer gives you an additional 3 - 5% discount, then you also have your 20+% as in Japan...



* shortened explanation, in reality it is of course much more complicated, after all Germany invented the bureaucracy…

 

It is not always the case. But I think in general is due to the VAT. A month ago I was in HKG for business and I had the possibility to buy a white Speedy (millesime 2024) for 7.5k euros.....and I did not buy it......shame on me

 

The discount in HKG is even crazier. My friend was offered 30% discount for the Zenith Chronomaster Sport.

Conlusion: we are being ripped off😭

 

Everything in Europe's more expensive.

 

Healthcare too? Hmmmm…..

 

European heritage is worth more in Europe than it is in the US or Asia.

 

People have hit the nail already.

Of my visits and many co-workers that are from the EU they will just pay more. It is not just watches. If you are running a business if people have accepted or have stopped resisting the higher prices why wouldn't you charge more? Cigars are a great example, in Mexico you can aquire Cubans very easily and within reason. But EU, Habanos S.A. charges 3x sometimes 4x for the same sticks. This is not tied to tax only, they charge that cause they can.

 

Same mentality is coming to the states, things cost what people are willing to pay. Nobody seems to care how much they pay in taxes or anything else. I’m blown away at what people are willing to pay for a concert ticket today.

 

@udev
Tobacco products are a very bad example. If a packet of 20 cigarettes costs 7.00 euros, then the price here in Germany includes 19% VAT (1.12 euros) and 3.62 euros tobacco tax. Incidentally, tobacco tax will be increased every year on January 1 until 2027.
Otherwise, I don't think that prices here in Germany are significantly higher than in the USA – apart from fuel and land.

 

@udev
Tobacco products are a very bad example. If a packet of 20 cigarettes costs 7.00 euros, then the price here in Germany includes 19% VAT (1.12 euros) and 3.62 euros tobacco tax. Incidentally, tobacco tax will be increased every year on January 1 until 2027.
Otherwise, I don't think that prices here in Germany are significantly higher than in the USA – apart from fuel and land.

I am not speaking to machine made cigars or cigarettes or all tobacco. I speak directly to hand made Cuban cigars. Which it is not a VAT situation. Habanos S.A. (they control all Cuban cigars sales) has admitted to directly fixing the price in the EU for hand made Cuban cigars.

I should have been more specific, as I do not smoke machine made and they are more prominent in the EU.

 

-20%, -30%? What sort of Luxury Experience would that be?

 

Discount can vary based on brand, model, availability, events (black Friday, before shop renovation/relocation etc.).
In the past approx. 15 years in Europe I remember getting 30% on Breitling, 40% on Tag Heuer and Zenith and 50% on Frédérique Constant (all at ADs), but remember seeing 30-50% discount on various Rado, Longines, Tissot, Montblanc etc. models as well.

 

Usually, it is import fees and/or VAT tax, Japanese cars used to be expensive in Thailand but a while back Japan decided to avoid higher costs imposed on Thais so they started manufacturing cars in Thailand including cars, suv's, and trucks in Thailand to cut labor, import fees, and VAT. Ford and Chevy did the same with trucks and SUVs. Now Japanese cars Ford, and Chevy's sold in Australia and NZ are shipped from Thailand, and not Japan.

 

For how long would one have to wear a new watch purchased overseas before one was allowed to return home and not pay import duties at customs? At what point does a watch purchased overseas become “used” merchandise that is not subject to import duties? One month? Six months? One year? Longer?

 

Assuming the EU is like the US, any import is subject to taxes regardless if used or new. Used goods are also subject to VAT.

 

well i always did more interesting bargains when purchasing my watches in Germany , Italy, Singapore and Japan

 

The EU is taxed much more heavily

 

Exactly, it is not a question of wealth because it could be argued that the US are among the wealthiest countries (as a country) in the world While in the EU we have VAT accounting for anything between 19% to 25% of any purchase and this is as true of Germany or the Netherlands as it is of the poorest countries of the union.

In fact , take away the VAT many European products are actually cheaper that they are elsewhere.

I am involved in the musical instruments trade, we sell, from Europe (without taxes for export) to all countries of the world with prices LOWER than local.

VAT doesn't apply to export.

 

Rolexes cost less in the EU than in the United States, not more.

 

VAT+Duties+Market competitiveness explain the higher prices in Europe.

For example, Mercedes Benz. Their cars are only sold fully loaded in the US but the same fully loaded MB in Germany costs more...

Even at the micro level some vendors use this. I remember paragliding in Bali and after getting friendly with the seller he explained they had 3 different prices for the same activity. One for the Japanese (most expensive), one for the Americans, then one for the Europeans (least expensive)...

 

I realized the same too late. I thought I was getting a good deal when I got a few watches at retail but supposedly tax free in andorra. When we got home, the SRP here was significantly lower.

but then again, no watches available here for sale for the same brand/model. So there lies the rub.

 

You get August off. We work...

 

I don’t know about the rest of Europe but in Britain it seems that everything is more expensive.

 

If I put a watch in my Amazon cart the final cost can be anywhere from free delivery and zero tax/duty to 100percent tax/duty depending on delivery address