Guidelines vary between countries, but when you move from classic trading/manufacturing to services, they simply cannot be applied literally -- i'll need my computer to make software, but i won't sell it over, and i'll get vat relief anyway; and obviously i'll need an ipad or three to test my website, etc.
This is why vat auditing is so ruthless: because it's routinely abused by everyone, so the enforcers have to be harsh to maintain a shred of credibility.
I'm not saying VAT is bad per se (it's just another tax), only that is a clever way to tax consumption by fixed-income employees in a regressive way, which is really not what you want if you're trying to make the system fairer for, er, those fixed-income employees.
This is why vat auditing is so ruthless: because it's routinely abused by everyone, so the enforcers have to be harsh to maintain a shred of credibility.
I'm not saying VAT is bad per se (it's just another tax), only that is a clever way to tax consumption by fixed-income employees in a regressive way, which is really not what you want if you're trying to make the system fairer for, er, those fixed-income employees.