5 ms·

How are EU regulations holding EU IT industry back?

by cLeEOGPw 11y ago

pvdebbe 11y ago
Regulations by definition are for holding rapidly advancing industries back, for various reasons.
- AnthonyMouse 11y ago
  Good regulations have almost nothing to do with technological change. We have regulations against pollution or fraud not because the technology has changed but because the incentives otherwise don't line up. You can pollute the air using technology from 1895 and if it's cheaper to do that than to install emissions controls then economics will drive you to do that unless regulations prohibit it. Regulating very new technologies is almost always unwise. There will already be existing generic laws and regulations against serious bad outcomes (you are not allowed to knowingly kill people regardless of method) and for less serious outcomes it's generally better to let the technology shake out and take some time to study and understand it, even if there is a short-term cost to doing that.
  - pvdebbe 11y ago
    Well I'm thinking along the lines, "low-polluting equipment is most likely more expensive => the company is held slightly back by demanding new standards". Maybe some regulation is needed, some is not. And all of it is by definition against the company. But not necessarily against the society as a whole.
- tormeh 11y ago
  That's just plain wrong.
tobltobs 11y ago
E.g. you want to sell digital goods in the EU? Check VAT MOSS. You can't find a EU law which will be a show stopper for you? No problem, there will be a national law which kills your business idea.
- charlesdm 11y ago
  VAT MOSS is annoying, but to say it's a show stopper is quite excessive. Yes, I too would prefer not to have to deal with all the admin stuff, but technically, US companies are also required to register for VAT in the EU (if they're selling to EU customers and/or businesses). Most just don't.
  - tobltobs 11y ago
    "Yes, I too would prefer not to have to deal with all the admin stuff,.." You opened a VAT MOSS account in all 28 EU member states? Really?
    - charlesdm 11y ago
      As long as you bill/invoice the correct amount (i.e. the correct VAT rate for each member state), a good accountant will take care of the rest.
      - bluecalm 11y ago
        Good accountant a small business can't afford to hire. You make a product, you want to sell it. You have no idea where your customers are going to come from or if anyone buys the product in the first place. You have to comply with this madness from day one though. Oh, and many payment processors won't give you necessary information to comply anyway. You need 2 pieces of evidence from every transaction (address, IP the purchase is made from for example) and you often don't have access to that information. It's just typical "we know many small business won't be able to comply and we are not going to go after them for now but there will always be something if we need to" kind of thing.
        Silhouette 11y ago
        You need 2 pieces of evidence from every transaction You need 2 pieces of evidence that agree from every transaction, which is a significantly harder standard to meet. For now, IP address is being accepted as one of them. However, most estimates seem to put geolocation as accurate only for about 90% of checks, and even if it's accurate, the information you'll get back typically won't be enough to determine which rules to apply in member states that have regional variations in their VAT rules. It's basically impossible to comply properly with the current rules using a fully automated system, and therefore basically everyone trading on-line is risking compliance issues because you can't avoid them. The whole thing is kind of a joke, except for the not-so-funny part where your number comes up and you get business-destroying levels of overhead dealing with the audit.
mianos 11y ago
Because, international companies are going to avoid operating in Europe unless the profit outweighs the burden of stupid laws like this. The start up I work for would not consider expansion in Europe before the USA.
radicalbyte 11y ago
My next startup is going to be a digital payments provider which takes the headache out of VAT compliance for EU SMEs.
- MattBearman 11y ago
  Fastspring already does this, and thank god they do, I really don't want to deal with the vat moss bullshit

How are EU regulations holding EU IT industry back?

pvdebbe 11y ago

Regulations by definition are for holding rapidly advancing industries back, for various reasons.

AnthonyMouse 11y ago
Good regulations have almost nothing to do with technological change. We have regulations against pollution or fraud not because the technology has changed but because the incentives otherwise don't line up. You can pollute the air using technology from 1895 and if it's cheaper to do that than to install emissions controls then economics will drive you to do that unless regulations prohibit it. Regulating very new technologies is almost always unwise. There will already be existing generic laws and regulations against serious bad outcomes (you are not allowed to knowingly kill people regardless of method) and for less serious outcomes it's generally better to let the technology shake out and take some time to study and understand it, even if there is a short-term cost to doing that.
- pvdebbe 11y ago
  Well I'm thinking along the lines, "low-polluting equipment is most likely more expensive => the company is held slightly back by demanding new standards". Maybe some regulation is needed, some is not. And all of it is by definition against the company. But not necessarily against the society as a whole.
tormeh 11y ago
That's just plain wrong.

tobltobs 11y ago

E.g. you want to sell digital goods in the EU? Check VAT MOSS. You can't find a EU law which will be a show stopper for you? No problem, there will be a national law which kills your business idea.

charlesdm 11y ago
VAT MOSS is annoying, but to say it's a show stopper is quite excessive. Yes, I too would prefer not to have to deal with all the admin stuff, but technically, US companies are also required to register for VAT in the EU (if they're selling to EU customers and/or businesses). Most just don't.
- tobltobs 11y ago
  "Yes, I too would prefer not to have to deal with all the admin stuff,.." You opened a VAT MOSS account in all 28 EU member states? Really?
  - charlesdm 11y ago
    As long as you bill/invoice the correct amount (i.e. the correct VAT rate for each member state), a good accountant will take care of the rest.
    - bluecalm 11y ago
      Good accountant a small business can't afford to hire. You make a product, you want to sell it. You have no idea where your customers are going to come from or if anyone buys the product in the first place. You have to comply with this madness from day one though. Oh, and many payment processors won't give you necessary information to comply anyway. You need 2 pieces of evidence from every transaction (address, IP the purchase is made from for example) and you often don't have access to that information. It's just typical "we know many small business won't be able to comply and we are not going to go after them for now but there will always be something if we need to" kind of thing.
      - Silhouette 11y ago
        You need 2 pieces of evidence from every transaction You need 2 pieces of evidence that agree from every transaction, which is a significantly harder standard to meet. For now, IP address is being accepted as one of them. However, most estimates seem to put geolocation as accurate only for about 90% of checks, and even if it's accurate, the information you'll get back typically won't be enough to determine which rules to apply in member states that have regional variations in their VAT rules. It's basically impossible to comply properly with the current rules using a fully automated system, and therefore basically everyone trading on-line is risking compliance issues because you can't avoid them. The whole thing is kind of a joke, except for the not-so-funny part where your number comes up and you get business-destroying levels of overhead dealing with the audit.

mianos 11y ago

Because, international companies are going to avoid operating in Europe unless the profit outweighs the burden of stupid laws like this. The start up I work for would not consider expansion in Europe before the USA.

radicalbyte 11y ago

My next startup is going to be a digital payments provider which takes the headache out of VAT compliance for EU SMEs.

MattBearman 11y ago
Fastspring already does this, and thank god they do, I really don't want to deal with the vat moss bullshit