3 ms·

"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.
    - jacquesm 11y ago
      Small problems that bureaucrats did not think about: - the big companies they intended to hit have the resources to deal with the problem, the smaller onces do not. - There are such things as proxy servers and VPNs. - many online B2C transactions within the EU are for amounts < 5 euro, the overhead of paying VAT for a single customer from say Slovenia does not weigh up against the profits so entire countries will simply be cut off from being served a variety of services. It's a huge mess, and let's not get into the Irish authorities incompetence in setting this whole thing up and their communications with businesses all over Europe.
      - Silhouette 11y ago
        You're right that it's a huge mess. As you point out, it's only larger companies who have the resources to make a complete and ongoing attempt to comply with every little rule. Therefore a market has been created for tools to let small businesses carry on doing what they were previously doing quite happily anyway. Perhaps the most damning indictment of all is that this market will probably be served by... the same kinds of large multinationals that were rearranging their accounts to reduce their tax burdens in the first place, and that will now also be able to cream off a significant margin from many small businesses' transactions as well. Incidentally, you missed one of my favourite points that the authorities still seem to have overlooked: they apparently continue to assume that those small businesses who do trade on-line are all selling something via some marketplace site, which can therefore take on much of the burden of compliance, record-keeping, and the like. I guess we'd all better start shorting Stripe, GoCardless, and friends, because presumably according to the EU they have no small business customers. ::facepalm::
  - undefined0 11y ago
    I just want to launch websites to test an idea, see if it works. But with VAT MOSS I have to go through a mess just to ensure I'm doing everything legally, even though I might not even continue with the idea after 1 month. It's an unnecessary frustration.
- jacquesm 11y ago
  On small transaction the cost of that 'good accountant' will easily outweigh your profits.
- Silhouette 11y ago
  I've never met that good accountant. On the contrary, my experience has been that every accountant I've dealt with in connection with my small business interests also struggled to get their heads around VAT MOSS for a while, and even they had no idea how it was going to hit small businesses on 1 January this year. And as others have also pointed out, there are plenty of very small busineses who could never afford that level of ongoing accountancy support, nor to hire people to develop the relevant record-keeping systems and automate the corresponding reporting processes.
- tobltobs 11y ago
  "a good accountant will take care of the rest." Are we living on the same planet?
  - deleted 11y ago
    [deleted]
- dogma1138 11y ago
  That's actually near impossible each EU country will have a flat VAT rate as well as reduced VAT rates on certain items (books, children cloths, cat sex toys etc.) there are also other different regulations especially in regards to 2nd hand items and crafted items. In some EU countries re-selling an item will not trigger VAT, in some it will, in some it might require some work to be done (e.g. refurbishing) in which case you need to charge VAT but even that's not that simple because in some countries you only charge VAT on the actual work and bill of material that went into the refurbishing process, in some countries you need to charge VAT for the whole amount based on the final sale price and the list goes on and on and on. VAT MOSS also completely ignores the fact that you might be VAT exempt in your own country, if you are in the UK you can choose not to register for VAT if your business earns under 100K a year in this case you simply do not charge VAT, but well Spain doesn't care about that so they might come knocking because you have a Spanish costumer or 2. There is no realistic way for people to figure out when and how much VAT you'll need to charge, and you'll need quite a good and expensive accountant to sort that out and even they might actually not know everything.
kybernetyk 11y ago
>You opened a VAT MOSS account in all 28 EU member states? No, but my payment processor did.
- fsloth 11y ago
  Who's your payment processor? At least stripe seems to not offer much help here except source the credit card to a country of origin
  - _delirium 11y ago
    Paddle and Fastspring are two that handle VAT collection and remittance.
  - kybernetyk 11y ago
    I personally use Fastspring. (Legally the sales are handled by Fastspring and I invoice them so they are the only party I have to care about when it comes to VAT).
walshemj 11y ago
no different to 52 different state sales tax's
- lsc 11y ago
  > no different to 52 different state sales tax's so... I don't know anything about the EU law we're talking about, but I do know a bit about US sales tax. First, if I sell a service, not a physical product, my understanding is that I don't pay sales tax at all. Next, even if I am selling physical product, I only need to worry about sales tax in the state in which I do business. In my case, California (and maybe Washington, as I have a contractor there.) But really, it's a non-issue, because I'm selling a service not a product. Now, if I was selling a product, it is more complex than it sounds. Yes, as the business, I don't worry about taxes in the states where I don't have a presence, but those customers are expected to file a 'use tax' - many people don't, and some businesses take advantage of this, for example, provantage will ship my supermicro crap from California to Ohio or some other midwestern state, then back to me, so that I don't have to pay them sales tax. It's super irritating, because I pay my use tax, so it's extra accounting work for me, and it is extra shipping money and time. I usually end up getting the provantage price and sending it to my local supermicro re-seller (kingstarusa) and buying from them afte rthey price match. But the point being that the selling company doesn't worry about sales tax if they ship a physical product to a state they don't have a presence in. That's the recipient's problem to sort out (or ignore) But that's not really the complexity of the US sales tax system. The complexity is that within the states you do business, every county has a different sales tax. And I'm supposed to figure out what county you are in and calculate your tax. (fortunately, I don't have to pay each county; I pay the state board of equalization) - it's a pain in the ass. you need to buy a special database, because counties don't line up with zipcodes always, and yadayadayada. It's doable, just not fun. But I bet that's more complex than calculating a different vat for each EU country, though actually paying each EU country might be a bigger pain in the ass. Seems like something that could be outsourced to your payment provider, though. (note, this information about state sales tax is about a decade out of date; that's about as long as it has been since I sold physical goods. Point being that it's both more and less complex than you imply.)
- davidgay 11y ago

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.
  - jacquesm 11y ago
    Small problems that bureaucrats did not think about: - the big companies they intended to hit have the resources to deal with the problem, the smaller onces do not. - There are such things as proxy servers and VPNs. - many online B2C transactions within the EU are for amounts < 5 euro, the overhead of paying VAT for a single customer from say Slovenia does not weigh up against the profits so entire countries will simply be cut off from being served a variety of services. It's a huge mess, and let's not get into the Irish authorities incompetence in setting this whole thing up and their communications with businesses all over Europe.
    - Silhouette 11y ago
      You're right that it's a huge mess. As you point out, it's only larger companies who have the resources to make a complete and ongoing attempt to comply with every little rule. Therefore a market has been created for tools to let small businesses carry on doing what they were previously doing quite happily anyway. Perhaps the most damning indictment of all is that this market will probably be served by... the same kinds of large multinationals that were rearranging their accounts to reduce their tax burdens in the first place, and that will now also be able to cream off a significant margin from many small businesses' transactions as well. Incidentally, you missed one of my favourite points that the authorities still seem to have overlooked: they apparently continue to assume that those small businesses who do trade on-line are all selling something via some marketplace site, which can therefore take on much of the burden of compliance, record-keeping, and the like. I guess we'd all better start shorting Stripe, GoCardless, and friends, because presumably according to the EU they have no small business customers. ::facepalm::
- undefined0 11y ago
  I just want to launch websites to test an idea, see if it works. But with VAT MOSS I have to go through a mess just to ensure I'm doing everything legally, even though I might not even continue with the idea after 1 month. It's an unnecessary frustration.
jacquesm 11y ago
On small transaction the cost of that 'good accountant' will easily outweigh your profits.
Silhouette 11y ago
I've never met that good accountant. On the contrary, my experience has been that every accountant I've dealt with in connection with my small business interests also struggled to get their heads around VAT MOSS for a while, and even they had no idea how it was going to hit small businesses on 1 January this year. And as others have also pointed out, there are plenty of very small busineses who could never afford that level of ongoing accountancy support, nor to hire people to develop the relevant record-keeping systems and automate the corresponding reporting processes.
tobltobs 11y ago
"a good accountant will take care of the rest." Are we living on the same planet?
- deleted 11y ago
  [deleted]
dogma1138 11y ago
That's actually near impossible each EU country will have a flat VAT rate as well as reduced VAT rates on certain items (books, children cloths, cat sex toys etc.) there are also other different regulations especially in regards to 2nd hand items and crafted items. In some EU countries re-selling an item will not trigger VAT, in some it will, in some it might require some work to be done (e.g. refurbishing) in which case you need to charge VAT but even that's not that simple because in some countries you only charge VAT on the actual work and bill of material that went into the refurbishing process, in some countries you need to charge VAT for the whole amount based on the final sale price and the list goes on and on and on. VAT MOSS also completely ignores the fact that you might be VAT exempt in your own country, if you are in the UK you can choose not to register for VAT if your business earns under 100K a year in this case you simply do not charge VAT, but well Spain doesn't care about that so they might come knocking because you have a Spanish costumer or 2. There is no realistic way for people to figure out when and how much VAT you'll need to charge, and you'll need quite a good and expensive accountant to sort that out and even they might actually not know everything.

kybernetyk 11y ago

>You opened a VAT MOSS account in all 28 EU member states? No, but my payment processor did.

fsloth 11y ago
Who's your payment processor? At least stripe seems to not offer much help here except source the credit card to a country of origin
- _delirium 11y ago
  Paddle and Fastspring are two that handle VAT collection and remittance.
- kybernetyk 11y ago
  I personally use Fastspring. (Legally the sales are handled by Fastspring and I invoice them so they are the only party I have to care about when it comes to VAT).

walshemj 11y ago

no different to 52 different state sales tax's

lsc 11y ago
> no different to 52 different state sales tax's so... I don't know anything about the EU law we're talking about, but I do know a bit about US sales tax. First, if I sell a service, not a physical product, my understanding is that I don't pay sales tax at all. Next, even if I am selling physical product, I only need to worry about sales tax in the state in which I do business. In my case, California (and maybe Washington, as I have a contractor there.) But really, it's a non-issue, because I'm selling a service not a product. Now, if I was selling a product, it is more complex than it sounds. Yes, as the business, I don't worry about taxes in the states where I don't have a presence, but those customers are expected to file a 'use tax' - many people don't, and some businesses take advantage of this, for example, provantage will ship my supermicro crap from California to Ohio or some other midwestern state, then back to me, so that I don't have to pay them sales tax. It's super irritating, because I pay my use tax, so it's extra accounting work for me, and it is extra shipping money and time. I usually end up getting the provantage price and sending it to my local supermicro re-seller (kingstarusa) and buying from them afte rthey price match. But the point being that the selling company doesn't worry about sales tax if they ship a physical product to a state they don't have a presence in. That's the recipient's problem to sort out (or ignore) But that's not really the complexity of the US sales tax system. The complexity is that within the states you do business, every county has a different sales tax. And I'm supposed to figure out what county you are in and calculate your tax. (fortunately, I don't have to pay each county; I pay the state board of equalization) - it's a pain in the ass. you need to buy a special database, because counties don't line up with zipcodes always, and yadayadayada. It's doable, just not fun. But I bet that's more complex than calculating a different vat for each EU country, though actually paying each EU country might be a bigger pain in the ass. Seems like something that could be outsourced to your payment provider, though. (note, this information about state sales tax is about a decade out of date; that's about as long as it has been since I sold physical goods. Point being that it's both more and less complex than you imply.)
davidgay 11y ago