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That won't work in Ireland. While 23% is the headline rate, it's not the only rate: https://www.taxworld.ie/vat/summary/vat-rates/ https://www.taxworld.ie/vat/s

That won't work in Ireland. While 23% is the headline rate, it's not the only rate: https://www.taxworld.ie/vat/summary/vat-rates/ https://www.taxworld.ie/vat/summary/vat-rates/

Silhouette 10y ago
There are variable rates almost everywhere, but this API is specifically about digital sales (where the MOSS system applies) so it will typically be that headline rate that you need anyway. Of course, there's no guarantee that that will always be the case, and to know for sure you need to understand the tax systems of 28 different EU member states. This is (one of many reasons) why the new EU VAT rules have been so controversial: the burden for reliable, full compliance is ridiculous.
- jacquesm 10y ago
  Especially for small companies. The cost of compliance can easily outweigh the turnover in countries with few customers and opens you up to being audited on demand by the tax authorities in any country you have customers in.
  - Silhouette 10y ago
    Indeed. I'm not sure we would have done it if we're realised how much of a pain it was really going to be. I know people running slightly larger businesses (a few employees, turnover in the low millions) who have made similar comments even at their scale. There's certainly a view around that it would be better to simply decline sales to customers in other EU member states, and there was even legal advice being taken on whether this broke other EU rules about discrimination. (The conclusion at that time was that it did not, but obviously take your own legal advice if this is relevant to you.) To give credit where it's due, the API we're talking about here does aim at one of the significant pain points once you've gone through the hassle of updating your charging, invoicing and reporting systems, which is keeping up with changes for all of those VAT rates. At least once already, a relevant VAT rate has been changed with only one week's notice, which is crazy. Are all businesses really expected to monitor these things on a daily basis, just in case the rate in a country where maybe you don't even have any current customers changes and then someone from that country buys something? As an aside, if you're selling within the EU, are you sure you're not subject to audit by any tax authority from any EU member state anyway, even if you haven't reported any sales to that country? I haven't checked the exact rules recently, but I remember this was one of the concerns when the new scheme was introduced. In theory, any other tax authority is supposed to contact you via your own national authority under such circumstances, but as I mentioned elsewhere, we know first-hand that this doesn't always happen.
    - jacquesm 10y ago
      I simply shut down. The VATMOSS nonsense ate up all the profits turning a 350 euro VAT filing into a quarterly mess costing upwards of 1000 euros. The API could be useful if it is guaranteed to be always up-to-date, but there is no such guarantee, and it makes it impossible as it is coded right now to do anything else but to compute a sale that has just happened rather than a sale which happened at a specific point in time (which is how you should compute the VAT). Edge cases around end-of-year and rate changes will cause all kinds of trouble. VATMOSS is super annoying to put it mildly and disproportionally hurts small players because it does not have a floor below which it is kept simple.
      - Silhouette 10y ago
        I simply shut down. The VATMOSS nonsense ate up all the profits I'm sorry to hear that, though sadly not surprised. It's also scary how much misinformation or simple ignorance is out there about this issue, and I'm talking generally here not just about parts of this HN discussion. I saw a discussion on another forum recently, and someone there was stubbornly maintaining that compliance was easy and they'd done it and helped other people to do it, yet there was no indication at all that they'd even been aware of the number of edge cases and minor details that can affect what you're supposed to do. I suspect they'd just slapped country-level geolocation on a customer's IP address, checked a country they got from a payment service, and looked up the headline VAT rate, or something along those lines. To be fair, that would probably give the right answer most of the time.
        stdbrouw 10y ago
        To avoid adding to the misinformation and ignorance out there, what are some of these edge cases and minor details?
        jacquesm 10y ago
        Changes without notice, processing transactions around the time of such changes, exceptions for locality not typically reflected in anything as simple as the country code and so on.
- talideon 10y ago
  Sure, the headline rate is applicable for most things, but not everything, and those differences can be important. For instance, if Amazon are selling children's shoes into Ireland, they must charge 0% VAT. That's still a digital sale.
  - thirdsun 10y ago
    When selling physical goods B2C within the european union the VAT rules of the seller's country apply. That means shoes shipped from Germany to Ireland come with the german VAT of 19%. However the sevice discussed in this submission deals with VAT for digital goods and services. Selling shoes, regardless if done via internet, phone or fax, is not considered a sale of a digital product.
  - Silhouette 10y ago
    That's a sale of goods, though, which isn't currently covered by the VAT rules and MOSS scheme that we're discussing here, and doesn't seem to be the intended use for the OP's API.
    - talideon 10y ago
      That still makes it rather useless as an API, when it could be reduced down to a conditional GET on a CSV file listing the countries and their headline VAT rates. For this to be useful as an API, it would need to deal with the actual complicated bits of VATMOSS, which is dealing with multiple different rates for different product types.

That won't work in Ireland. While 23% is the headline rate, it's not the only rate: https://www.taxworld.ie/vat/summary/vat-rates/ https://www.taxworld.ie/vat/summary/vat-rates/

Silhouette 10y ago

There are variable rates almost everywhere, but this API is specifically about digital sales (where the MOSS system applies) so it will typically be that headline rate that you need anyway. Of course, there's no guarantee that that will always be the case, and to know for sure you need to understand the tax systems of 28 different EU member states. This is (one of many reasons) why the new EU VAT rules have been so controversial: the burden for reliable, full compliance is ridiculous.

jacquesm 10y ago
Especially for small companies. The cost of compliance can easily outweigh the turnover in countries with few customers and opens you up to being audited on demand by the tax authorities in any country you have customers in.
- Silhouette 10y ago
  Indeed. I'm not sure we would have done it if we're realised how much of a pain it was really going to be. I know people running slightly larger businesses (a few employees, turnover in the low millions) who have made similar comments even at their scale. There's certainly a view around that it would be better to simply decline sales to customers in other EU member states, and there was even legal advice being taken on whether this broke other EU rules about discrimination. (The conclusion at that time was that it did not, but obviously take your own legal advice if this is relevant to you.) To give credit where it's due, the API we're talking about here does aim at one of the significant pain points once you've gone through the hassle of updating your charging, invoicing and reporting systems, which is keeping up with changes for all of those VAT rates. At least once already, a relevant VAT rate has been changed with only one week's notice, which is crazy. Are all businesses really expected to monitor these things on a daily basis, just in case the rate in a country where maybe you don't even have any current customers changes and then someone from that country buys something? As an aside, if you're selling within the EU, are you sure you're not subject to audit by any tax authority from any EU member state anyway, even if you haven't reported any sales to that country? I haven't checked the exact rules recently, but I remember this was one of the concerns when the new scheme was introduced. In theory, any other tax authority is supposed to contact you via your own national authority under such circumstances, but as I mentioned elsewhere, we know first-hand that this doesn't always happen.
  - jacquesm 10y ago
    I simply shut down. The VATMOSS nonsense ate up all the profits turning a 350 euro VAT filing into a quarterly mess costing upwards of 1000 euros. The API could be useful if it is guaranteed to be always up-to-date, but there is no such guarantee, and it makes it impossible as it is coded right now to do anything else but to compute a sale that has just happened rather than a sale which happened at a specific point in time (which is how you should compute the VAT). Edge cases around end-of-year and rate changes will cause all kinds of trouble. VATMOSS is super annoying to put it mildly and disproportionally hurts small players because it does not have a floor below which it is kept simple.
    - Silhouette 10y ago
      I simply shut down. The VATMOSS nonsense ate up all the profits I'm sorry to hear that, though sadly not surprised. It's also scary how much misinformation or simple ignorance is out there about this issue, and I'm talking generally here not just about parts of this HN discussion. I saw a discussion on another forum recently, and someone there was stubbornly maintaining that compliance was easy and they'd done it and helped other people to do it, yet there was no indication at all that they'd even been aware of the number of edge cases and minor details that can affect what you're supposed to do. I suspect they'd just slapped country-level geolocation on a customer's IP address, checked a country they got from a payment service, and looked up the headline VAT rate, or something along those lines. To be fair, that would probably give the right answer most of the time.
      - stdbrouw 10y ago
        To avoid adding to the misinformation and ignorance out there, what are some of these edge cases and minor details?
        jacquesm 10y ago
        Changes without notice, processing transactions around the time of such changes, exceptions for locality not typically reflected in anything as simple as the country code and so on.
talideon 10y ago
Sure, the headline rate is applicable for most things, but not everything, and those differences can be important. For instance, if Amazon are selling children's shoes into Ireland, they must charge 0% VAT. That's still a digital sale.
- thirdsun 10y ago
  When selling physical goods B2C within the european union the VAT rules of the seller's country apply. That means shoes shipped from Germany to Ireland come with the german VAT of 19%. However the sevice discussed in this submission deals with VAT for digital goods and services. Selling shoes, regardless if done via internet, phone or fax, is not considered a sale of a digital product.
- Silhouette 10y ago
  That's a sale of goods, though, which isn't currently covered by the VAT rules and MOSS scheme that we're discussing here, and doesn't seem to be the intended use for the OP's API.
  - talideon 10y ago
    That still makes it rather useless as an API, when it could be reduced down to a conditional GET on a CSV file listing the countries and their headline VAT rates. For this to be useful as an API, it would need to deal with the actual complicated bits of VATMOSS, which is dealing with multiple different rates for different product types.