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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 f

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.
    - Silhouette 10y ago
      A few that come to mind immediately are the record-keeping requirements (need to keep two acceptable and non-conflicting sources of evidence for each place of supply, for a long time), geolocation inaccuracy (geo-IP databases typically have about 5-10% error rate in country identification according to most reports I've seen), regional variations (dependent territories might have different tax rules to their parent member state, so the country alone isn't sufficient to determine the correct tax rate), and dealing with refunds/returns/replacements/etc (where unlike most VAT returns as I understand it, for a MOSS return you're supposed to retrospectively update things once you've already filed them and then deal with how to adjust for any tax now over/underpaid originally). As people have noted in various other comments here, you also have to keep up with any changes in the rates themselves and understand any local rules in each member state on which rate applies, possibly deal with just plain incorrect demands from foreign tax authorities or more reasonable but still onerous tax audits if your number comes up, and of course there are the basic overheads for operating a second tax scheme on top of your national one in the first place, including some slightly eccentric rules for dealing with exchange rates if they affect you. Also, the VAT rules don't override consumer protection rules about advertising VAT-inclusive prices for B2C sales, which creates some interesting dilemmas if you're running a web site where you want to show correct prices based on a visitor's location but you don't have sufficient evidence until you get to the payment step to actually verify that location to a satisfactory standard. The only completely safe solution to this that I know is to advertise a fixed price to everyone, which means you're taking the VAT hit directly from your revenues and if nations change their VAT rates then it's your business that wins/loses, not the customer, which is entirely not how VAT is supposed to work.

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.
  - Silhouette 10y ago
    A few that come to mind immediately are the record-keeping requirements (need to keep two acceptable and non-conflicting sources of evidence for each place of supply, for a long time), geolocation inaccuracy (geo-IP databases typically have about 5-10% error rate in country identification according to most reports I've seen), regional variations (dependent territories might have different tax rules to their parent member state, so the country alone isn't sufficient to determine the correct tax rate), and dealing with refunds/returns/replacements/etc (where unlike most VAT returns as I understand it, for a MOSS return you're supposed to retrospectively update things once you've already filed them and then deal with how to adjust for any tax now over/underpaid originally). As people have noted in various other comments here, you also have to keep up with any changes in the rates themselves and understand any local rules in each member state on which rate applies, possibly deal with just plain incorrect demands from foreign tax authorities or more reasonable but still onerous tax audits if your number comes up, and of course there are the basic overheads for operating a second tax scheme on top of your national one in the first place, including some slightly eccentric rules for dealing with exchange rates if they affect you. Also, the VAT rules don't override consumer protection rules about advertising VAT-inclusive prices for B2C sales, which creates some interesting dilemmas if you're running a web site where you want to show correct prices based on a visitor's location but you don't have sufficient evidence until you get to the payment step to actually verify that location to a satisfactory standard. The only completely safe solution to this that I know is to advertise a fixed price to everyone, which means you're taking the VAT hit directly from your revenues and if nations change their VAT rates then it's your business that wins/loses, not the customer, which is entirely not how VAT is supposed to work.