12 ms·

Krita Foundation in Trouble

529 points by gcp 9y ago

Chris2048 9y ago
Did the same accountant that advised them in the first place bag the 4k for cleaning up the mess?
- boudewijnrempt 9y ago
  Definitely not. When we got the notification, I asked Ton Roosendaal which accountant the Blender Foundation uses, and approached them. My thinking was, they at least had experience with one open source organization.
  - Chris2048 9y ago
    Ah, good :-)
Jonnax 9y ago
That's really sad to hear. With how complex laws are, it's scary that going to a professional may not be sufficient. But when you're totally unfamiliar with what the requirements are what can you do? Do large law/accountancy firms give a guarantee for their advice in the case that it was incorrect?
- _wmd 9y ago
  No, they can be slippery as all hell. Ask a question by e-mail, expect a definitive yes/no answer, instead receive a phone call that's instantly claimed to be "off the record", and receive a parable about a nameless other customer who had this one situation this one time. Chances are the accountancy firm had never set up a charity before and has misunderstood the constraints, and chances are also high that they won't be liable for the problem caused without some long drawn out struggle.
  - wila 9y ago
    True, but it is worse than that. If you call the tax office and ask them direct questions about doing business abroad then even they still give you an answer with a disclaimer that it might not be correct.
    - greenshackle2 9y ago
      My flatmate is an international sales tax expert. I helped her debug hairy tax problems a couple times - not that I have any expert knowledge of tax laws, I was mostly rubber-ducking her - it sounds like an absolute clusterfuck. Like other domains of law it's not always clear cut, it wasn't like, yeah Alice Inc. owes exactly X% taxes because of law A, it was like, we can argue that Alice Inc. owes X% based on laws A and B, C, but the tax authority could argue they owe Y% based on an argument that actually, laws B, D, and E apply to their case, which we would counter-argue with, etc., etc., etc. So I'm not surprised the tax office wouldn't give straight answers; even they may not know how a court would rule depending on the specifics of the case.
- mrkrabo 9y ago
  Say what you will but this is simply fraud. If they were selling stuff, they should've collected and paid the VAT for Dmitry. You are NOT a non-profit if you sell stuff. There is absolutely no complexity about this. Didn't they see anything wrong with selling stuff without collecting the VAT from every transaction? And the best part: they are now separating the sales from the foundation so they can avoid paying taxes. This is the kind of stuff HN abhors... ooops it's not Amazon, it's Krita! Then let's allow it!!!
  - boudewijnrempt 9y ago
    Well, actually there is complexity. We did pay the VAT over everything we sold, of course. That was simple. What we didn't do was pay VAT in the Netherlands over the money we sent Dmitry for his work in Russia. If the Foundation had been a company, we would have had to pay that VAT in the Netherlands, but would have claimed it back -- net result, 0. If the foundation had never sold anything, so not been company-like, there wouldn't have been VAT due. Because it was a mix, the tax people wanted the full VAT paid, which could not have been reclaimed. In short: you're enough like a company that the VAT gets transfered, not enough like a company that you can claim it back. Even the accountants found that complex and disputable...
    - molszanski 9y ago
      Also, I would try going to the local tax office. Maybe yours is a friendly one (I've been to both types) and you can get to speak with a your tax area local management. They might have enough knowledge and administrative power and help you out. Human to human protocol. Been there, done that, got a t-shirt.
      - gcp 9y ago
        Maybe you should read the original article first. Just saying. They spent months, got a lawyer involved, and got the fine reduced, a bit.
        majewsky 9y ago
- pbarnes_1 9y ago
  You can only ever sue a law/accounting firm for the total cost of services rendered to you in that year or whatever. Depends on the client agreement. Even then it's always a grey area where it's advice that may or may not be what you should do and it depends on your decision, blah blah blah.
- roel_v 9y ago
  "Do large law/accountancy firms give a guarantee for their advice in the case that it was incorrect?" Do you give a guarantee on your code, including damages?
  - icebraining 9y ago
    The company I work for does, that's why we have insurance.
- leksak 9y ago
  One of the first things I'll do in the future when creating a company is establishing a good relationship with a reputable business lawyer and accounting firm. It's literally one of the first things I'd put money towards. Sounds like their accountant might not have been entirely on the up-and-up. As soon as I get my paycheck I'm totally donating a little. I've used Krita and enjoyed it as an alternative to when I do not have access to Photoshop. Now if only ZBrush had a top-tier alternative that would be something.
sequence7 9y ago
The link's not working for me, google text only cache: http://webcache.googleusercontent.com/search?q=cache:g-C8yv4ZnH4J:https://krita.org/en/item/krita-foundation-in-trouble/&num=1&hl=en&gl=uk&strip=1&vwsrc=0 http://webcache.googleusercontent.com/search?q=cache:g-C8yv4...
- distances 9y ago
  Or head to https://planet.kde.org https://planet.kde.org for an aggregated version of the full article.
- binaryanomaly 9y ago
  It works but is very slow.
dbrgn 9y ago
Just a quick reminder, if everyone here donates just 3-5$, the expenses will be paid in no time :) Krita is a great software, and even though I'm not an artist it's worth supporting.
- sddfd 9y ago
  How would I dontate? The site seems down atm.
  - boudewijnrempt 9y ago
    It's very slow... The hackernews effect, I'm afraid. Internationally, paypal is easiest: just use foundation@krita.org. Otherwise, for people in the EU, our bank account is ING, BIC: INGBNL2A, IBAN: NL72INGB0007216397 .
    - laumars 9y ago
      I hope this (the "Hacker News effect") doesn't bump up your hosting costs as that's the last thing you'd need. For what it's worth, I've donated. :)
      - dom0 9y ago
        EU bank transfers are free of charge.
        kobeya 9y ago
        He meant server hosting costs.
        deanclatworthy 9y ago
        This is not true for every bank in every EU country.
        icebraining 9y ago
gghh 9y ago
I'd like to drop a note on how much I appreciate Krita. I'm not an artist by any mean, I'm a programmer and while I think I write/draw/sketch a lot on paper. A few months ago I switched from paper to digital hand-writing and bought an old Wacom Intuos drawing tablet. I'm on Linux and Krita works great with a stylus; very comfortable and intuitive, I haven't looked back.
- ishtu 9y ago
  Tried exactly same setup yesterday and was surprised how it just works.
- majewsky 9y ago
  I only tried a drawing tablet once for a few days (also with Krita), but I too was very surprised by how easy it is to setup everything. Basically just install the package with the Wacom driver (xf86-input-wacom on Arch Linux), restart the X server and you're good to go.
- JakiesKonto 9y ago
  same attitude but im still missing that Wacom, thx for info about linux
  - davidgerard 9y ago
    Huion are good as well, and very cheap.
    - boudewijnrempt 9y ago
      There are some problems with Huion, but they really try to work with us and we with them -- the latest drivers even fixed the rocker-switch click bug :-)
      - davidgerard 9y ago
        Huion tablets are way cheaper than Wacom of course ;-)
_Codemonkeyism 9y ago
I would like to leanr from the article, but it is low on facts (I may have overlooked them while reading). What is the relationship between Krita Foundation (Krita) and Dmitry? Is Dmitry an employee to Krita living in Russia? How can there be any VAT involved? Is Dmitry a freelancer who sends invoices to Krita? Do those invoices include VAT? If they do, why does Krita need to pay VAT to Dutch authorities? Does he have a VatID on the invoice? Do they just send money to Dmitry?
- boudewijnrempt 9y ago
  Dmitry is a freelancer who lives in Moscow, not an employee. For the kind of work Dmitry does, there is no VAT appliccable in Russia. If the Krita Foundation had been Russian, no VAT would have been applicable. There is no VAT ID on his invoices, but he does send invoices. He also keeps ownership over his work, and the Foundation doesn't tell him what to work on... But since the Krita Foundation is in the Netherlands, the tax authorities feel that the VAT is transfered to the Foundation. Like I said below... If 100% of our income had been from donations, no VAT would have been transfered. If 100% had been from sales, it would have been transfered, and then we would have claimed it back. Since it's a mixed bag, 100% is transfered, and we could only claim 15% or so back. I still don't understand the logic behind that, though...
  - _Codemonkeyism 9y ago
    Thanks!
  - KayEss 9y ago
    They think you should pay VAT on imported services? That sounds very fishy to me. I've never heard of such a thing (and I have been exporting into the EU for many years).
    - boudewijnrempt 9y ago
      Yes... It's no wonder that my first accountant never realized that this could be possible.
csomar 9y ago
I don't get it. Isn't Dmitry the guy responsible for paying the VAT for the Dutch authorities?
- boudewijnrempt 9y ago
  No, the Krita Foundation is.
- lmm 9y ago
  If they were within the EU they would be. But because Dimitry is outside the EU, whoever's importing their work from outside the EU is responsible. (This prevents avoiding VAT by having your work done outside the EU). The EU has no way to go after an outside entity, so that's how it has to be.
  - csomar 9y ago
    Maybe I'm not quite intelligent but doesn't the VAT only work in the same jurisdiction? I mean, if we are on different tax jurisdictions then VAT should not be applicable. That's, at least, how it works in my country.
    - lmm 9y ago
      What do you mean by "work"? You don't get to just not pay VAT by having the transaction take place across a border. (At least, not when that border is on the boundary of the EU).
    - bluGill 9y ago
      Right, if I (in the US) buy something from Krita that was made in Russia: Kritia needs to pay the VAT when they buy the work from Russia. Then when they ship to me they get a refund of that VAT. The sum collected is zero, but a lot of paperwork had to be done correctly to get there. A simplified explication is Krita's situation is so complex nobody in the world can figure out how to get the paperwork correct, but they are not in trouble because they didn't. Tax law doesn't care if you can figure it out how to do it right, just that you do it right.
DangerousPie 9y ago
> The Foundation was created to be able to have Dmitry work full-time on Krita. Because we sell stuff, the tax inspector has determined that we’re a company, and should have paid VAT in the Netherlands over the work Dmitry has been doing in Russia. Even though there is no VAT in Russia on the kind of work Dmitry is doing. As someone who has dealt with VAT in the EU a bit this sounds really odd to me. Even if the inspector determines that VAT needs to be charged on these services, shouldn't it be Dmitry who is paying them, not the foundation? In other words, they should be coming after the person providing the services for the VAT that he neglected to charge, not after the foundation who just paid the invoices they were given.
- vetinari 9y ago
  > Even if the inspector determines that VAT needs to be charged on these services, shouldn't it be Dmitry who is paying them, not the foundation? From the look of it, Dmitry is outside the EU, making the foundation the importer and thus responsible for the VAT.
  - DangerousPie 9y ago
    I never heard of this. Is that actually a rule in the Netherlands? I don't think/hope it is in the UK at least.
    - gcp 9y ago
      This is EU wide so it would apply to the UK, for now. Note that the rules for intra-EU B2B transfers may be different (deferred VAT).
    - deleted 9y ago
      [deleted]
    - ralfn 9y ago
      This is a rule everywhere, in every nation with any serious tax system - otherwise it is a big loop hole for everyone and no taxes at all would be collected. Example: a dutch company sells a product to dutch consumers. They have to pay VAT. However what if they setup a company in another country that first buys the products for 0.001 cents and then sells the products back for full price to the consumer. Most, if not all, countries do not apply VAT on exports. In the end it doesnt matter where it was produced. Its taxed based on where it was consumed. When an economic union such as the EU refer to an internal market they mean stuff like this. But as a result all VAT in the EU are now almost identical (or else your own producers would be tempted to move the profit to another EU country)
deleted 9y ago
[deleted]
hennsen 9y ago
Cannot be loaded and seen. Can you put your text on some public blogging service instead of a weak small server that overloads when people on hackernews actually are interested on your thing?
- lima 9y ago
  Text only Google cache: https://webcache.googleusercontent.com/search?q=cache:https://krita.org/en/item/krita-foundation-in-trouble/&num=1&strip=1&vwsrc=0 https://webcache.googleusercontent.com/search?q=cache:https:...
i6ruce 9y ago
Donated some euros. I hope they'll make some announcement if this donations helped them.
- boudewijnrempt 9y ago
  The response has been great. I cannot currently edit the website... But we've had donations worth about 1000 euros in total now.
  - dvirsky 9y ago
    While I don't personally use Krita, I've been following its development for years and really admire the work that's gone into the app. Just donated a few Euros, good luck!
amiga-workbench 9y ago
Chucked some money their way, I suggest others do too. The last thing we need is less competition for Adobe.
JakiesKonto 9y ago
software looks cool, will play around... love the idea of ur project - just donated 10 euro, hope you will be all good!
ericfrederich 9y ago
I just bought a Lenovo X1 Yoga which came with a Wacom stylus. I got it to be recognized in GIMP with pressure sensitivity. I was looking for other painting apps and forgot about Krita. I'll give it a try and see how I like it. Good for them trying to get donations directly. They might get more money through GoFundMe or having a KickStarter for v4.0 or something. Those sites would offer a little transparency in that you can see how much they've already received... but try direct donations first. Also, where is the BitCoin donation address?
contingencies 9y ago
Why not fold it and move to Bitcoin-only donations? The authorities will have nothing to chase, the problem can't re-occur, accounting will be transparent, and accountants will not be required in future. Seriously, Dutch should start a petition against their tax authorities for victimizing an open source project.
- LyndsySimon 9y ago
  > Why not fold it and move to Bitcoin-only donations? I'm a huge advocate for Bitcoin, but this is a terrible idea. They're trying to support staff and the last thing you want to do in that circumstance is to limit the potential donor pool. I also don't see how changing the currency of the problematic transactions changes the tax implications.
  - bluGill 9y ago
    In fact changing currency doesn't change tax implications if you intend to be legal. If you want to be illegal and risk not getting noticed you can hide behind bitcoin but the first auditor will notice this and report "I don't know how much, but there is tax fraud here so lets give maximum fines".
    - contingencies 9y ago
      Yes, but folding the entity means in most cases you are no longer liable for those past accounting hiccups. In future, you don't have to pay accountants, or waste time dealing with the state. Immensely practical. As far as donor pools go, if there is no way to obtain a monthly subscription from people via cryptocurrency then build it, as there is clearly demand.
- palunon 9y ago
  >The authorities will have nothing to chase, Yeah. Then the judge will tell you "Pay your taxes - then fines, etc - or we'll liquidate your corporation/foundation". If you don't pay, or give them access to the Bitcoins when they liquidate, they may hold you for contempt (or equivalent in the Netherlands). Don't think you can mess with a Nation State by simply not using the national currency. It's like wanting to evade corporate taxes by burying gold in a corn field...
sandGorgon 9y ago
Can I buy something rather than donate ? Its hard for me to donate using my company account - but very easy to buy stuff. It doesnt matter even if its a license to email you 10 times a year.
- jordigh 9y ago
  I hear this all the time with Octave too. What exactly constitutes a purchase? How can we help you fool your company into thinking that you're buying something?
  - Belphemur 9y ago
    Could you start a partnership to sell t-shirt with your logo or even simple stickers. Something that could be tracked.
    - jordigh 9y ago
      And your company will be okay with buying, say, a 500 USD sticker?
      - sandGorgon 9y ago
        Yes. This is what people don't understand. I call it "gratitude-ware". You give me an invoice, and I will pay you 500$ for a pixel on a page.
        jordigh 9y ago
        That's all you need? An invoice? I don't need to form a company or send you tax forms? I can make an invoice rather easily in LaTeX. So, can I do that? Add a note under the donation page that says, "if you need an invoice for your donation, email us here"?
        sandGorgon 9y ago
        I submit the invoice you give me to my tax authority. Depending on where in the world you are, governments do check this stuff (and share it between themselves ). I would urge you NOT to do this. Setting an invoicable entity shouldn't be hard - I'm in India and it's not hard here, and we are fairly at the bottom of the Ease of Doing Business listings . Sidekiq Pro uses Plasso - I'm sure there are tons of alternatives where I don't have to email you for an invoice
Bromskloss 9y ago
I had no idea that there even existed a foundation or that the development used money.
- babuskov 9y ago
  Maybe they should add a popup dialog that shows up every 100th time you run the program and tell users about it. Something like "Hey, you started Krita for the 200th time. Please consider donating a small amount to help the further development" and a link to the donation page.
asah 9y ago
Donated. Btw, a business model: let artists pay to enter their names in a directory of artists for hire. They can charge clients extra (eg fee) to pay for these ads. True, it would be ideal to include reviews etc but links to their portfolio are often good enough, and it further highlights the power of krita... If interested, contact me via my HN profile - I've done this before successfully, both for startups and at scale, and I don't need your money. :-)
lunchables 9y ago
I have to admit, I really respect the absolute transparency.
skywhopper 9y ago
This is a good reminder that for very small organizations, it's important for the founders themselves to understand at a basic level the relevant applicable tax laws and typical exceptions. The level of accounting consultancy a small organization is going to be able to afford is unlikely to be comprehensive, and all the right questions may not be asked when making plans. But if the founders who do know all that's going on have a basic understanding of the parameters of tax law, they will have a much better chance of figuring out what exceptions might be applicable to their organization. A few days or weeks of research early on could have saved many months of stress and many thousands of euros when the problems were discovered.
- rexreed 9y ago
  This comment is correct. People seem to rush the legal and tax implications and end up paying for it in the long-term. Legal and tax advice is inexpensive at the earliest stages and a lot of those expenses can be deferred or reduced. But this isn't the case when you're already in legal or tax jeopardy.
r1ch 9y ago
I've been thinking about creating a Dutch foundation for one of the open source projects I work on in order to provide a legal entity to collect donations and apply for services like code signing in a organization name. This makes it a whole lot scarier!
esaym 9y ago
I freaking hate tax. Especially those on the left yelling to tax the "rich" (very few are actually rich nowadays). This is the end result. Innocent companies go out of business (and then there is nothing to tax).
- golergka 9y ago
  Taxation is theft by definition, but getting rid of it altogether is a completely unrealistic endeavor. All we can hope for is reducing tax rates and educating people about "taxing the rich" (label that is usually used to advocate raising taxes on capital gains).
  - dragonwriter 9y ago
    > Taxation is theft by definition No, it's by definition not theft. Theft is the unlawful taking of property without consent of the owner; taxation is by definition done by legal authority, and, ipso facto, is not theft. Now, if you dismiss any moral status of legal authority (not merely legal authority which lacks some proper accountability, but all legal authority irrespective of accountability and structure), then, sure taxation is the moral equivalent of theft without being theft. And if you take the more moderate view that some legal authority is morally relevant, but that that depends on structure and accountability to the governed, then taxation by an improper authority is morally equivalent to theft. But, by definition, taxation is not theft.
vondur 9y ago
Donated!
valoriez 9y ago
Donated, and tweeted about it. Join me!
miscreanity 9y ago
A simple solution would be to incorporate outside of such a convoluted and destructive tax regime. There are much friendlier locations.
neves 9y ago
Maybe a little off topic. I've just learned about Krita. The birthday gift for my son was a Wacom board. How would the opinion of my fellow HR about the included software (Art Rage) compare to Krita for a 11 years old. I'm all for open source, but usability is a main issue here.
rexreed 9y ago
Could all of this have been avoided with good accounting / tax advice to begin with? I don't mean to be that person that gives 20/20 hindsight, but this is the sort of legal and tax problem that gets many startups into trouble. A lot of startups just wing it with legal and tax advice and end up paying more in the long run with tax liabilities and legal problems.
- gcp 9y ago
  Yes. They got bad advice, probably from an accountant without enough experience in this matter.
alexfisher 9y ago
Why don't they have an Ethereum, Bitcoin, or other donation address?
col_rad 9y ago
Donated 20EUR

529 points by gcp 9y ago

Chris2048 9y ago

Did the same accountant that advised them in the first place bag the 4k for cleaning up the mess?

boudewijnrempt 9y ago
Definitely not. When we got the notification, I asked Ton Roosendaal which accountant the Blender Foundation uses, and approached them. My thinking was, they at least had experience with one open source organization.
- Chris2048 9y ago
  Ah, good :-)

Jonnax 9y ago

That's really sad to hear. With how complex laws are, it's scary that going to a professional may not be sufficient. But when you're totally unfamiliar with what the requirements are what can you do? Do large law/accountancy firms give a guarantee for their advice in the case that it was incorrect?

_wmd 9y ago
No, they can be slippery as all hell. Ask a question by e-mail, expect a definitive yes/no answer, instead receive a phone call that's instantly claimed to be "off the record", and receive a parable about a nameless other customer who had this one situation this one time. Chances are the accountancy firm had never set up a charity before and has misunderstood the constraints, and chances are also high that they won't be liable for the problem caused without some long drawn out struggle.
- wila 9y ago
  True, but it is worse than that. If you call the tax office and ask them direct questions about doing business abroad then even they still give you an answer with a disclaimer that it might not be correct.
  - greenshackle2 9y ago
    My flatmate is an international sales tax expert. I helped her debug hairy tax problems a couple times - not that I have any expert knowledge of tax laws, I was mostly rubber-ducking her - it sounds like an absolute clusterfuck. Like other domains of law it's not always clear cut, it wasn't like, yeah Alice Inc. owes exactly X% taxes because of law A, it was like, we can argue that Alice Inc. owes X% based on laws A and B, C, but the tax authority could argue they owe Y% based on an argument that actually, laws B, D, and E apply to their case, which we would counter-argue with, etc., etc., etc. So I'm not surprised the tax office wouldn't give straight answers; even they may not know how a court would rule depending on the specifics of the case.
mrkrabo 9y ago
Say what you will but this is simply fraud. If they were selling stuff, they should've collected and paid the VAT for Dmitry. You are NOT a non-profit if you sell stuff. There is absolutely no complexity about this. Didn't they see anything wrong with selling stuff without collecting the VAT from every transaction? And the best part: they are now separating the sales from the foundation so they can avoid paying taxes. This is the kind of stuff HN abhors... ooops it's not Amazon, it's Krita! Then let's allow it!!!
- boudewijnrempt 9y ago
  Well, actually there is complexity. We did pay the VAT over everything we sold, of course. That was simple. What we didn't do was pay VAT in the Netherlands over the money we sent Dmitry for his work in Russia. If the Foundation had been a company, we would have had to pay that VAT in the Netherlands, but would have claimed it back -- net result, 0. If the foundation had never sold anything, so not been company-like, there wouldn't have been VAT due. Because it was a mix, the tax people wanted the full VAT paid, which could not have been reclaimed. In short: you're enough like a company that the VAT gets transfered, not enough like a company that you can claim it back. Even the accountants found that complex and disputable...
  - molszanski 9y ago
    Also, I would try going to the local tax office. Maybe yours is a friendly one (I've been to both types) and you can get to speak with a your tax area local management. They might have enough knowledge and administrative power and help you out. Human to human protocol. Been there, done that, got a t-shirt.
    - gcp 9y ago
      Maybe you should read the original article first. Just saying. They spent months, got a lawyer involved, and got the fine reduced, a bit.
      - majewsky 9y ago
pbarnes_1 9y ago
You can only ever sue a law/accounting firm for the total cost of services rendered to you in that year or whatever. Depends on the client agreement. Even then it's always a grey area where it's advice that may or may not be what you should do and it depends on your decision, blah blah blah.
roel_v 9y ago
"Do large law/accountancy firms give a guarantee for their advice in the case that it was incorrect?" Do you give a guarantee on your code, including damages?
- icebraining 9y ago
  The company I work for does, that's why we have insurance.
leksak 9y ago
One of the first things I'll do in the future when creating a company is establishing a good relationship with a reputable business lawyer and accounting firm. It's literally one of the first things I'd put money towards. Sounds like their accountant might not have been entirely on the up-and-up. As soon as I get my paycheck I'm totally donating a little. I've used Krita and enjoyed it as an alternative to when I do not have access to Photoshop. Now if only ZBrush had a top-tier alternative that would be something.

sequence7 9y ago

The link's not working for me, google text only cache: http://webcache.googleusercontent.com/search?q=cache:g-C8yv4ZnH4J:https://krita.org/en/item/krita-foundation-in-trouble/&num=1&hl=en&gl=uk&strip=1&vwsrc=0 http://webcache.googleusercontent.com/search?q=cache:g-C8yv4...

distances 9y ago
Or head to https://planet.kde.org https://planet.kde.org for an aggregated version of the full article.
binaryanomaly 9y ago
It works but is very slow.

dbrgn 9y ago

Just a quick reminder, if everyone here donates just 3-5$, the expenses will be paid in no time :) Krita is a great software, and even though I'm not an artist it's worth supporting.

sddfd 9y ago
How would I dontate? The site seems down atm.
- boudewijnrempt 9y ago
  It's very slow... The hackernews effect, I'm afraid. Internationally, paypal is easiest: just use foundation@krita.org. Otherwise, for people in the EU, our bank account is ING, BIC: INGBNL2A, IBAN: NL72INGB0007216397 .
  - laumars 9y ago
    I hope this (the "Hacker News effect") doesn't bump up your hosting costs as that's the last thing you'd need. For what it's worth, I've donated. :)
    - dom0 9y ago
      EU bank transfers are free of charge.
      - kobeya 9y ago
        He meant server hosting costs.
      - deanclatworthy 9y ago
        This is not true for every bank in every EU country.
        icebraining 9y ago

gghh 9y ago

I'd like to drop a note on how much I appreciate Krita. I'm not an artist by any mean, I'm a programmer and while I think I write/draw/sketch a lot on paper. A few months ago I switched from paper to digital hand-writing and bought an old Wacom Intuos drawing tablet. I'm on Linux and Krita works great with a stylus; very comfortable and intuitive, I haven't looked back.

ishtu 9y ago
Tried exactly same setup yesterday and was surprised how it just works.
majewsky 9y ago
I only tried a drawing tablet once for a few days (also with Krita), but I too was very surprised by how easy it is to setup everything. Basically just install the package with the Wacom driver (xf86-input-wacom on Arch Linux), restart the X server and you're good to go.
JakiesKonto 9y ago
same attitude but im still missing that Wacom, thx for info about linux
- davidgerard 9y ago
  Huion are good as well, and very cheap.
  - boudewijnrempt 9y ago
    There are some problems with Huion, but they really try to work with us and we with them -- the latest drivers even fixed the rocker-switch click bug :-)
    - davidgerard 9y ago
      Huion tablets are way cheaper than Wacom of course ;-)

_Codemonkeyism 9y ago

I would like to leanr from the article, but it is low on facts (I may have overlooked them while reading). What is the relationship between Krita Foundation (Krita) and Dmitry? Is Dmitry an employee to Krita living in Russia? How can there be any VAT involved? Is Dmitry a freelancer who sends invoices to Krita? Do those invoices include VAT? If they do, why does Krita need to pay VAT to Dutch authorities? Does he have a VatID on the invoice? Do they just send money to Dmitry?

boudewijnrempt 9y ago
Dmitry is a freelancer who lives in Moscow, not an employee. For the kind of work Dmitry does, there is no VAT appliccable in Russia. If the Krita Foundation had been Russian, no VAT would have been applicable. There is no VAT ID on his invoices, but he does send invoices. He also keeps ownership over his work, and the Foundation doesn't tell him what to work on... But since the Krita Foundation is in the Netherlands, the tax authorities feel that the VAT is transfered to the Foundation. Like I said below... If 100% of our income had been from donations, no VAT would have been transfered. If 100% had been from sales, it would have been transfered, and then we would have claimed it back. Since it's a mixed bag, 100% is transfered, and we could only claim 15% or so back. I still don't understand the logic behind that, though...
- _Codemonkeyism 9y ago
  Thanks!
- KayEss 9y ago
  They think you should pay VAT on imported services? That sounds very fishy to me. I've never heard of such a thing (and I have been exporting into the EU for many years).
  - boudewijnrempt 9y ago
    Yes... It's no wonder that my first accountant never realized that this could be possible.

csomar 9y ago

I don't get it. Isn't Dmitry the guy responsible for paying the VAT for the Dutch authorities?

boudewijnrempt 9y ago
No, the Krita Foundation is.
lmm 9y ago
If they were within the EU they would be. But because Dimitry is outside the EU, whoever's importing their work from outside the EU is responsible. (This prevents avoiding VAT by having your work done outside the EU). The EU has no way to go after an outside entity, so that's how it has to be.
- csomar 9y ago
  Maybe I'm not quite intelligent but doesn't the VAT only work in the same jurisdiction? I mean, if we are on different tax jurisdictions then VAT should not be applicable. That's, at least, how it works in my country.
  - lmm 9y ago
    What do you mean by "work"? You don't get to just not pay VAT by having the transaction take place across a border. (At least, not when that border is on the boundary of the EU).
  - bluGill 9y ago
    Right, if I (in the US) buy something from Krita that was made in Russia: Kritia needs to pay the VAT when they buy the work from Russia. Then when they ship to me they get a refund of that VAT. The sum collected is zero, but a lot of paperwork had to be done correctly to get there. A simplified explication is Krita's situation is so complex nobody in the world can figure out how to get the paperwork correct, but they are not in trouble because they didn't. Tax law doesn't care if you can figure it out how to do it right, just that you do it right.

DangerousPie 9y ago

> The Foundation was created to be able to have Dmitry work full-time on Krita. Because we sell stuff, the tax inspector has determined that we’re a company, and should have paid VAT in the Netherlands over the work Dmitry has been doing in Russia. Even though there is no VAT in Russia on the kind of work Dmitry is doing. As someone who has dealt with VAT in the EU a bit this sounds really odd to me. Even if the inspector determines that VAT needs to be charged on these services, shouldn't it be Dmitry who is paying them, not the foundation? In other words, they should be coming after the person providing the services for the VAT that he neglected to charge, not after the foundation who just paid the invoices they were given.

vetinari 9y ago
> Even if the inspector determines that VAT needs to be charged on these services, shouldn't it be Dmitry who is paying them, not the foundation? From the look of it, Dmitry is outside the EU, making the foundation the importer and thus responsible for the VAT.
- DangerousPie 9y ago
  I never heard of this. Is that actually a rule in the Netherlands? I don't think/hope it is in the UK at least.
  - gcp 9y ago
    This is EU wide so it would apply to the UK, for now. Note that the rules for intra-EU B2B transfers may be different (deferred VAT).
  - deleted 9y ago
    [deleted]
  - ralfn 9y ago
    This is a rule everywhere, in every nation with any serious tax system - otherwise it is a big loop hole for everyone and no taxes at all would be collected. Example: a dutch company sells a product to dutch consumers. They have to pay VAT. However what if they setup a company in another country that first buys the products for 0.001 cents and then sells the products back for full price to the consumer. Most, if not all, countries do not apply VAT on exports. In the end it doesnt matter where it was produced. Its taxed based on where it was consumed. When an economic union such as the EU refer to an internal market they mean stuff like this. But as a result all VAT in the EU are now almost identical (or else your own producers would be tempted to move the profit to another EU country)

deleted 9y ago

[deleted]

hennsen 9y ago

Cannot be loaded and seen. Can you put your text on some public blogging service instead of a weak small server that overloads when people on hackernews actually are interested on your thing?

lima 9y ago
Text only Google cache: https://webcache.googleusercontent.com/search?q=cache:https://krita.org/en/item/krita-foundation-in-trouble/&num=1&strip=1&vwsrc=0 https://webcache.googleusercontent.com/search?q=cache:https:...

i6ruce 9y ago

Donated some euros. I hope they'll make some announcement if this donations helped them.

boudewijnrempt 9y ago
The response has been great. I cannot currently edit the website... But we've had donations worth about 1000 euros in total now.
- dvirsky 9y ago
  While I don't personally use Krita, I've been following its development for years and really admire the work that's gone into the app. Just donated a few Euros, good luck!

amiga-workbench 9y ago

Chucked some money their way, I suggest others do too. The last thing we need is less competition for Adobe.

JakiesKonto 9y ago

software looks cool, will play around... love the idea of ur project - just donated 10 euro, hope you will be all good!

ericfrederich 9y ago

I just bought a Lenovo X1 Yoga which came with a Wacom stylus. I got it to be recognized in GIMP with pressure sensitivity. I was looking for other painting apps and forgot about Krita. I'll give it a try and see how I like it. Good for them trying to get donations directly. They might get more money through GoFundMe or having a KickStarter for v4.0 or something. Those sites would offer a little transparency in that you can see how much they've already received... but try direct donations first. Also, where is the BitCoin donation address?

contingencies 9y ago

Why not fold it and move to Bitcoin-only donations? The authorities will have nothing to chase, the problem can't re-occur, accounting will be transparent, and accountants will not be required in future. Seriously, Dutch should start a petition against their tax authorities for victimizing an open source project.

LyndsySimon 9y ago
> Why not fold it and move to Bitcoin-only donations? I'm a huge advocate for Bitcoin, but this is a terrible idea. They're trying to support staff and the last thing you want to do in that circumstance is to limit the potential donor pool. I also don't see how changing the currency of the problematic transactions changes the tax implications.
- bluGill 9y ago
  In fact changing currency doesn't change tax implications if you intend to be legal. If you want to be illegal and risk not getting noticed you can hide behind bitcoin but the first auditor will notice this and report "I don't know how much, but there is tax fraud here so lets give maximum fines".
  - contingencies 9y ago
    Yes, but folding the entity means in most cases you are no longer liable for those past accounting hiccups. In future, you don't have to pay accountants, or waste time dealing with the state. Immensely practical. As far as donor pools go, if there is no way to obtain a monthly subscription from people via cryptocurrency then build it, as there is clearly demand.
palunon 9y ago
>The authorities will have nothing to chase, Yeah. Then the judge will tell you "Pay your taxes - then fines, etc - or we'll liquidate your corporation/foundation". If you don't pay, or give them access to the Bitcoins when they liquidate, they may hold you for contempt (or equivalent in the Netherlands). Don't think you can mess with a Nation State by simply not using the national currency. It's like wanting to evade corporate taxes by burying gold in a corn field...

sandGorgon 9y ago

Can I buy something rather than donate ? Its hard for me to donate using my company account - but very easy to buy stuff. It doesnt matter even if its a license to email you 10 times a year.

jordigh 9y ago
I hear this all the time with Octave too. What exactly constitutes a purchase? How can we help you fool your company into thinking that you're buying something?
- Belphemur 9y ago
  Could you start a partnership to sell t-shirt with your logo or even simple stickers. Something that could be tracked.
  - jordigh 9y ago
    And your company will be okay with buying, say, a 500 USD sticker?
    - sandGorgon 9y ago
      Yes. This is what people don't understand. I call it "gratitude-ware". You give me an invoice, and I will pay you 500$ for a pixel on a page.
      - jordigh 9y ago
        That's all you need? An invoice? I don't need to form a company or send you tax forms? I can make an invoice rather easily in LaTeX. So, can I do that? Add a note under the donation page that says, "if you need an invoice for your donation, email us here"?
        sandGorgon 9y ago
        I submit the invoice you give me to my tax authority. Depending on where in the world you are, governments do check this stuff (and share it between themselves ). I would urge you NOT to do this. Setting an invoicable entity shouldn't be hard - I'm in India and it's not hard here, and we are fairly at the bottom of the Ease of Doing Business listings . Sidekiq Pro uses Plasso - I'm sure there are tons of alternatives where I don't have to email you for an invoice

Bromskloss 9y ago

I had no idea that there even existed a foundation or that the development used money.

babuskov 9y ago
Maybe they should add a popup dialog that shows up every 100th time you run the program and tell users about it. Something like "Hey, you started Krita for the 200th time. Please consider donating a small amount to help the further development" and a link to the donation page.

asah 9y ago

Donated. Btw, a business model: let artists pay to enter their names in a directory of artists for hire. They can charge clients extra (eg fee) to pay for these ads. True, it would be ideal to include reviews etc but links to their portfolio are often good enough, and it further highlights the power of krita... If interested, contact me via my HN profile - I've done this before successfully, both for startups and at scale, and I don't need your money. :-)

lunchables 9y ago

I have to admit, I really respect the absolute transparency.

skywhopper 9y ago

This is a good reminder that for very small organizations, it's important for the founders themselves to understand at a basic level the relevant applicable tax laws and typical exceptions. The level of accounting consultancy a small organization is going to be able to afford is unlikely to be comprehensive, and all the right questions may not be asked when making plans. But if the founders who do know all that's going on have a basic understanding of the parameters of tax law, they will have a much better chance of figuring out what exceptions might be applicable to their organization. A few days or weeks of research early on could have saved many months of stress and many thousands of euros when the problems were discovered.

rexreed 9y ago
This comment is correct. People seem to rush the legal and tax implications and end up paying for it in the long-term. Legal and tax advice is inexpensive at the earliest stages and a lot of those expenses can be deferred or reduced. But this isn't the case when you're already in legal or tax jeopardy.

r1ch 9y ago

I've been thinking about creating a Dutch foundation for one of the open source projects I work on in order to provide a legal entity to collect donations and apply for services like code signing in a organization name. This makes it a whole lot scarier!

esaym 9y ago

I freaking hate tax. Especially those on the left yelling to tax the "rich" (very few are actually rich nowadays). This is the end result. Innocent companies go out of business (and then there is nothing to tax).

golergka 9y ago
Taxation is theft by definition, but getting rid of it altogether is a completely unrealistic endeavor. All we can hope for is reducing tax rates and educating people about "taxing the rich" (label that is usually used to advocate raising taxes on capital gains).
- dragonwriter 9y ago
  > Taxation is theft by definition No, it's by definition not theft. Theft is the unlawful taking of property without consent of the owner; taxation is by definition done by legal authority, and, ipso facto, is not theft. Now, if you dismiss any moral status of legal authority (not merely legal authority which lacks some proper accountability, but all legal authority irrespective of accountability and structure), then, sure taxation is the moral equivalent of theft without being theft. And if you take the more moderate view that some legal authority is morally relevant, but that that depends on structure and accountability to the governed, then taxation by an improper authority is morally equivalent to theft. But, by definition, taxation is not theft.

vondur 9y ago

Donated!

valoriez 9y ago

Donated, and tweeted about it. Join me!

miscreanity 9y ago

A simple solution would be to incorporate outside of such a convoluted and destructive tax regime. There are much friendlier locations.

neves 9y ago

Maybe a little off topic. I've just learned about Krita. The birthday gift for my son was a Wacom board. How would the opinion of my fellow HR about the included software (Art Rage) compare to Krita for a 11 years old. I'm all for open source, but usability is a main issue here.

rexreed 9y ago

Could all of this have been avoided with good accounting / tax advice to begin with? I don't mean to be that person that gives 20/20 hindsight, but this is the sort of legal and tax problem that gets many startups into trouble. A lot of startups just wing it with legal and tax advice and end up paying more in the long run with tax liabilities and legal problems.

gcp 9y ago
Yes. They got bad advice, probably from an accountant without enough experience in this matter.

alexfisher 9y ago

Why don't they have an Ethereum, Bitcoin, or other donation address?

col_rad 9y ago

Donated 20EUR