7 ms·

He's Belgian. Belgian taxes are awful. If you want to accept 'donations' for software, you have to be self-employed. This comes with a boatload of hassle, inclu

He's Belgian. Belgian taxes are awful. If you want to accept 'donations' for software, you have to be self-employed. This comes with a boatload of hassle, including paying national insurance contributions of 20%. (which are calculated based on your income from three years ago). And given that the man has a day job, he'd also be looking at a 50% tax rate for these donations. So a 100eur donation would net about 40eur and a bunch of paperwork. Not worth the hassle unless we'rw talking at least thousands a year.

Kirth 8y ago
And if you are unlucky (Belgian IT salaries aren't that great compared to the rest of Western Europe) you gets bumped a tax class, possibly making those donations a net loss.
- patd 8y ago
  This loss concept is just a myth: the new tax rate only applies to the amount above X. If you're at the edge of the 45% rate, the extra 100€ will be taxed at 50%, but the amount you earned previously will not be impacted and still be taxed as before.
- Insanity 8y ago
  Being a software engineer in Flanders (the Belgian region the article author is from) I can tell you that this is a misconception. Our taxes in Belgium are high, the salaries for engineers are well above average. In pratice, it's possible to end up in different tax 'scales', but they'll not end up in a net loss. I'm also hugely in favour of the system here. Health care is a non-issue. I need prescription glasses (dioptry -8.5) and I pay nothing for those. Yearly dentist appointment? about 20 euro you end up paying after the 'mutualiteit' pays you back. Similar for doctors appointments or hospital appointments. Being married with a Mexican (family living in the US) I can tell you that I hugely prefer our system over the US or Mexican system.
carlmr 8y ago
Same reason I have I not collected any OS bounties. Not worth the hassle for a meager $100. I'd maybe look into it at $1000+, but most bounties aren't really anything close to making it worth your while if you have a job.
AnaniasAnanas 8y ago
This is one of the few situations where cryptocurrencies come in handy.
- kurtisc 8y ago
  Money laundering?
  - gjm11 8y ago
    It's tax evasion, not money laundering. The two are quite different things. Tax evasion: You get some money. (Legally or not; the tax system doesn't care.) You are supposed to pay taxes on it but don't want to. You find a way not to, e.g. by hiding the income from the tax authorities. Money laundering: You get some money by illegal means (theft, blackmail, whatever). You want to be able to use the money without having the authorities notice it, get suspicious about where it came from, and discover your crime. You find a way to pass the money from place to place so that by the time you actually do anything that might be noticed, it's difficult or impossible to trace it back to anything illegal. [EDITED to add:] Also different from both: tax _avoidance_. You get some money. You don't want to pay taxes on it. It turns out that the law actually allows you not to, and you take advantage of that. But this feature of the law is unintended, or blatantly unfair, or clearly the way it is because of someone lobbying on behalf of people in situations like yours.
    - dickeytk 8y ago
      Yes, and usually when someone launders money the goal is _to_ pay tax on it. That way it looks like legitimate income.
    - tim333 8y ago
      Tax avoidance doesn't have to be unintended or unfair. You can avoid income tax in the UK for example by investing in official schemes like SEIS. Or in this case he could accept crypto but forward it to charity and argue the money was not his but customer charity donations.
notimetorelax 8y ago
This looks like a total failure of the tax system.
amelius 8y ago
Can't he just sell overpriced buttons/stickers/tshirts (or even virtual goods) instead, to circumvent this?
- eloisant 8y ago
  That's pretty much the same. Any money you get has to come through a company, so either you're an employee either you have your own company (even you're alone in it).
okso 8y ago
At the highest level of taxes (>38 080€), in Belgium 100€ would result in a net of: - ~37€ if the self-employment is not subject to VAT (less than 25.000€ per year as self-employed) - ~30.7€ if subject to VAT (100€ / 1.21) [VAT] * (1 - 0.21) [Social contributions] * (1 - 0.53) [Federal tax 50% + local tax 50% * 6%]
- Tharkun 8y ago
  Good news: social contributions are 20.5% for 2019, not 21% :-)

Kirth 8y ago

And if you are unlucky (Belgian IT salaries aren't that great compared to the rest of Western Europe) you gets bumped a tax class, possibly making those donations a net loss.

patd 8y ago
This loss concept is just a myth: the new tax rate only applies to the amount above X. If you're at the edge of the 45% rate, the extra 100€ will be taxed at 50%, but the amount you earned previously will not be impacted and still be taxed as before.
Insanity 8y ago
Being a software engineer in Flanders (the Belgian region the article author is from) I can tell you that this is a misconception. Our taxes in Belgium are high, the salaries for engineers are well above average. In pratice, it's possible to end up in different tax 'scales', but they'll not end up in a net loss. I'm also hugely in favour of the system here. Health care is a non-issue. I need prescription glasses (dioptry -8.5) and I pay nothing for those. Yearly dentist appointment? about 20 euro you end up paying after the 'mutualiteit' pays you back. Similar for doctors appointments or hospital appointments. Being married with a Mexican (family living in the US) I can tell you that I hugely prefer our system over the US or Mexican system.

carlmr 8y ago

Same reason I have I not collected any OS bounties. Not worth the hassle for a meager $100. I'd maybe look into it at $1000+, but most bounties aren't really anything close to making it worth your while if you have a job.

AnaniasAnanas 8y ago

This is one of the few situations where cryptocurrencies come in handy.

kurtisc 8y ago
Money laundering?
- gjm11 8y ago
  It's tax evasion, not money laundering. The two are quite different things. Tax evasion: You get some money. (Legally or not; the tax system doesn't care.) You are supposed to pay taxes on it but don't want to. You find a way not to, e.g. by hiding the income from the tax authorities. Money laundering: You get some money by illegal means (theft, blackmail, whatever). You want to be able to use the money without having the authorities notice it, get suspicious about where it came from, and discover your crime. You find a way to pass the money from place to place so that by the time you actually do anything that might be noticed, it's difficult or impossible to trace it back to anything illegal. [EDITED to add:] Also different from both: tax _avoidance_. You get some money. You don't want to pay taxes on it. It turns out that the law actually allows you not to, and you take advantage of that. But this feature of the law is unintended, or blatantly unfair, or clearly the way it is because of someone lobbying on behalf of people in situations like yours.
  - dickeytk 8y ago
    Yes, and usually when someone launders money the goal is _to_ pay tax on it. That way it looks like legitimate income.
  - tim333 8y ago
    Tax avoidance doesn't have to be unintended or unfair. You can avoid income tax in the UK for example by investing in official schemes like SEIS. Or in this case he could accept crypto but forward it to charity and argue the money was not his but customer charity donations.

notimetorelax 8y ago

This looks like a total failure of the tax system.

amelius 8y ago

Can't he just sell overpriced buttons/stickers/tshirts (or even virtual goods) instead, to circumvent this?

eloisant 8y ago
That's pretty much the same. Any money you get has to come through a company, so either you're an employee either you have your own company (even you're alone in it).

okso 8y ago

At the highest level of taxes (>38 080€), in Belgium 100€ would result in a net of: - ~37€ if the self-employment is not subject to VAT (less than 25.000€ per year as self-employed) - ~30.7€ if subject to VAT (100€ / 1.21) [VAT] * (1 - 0.21) [Social contributions] * (1 - 0.53) [Federal tax 50% + local tax 50% * 6%]

Tharkun 8y ago
Good news: social contributions are 20.5% for 2019, not 21% :-)