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> Note that this only affects you (potentially) if you offer services or goods at certain tiers, This affects everyone who has sponsor tiers as effectively all

> Note that this only affects you (potentially) if you offer services or goods at certain tiers, This affects everyone who has sponsor tiers as effectively all sponsor tiers come down to a trade: You sponsor me (e.g. pay me) and I give you something in return (e.g. mention somewhere, a sticker, support, etc.). It also affects GitHub because they will very unlikely be able to argue that they are just payment processors with the current way it's implemented. Additionally it's even worse than what the tweet suggests, because VAT rules are different for digital services and physical goods in most countries in the world. So if you give someone something physical in return (e.g. stickers, coffee mug, some merch, etc.) for a sponsorship then you must distinguish your VAT collection for sponsors who only get a digital service in return and those who get a physical good in return. It's a real bloody mess and VAT is the worst bureaucratic nightmare to digital businesses. Nonetheless, no excuse for a huge corporation like Microsoft to blatantly violate tax laws which they are very well aware of. > Honestly, VAT is one of the most puzzling aspects of trying to do any trade with people/entities in Europe, and unless you use some service that handles the accounting for you, it's impossibly hard to figure it out all on your own. True, but it's beyond Europe. VAT applies in the country where the customer lives which means you also have to deal with VAT rules for South African customers and many others and not just EU or UK.

thu2111 6y ago
VAT used to be much easier in Europe because you were charged VAT in your home country, not the country of the customer. That's far easier to establish and means you're dealing with your local government in your native language. The EU Commission forcibly changed this some years ago to the present system which is drastically more complicated, where you have to figure out where your customer is. There are even special rules for things like people who buy things whilst on cruise ships. Then you have to submit VAT returns to every single country where you have customers, and those countries are under no obligation to make it easy, for instance, they usually only offer tax returns in their own language. Because this is impossible to comply with without enormous numbers of staff, there's now a whole industry of tax middlemen who do it for you. Thus selling to the EU is a nightmare of overheads and costs. It doesn't have to be this way because it never used to be that way, but the EU is ideologically committed to the socialist notion that tax competition is harmful and should be eliminated.

thu2111 6y ago

VAT used to be much easier in Europe because you were charged VAT in your home country, not the country of the customer. That's far easier to establish and means you're dealing with your local government in your native language. The EU Commission forcibly changed this some years ago to the present system which is drastically more complicated, where you have to figure out where your customer is. There are even special rules for things like people who buy things whilst on cruise ships. Then you have to submit VAT returns to every single country where you have customers, and those countries are under no obligation to make it easy, for instance, they usually only offer tax returns in their own language. Because this is impossible to comply with without enormous numbers of staff, there's now a whole industry of tax middlemen who do it for you. Thus selling to the EU is a nightmare of overheads and costs. It doesn't have to be this way because it never used to be that way, but the EU is ideologically committed to the socialist notion that tax competition is harmful and should be eliminated.