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Here is a question I have often wondered about: Say I am running a business in Europe. And one day I need to translate some text from German to English. I go t

by TekMol 4y ago

Here is a question I have often wondered about: Say I am running a business in Europe. And one day I need to translate some text from German to English. I go to Google and enter "German to English translation service". Up comes a website that says "We translate one page of text for ₿0.000048". The website does not tell you where it is operated or who operates it. They state that where they are, they are not obliged to tell you where they are. Just send the coins (via Lightning Network) and your text will be translated. Would I be allowed to use that service? Can I deduct the expense from my taxes?

renewiltord 4y ago
Anti money laundering would get in the way, right?
DangerousPie 4y ago
Do they provide an invoice that fulfils the accounting requirements of your country? I suspect not, so you wouldn’t be able to deduct it.
- TekMol 4y ago
  Is that true? The you cannot deduct expenses in absense of an invoice? Any links to back that up? What I find around the net seems to point in the opposite direction. For example the German "Eigenbeleg": https://de.wikipedia.org/wiki/Eigenbeleg https://de.wikipedia.org/wiki/Eigenbeleg The Wikipedia page says that to deduct expenses from earnings, the expense has to be "belegt" which means "documented". But it seems the documentation does not have to be done by the seller. It seems it can also also be done by the buyer.
  - 7steps2much 4y ago
    I am not sure if it is still handled that way, but in my experience these are not supposed to be used to create new receipts, but to replace receipts that were lost or document things that occured but couldn't be put on receipts for whatever reason. While it might be possible to use them this way they might be scrutinized and the additional work of justifying them might not be worth using a service that doesn't provide receipts. Also, there is this section: > Soll die Ausgabe vom Finanzamt anerkannt werden, muss dies ein Ausnahmefall bleiben. Meaning, roughly "Even if accepted by the authorities, it is to be treated as an exception" So i assume that they would not be a fan of you trying to use this too liberally within your accounting.
deleted 4y ago
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JusticeJuice 4y ago
> Can I deduct the expense from my taxes? Slightly different in every country but in general, theres two parts to this question. The first bit is just the fact as it's an expense, it affects your business' profit, and therefore how much you're taxed on. Anything you spend money on means a lower tax bill. What your probably thinking of is GST / VAT / sales tax etc. A tax at point of sale, which consumers normally pay, but can be claimed back for business to business trade. The idea being by making b2b cheaper, economy moves faster. To work with these systems you usually need a registered business, and get a VAT/GST number.I assume this anon service isn't VAT/GST registered, as doing so would kinda defeat the point. They also, might not be collecting this tax to pay on their side anyway. So no you can't claim that back, unless they get a VAT number.
- TekMol 4y ago
  So this is a yes + yes from you. I also tend to think that I could use the service and be able to deduct the expense from my earnings. In the scenario I imagine, there is now VAT involved. The website does not even provide an invoice or anything. I can very well imagine this becoming a real scenario. At the latest when DAOs and AI are combined to provide services that completely live in the digital realm. Without any location at all.
  - JusticeJuice 4y ago
    > So this is a yes + yes from you. No - it's a yes + no. To get the VAT portion of your tax bill back/decreased back, you need to be a VAT registered business, trading with another VAT registered business, and you need invoices to prove this trade. Its not like the tax departments check every invoice, but if you got audited and you didn't have them, you'd be done for tax fraud. > I also tend to think that I could use the service and be able to deduct the expense from my earnings. That's not like a tax break to be clear, that's just not being a profitable business.
deleted 4y ago
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jermaustin1 4y ago
My accountant has always said, so long as I get a receipt/invoice that corresponds to the transaction, and the company/country isn't knowingly sanctioned, and the services rendered were licit and bonafide, its all good. This is my US-based accountant for my US-based corporation, but I'm sure it translates well.
- ejb999 4y ago
  Yep, all you really want is plausible deniability if you ever get audited - you may in fact still have a deduction not allowed by the IRS, but as long as you did it in good faith, you shouldn't be liable for any criminal offense.

by TekMol 4y ago

renewiltord 4y ago

Anti money laundering would get in the way, right?

DangerousPie 4y ago

Do they provide an invoice that fulfils the accounting requirements of your country? I suspect not, so you wouldn’t be able to deduct it.

TekMol 4y ago
Is that true? The you cannot deduct expenses in absense of an invoice? Any links to back that up? What I find around the net seems to point in the opposite direction. For example the German "Eigenbeleg": https://de.wikipedia.org/wiki/Eigenbeleg https://de.wikipedia.org/wiki/Eigenbeleg The Wikipedia page says that to deduct expenses from earnings, the expense has to be "belegt" which means "documented". But it seems the documentation does not have to be done by the seller. It seems it can also also be done by the buyer.
- 7steps2much 4y ago
  I am not sure if it is still handled that way, but in my experience these are not supposed to be used to create new receipts, but to replace receipts that were lost or document things that occured but couldn't be put on receipts for whatever reason. While it might be possible to use them this way they might be scrutinized and the additional work of justifying them might not be worth using a service that doesn't provide receipts. Also, there is this section: > Soll die Ausgabe vom Finanzamt anerkannt werden, muss dies ein Ausnahmefall bleiben. Meaning, roughly "Even if accepted by the authorities, it is to be treated as an exception" So i assume that they would not be a fan of you trying to use this too liberally within your accounting.

deleted 4y ago

[deleted]

JusticeJuice 4y ago

> Can I deduct the expense from my taxes? Slightly different in every country but in general, theres two parts to this question. The first bit is just the fact as it's an expense, it affects your business' profit, and therefore how much you're taxed on. Anything you spend money on means a lower tax bill. What your probably thinking of is GST / VAT / sales tax etc. A tax at point of sale, which consumers normally pay, but can be claimed back for business to business trade. The idea being by making b2b cheaper, economy moves faster. To work with these systems you usually need a registered business, and get a VAT/GST number.I assume this anon service isn't VAT/GST registered, as doing so would kinda defeat the point. They also, might not be collecting this tax to pay on their side anyway. So no you can't claim that back, unless they get a VAT number.

TekMol 4y ago
So this is a yes + yes from you. I also tend to think that I could use the service and be able to deduct the expense from my earnings. In the scenario I imagine, there is now VAT involved. The website does not even provide an invoice or anything. I can very well imagine this becoming a real scenario. At the latest when DAOs and AI are combined to provide services that completely live in the digital realm. Without any location at all.
- JusticeJuice 4y ago
  > So this is a yes + yes from you. No - it's a yes + no. To get the VAT portion of your tax bill back/decreased back, you need to be a VAT registered business, trading with another VAT registered business, and you need invoices to prove this trade. Its not like the tax departments check every invoice, but if you got audited and you didn't have them, you'd be done for tax fraud. > I also tend to think that I could use the service and be able to deduct the expense from my earnings. That's not like a tax break to be clear, that's just not being a profitable business.

deleted 4y ago

[deleted]

jermaustin1 4y ago

My accountant has always said, so long as I get a receipt/invoice that corresponds to the transaction, and the company/country isn't knowingly sanctioned, and the services rendered were licit and bonafide, its all good. This is my US-based accountant for my US-based corporation, but I'm sure it translates well.

ejb999 4y ago
Yep, all you really want is plausible deniability if you ever get audited - you may in fact still have a deduction not allowed by the IRS, but as long as you did it in good faith, you shouldn't be liable for any criminal offense.