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Twitter Blue breaks EU consumer law by showing prices without tax
- thejackgoode 4y ago.. as does Zoom, Patreon and any number of US based companies
- demetrius 4y agoI'm pretty sure Patreon takes care of EU VAT: https://support.patreon.com/hc/en-us/articles/205259549-How-VAT-works-for-creators-on-Patreon https://support.patreon.com/hc/en-us/articles/205259549-How-... I'm not sure about Zoom, but since their FAQ includes info on EU VAT, I assume they have taken care of it, too: https://support.zoom.us/hc/en-us/articles/360021487812-EU-VAT https://support.zoom.us/hc/en-us/articles/360021487812-EU-VA...
- kdps 4y agoZoom charges VAT based on the local country (or based on the VAT number if you are a company and provide one)
- Hamcha 4y agoPatreon shows VAT and total price in the checkout page, I've yet to use a service that didn't. (EU person here)
- Havoc 4y agoThat must surely be willful? Seems hard to believe a company operating on a global scale wasn't aware of EU 101...
- continuational 4y agoOpenAI seems to do that as well. Says ChatGPT+ costs 20 when it's actually 25.
- KeplerBoy 4y agoThat's the thing. It's not 25€ everywhere, as VAT depends on the country.
- continuational 4y agoYes, you're supposed (and I think required?) to show the price including local VAT, based on the location of the user.
- nprateem 4y agoI wonder if they can go after AirBnB and all manner of other sites that hide service fees, etc. until the checkout page too.
- alborzb 4y agoAirbnb does show full fees when showing prices on search pages in certain locations in Europe (and also Australia too).
- therealmarv 4y agoTo be fair: Many companies do not respect that. I've also seen European based companies doing the same thing many times. It's also a little frustrating (for small companies) if you sell across the whole EU single market (and also beyond like e.g. UK and many other countries) and have a very dynamic price frontend depending on user's country detection. Btw. does anybody know if I can sell with fixed pricing for whole EU and cut my profit dynamically depending on user's country VAT rate? E.g. I charge 10 EUR for everyone in EU but I deduct 19% VAT in the backend for Germany, 21% for Spain etc. and basically make a little more profit with a German customer ?
- BrentOzar 4y ago> can sell with fixed pricing for whole EU and cut my profit dynamically depending on user's country VAT Technically, yes - some selling platforms like Teachable give you that option. You (they) still have to break out the correct VAT on the inside and receipt to the customer, but this approach just lets you delay calculating VAT until after they've put in their country during the checkout process, while still keeping the same apparent price to the end user.
- therealmarv 4y agoSweet, thanks for the answer. Yes I know the right VAT has to be detected/chosen/calculated at the very end with right receipt but at least the more static frontend and more fixed charging does not violate EU laws.
- LightBug1 4y ago"To be fair: I'll break a law I don't respect". Got it.
- therealmarv 4y agoNever said that. Everyone should respect and follow it (and it seems it's not enforced across many international companies). But this law is not without its practical problems for selling digital services B2C on the Internet across EU. The article leaves the impression as if only Twitter doing it which is clearly not the case here.
- orwin 4y agoI do not care for small companies. If foundry VTT do not show prices with tax included, and that's fine. It's a niche product without a ton of money. I'd be cross if Steam did the same.
- rlt 4y agoSurely there are more interesting/important things to write about than minor violations of EU law, but gotta harvest those anti-Twitter clicks I suppose.
- TimPC 4y agoThis is more than minor. After not displaying the taxes properly which is already against the law at checkout they aren’t charging the correct VAT including charging 20% in a country with 19% VAT according to the article.
- DANmode 4y agoProbability this simply turns into a weeks-long debate (of course, ON Twitter) about whether or not the tax structure is too difficult for even large firms to easily comply with?
- Xylakant 4y agoFun thing: there are a few, easy to integrate services that will give you all the information you need to remain compliant. You just need to integrate them in your checkout workflow - and then actually report the taxes and pay, which is the much more onerous part.
- justsomehnguy 4y agoWhich is solved everywhere, except US, by showing the end price to the customer and eating/calculating the taxes "under the hood".
- Macha 4y agoUS companies need to comply with an even more complicated tax structure (due to the existence of state and city taxes). The only difference with the EU is they need to show it in the upfront price, rather than only in the final billed price.
- AlecSchueler 4y agoEnough people found it interesting for it to be written about, get published, then get voted to the front page of Hacker News for discussion.
- l5870uoo9y 4y agoTwitter breaks EU agency's rules for its latest product and gets free publicity in return. Wonder to what extend this is deliberately practiced by companies?
- Macha 4y agoI know there's the common view that "any publicity is good publicity" but I struggle to think who would view this article while unaware twitter and twitter blue are things.
- t2hrow 4y ago[flagged]
- lclc 4y agoAbolish VAT. It's an anti-social tax, targeting the poor and making business for small businesses more bureaucratic and more expensive.
- vmilner 4y agoI’ve never understood why left leaning governments don’t get rid of it. Or why the EU is so pro it.
- sokoloff 4y agoA sales tax of any form has the property of catching and taxing almost all economic activity. That’s a major advantage to fund government spending. This broad taxation is bad when it taxes staple food items. It is good when it taxes spending sourced from the underground economy. If you want to cover for the first case, I’d rather see us give direct cash transfers to the poor and then let them (and everyone else) pay the tax.
- cinntaile 4y agoYou pay tax based on your consumption, it makes a lot more sense than paying income tax if you ask me...
- masklinn 4y agoIt’s a highly regressive taxation scheme putting the burden on those who can east afford it: the lower your discretionary income compared to disposable income, the more you sink into VAT.
- Macha 4y agoThe EU doesn't mandate any rate of VAT, just how it gets applied if you do have it. Governments are free to exempt classes of goods from VAT (except on the basis of national origin, as that would go against the EU free trade rules), and could even set the headline rate to 0 if they wanted.
- 4y ago
- lapcat 4y agoThere are only ~290K Twitter Blue subscribers in the whole world, ~110K outside the US. https://www.engadget.com/twitter-180000-paying-subscribers-us-mid-january-075214783.html https://www.engadget.com/twitter-180000-paying-subscribers-u... You could say that Twitter Blue is a "small business" in Europe.
- Xylakant 4y agoSmall business or not doesn’t matter here. Twitter blue does charge VAT, they just don’t include it in the sticker price they show up at the beginning of the sales process. The law stipulates that consumer prices must be advertised with VAT included, small business or not.
- Macha 4y agoNice try, but no. The EU is much stricter on attempted word games than the US. Otherwise we could subdivide businesses up arbitrarily, imagine a hardware store chain claiming their M3 screw line is a small business and therefore deserving of more lenient treatment.
- lapcat 4y ago> Nice try, but no. I wasn't trying anything, except perhaps a joke. But seriously, this may be why the EU hasn't prioritized the issue.
- mgbmtl 4y agoAre there any good resources to understanding VAT as a non-EU company? So many resources out there just want to sell their VAT-related services or assume we're a megacorp, but I've never had an EU client complain that we're not charging VAT (small shop, b2b only). edit: thank you for the responses!
- riffraff 4y agoSelling services B2B cross border should not charge vat, so you should be good. https://europa.eu/youreurope/business/taxation/vat/cross-border-vat/index_en.htm#outsidetheeusellservices-1 https://europa.eu/youreurope/business/taxation/vat/cross-bor...
- masklinn 4y ago> b2b only That’s be why. Only the retailer charges VAT, though you may want to be really sure you’re only dealing with companies (ianal and ianac, no idea how case law handles individual padding themselves as companies).
- Thlom 4y agoWhen a business buy anything from a foreign seller they should buy it without VAT and calculate and pay VAT on their own.
- vacooom 4y agoI don't have a good resource that summarizes the various rules, but high-level this is the mechanism: For B2B: 1. If the seller is extra-EU, and the buyer in EU, no VAT is charged 2. If the seller is in one EU country, and the buyer is in a different EU country, no VAT is charged by the seller, but the buyer has to do a "VAT reverse charge" (it still nets to 0€ paid, but there is extra paperwork involved) 3. If the seller and the buyer are in the same EU country, they charge the regular VAT rate For B2C things are a lot more complicated for cross-border transactions, and there is a difference between selling goods and services. For digital goods, as a seller, you would need to charge the VAT of the country of the _buyer_, and gather two pieces of evidence about the country the buyer resides in, then remit the taxes through the VAT MOSS system. Not fun. That's why Paddle & co are popular.
- zoklet-enjoyer 4y agoHaha so what? If I ran an online business I wouldn't attempt compliance with foreign laws
- jacquesm 4y agoThat's why you're not running an online business.
- zoklet-enjoyer 4y agoThat's not why. I did run an online business many years ago and disregarded laws in other countries. Not my country, not my problem.
- jacquesm 4y agoPeriodic reminder not to take legal advice from HN.
- joaonmatos 4y agoIt’s okay if you don’t want to change your frontend for a foreign country, you just can’t do B2C business with a market of half a billion people :)
- flappyeagle 4y agoWhy are we all cops now? I see no hackers here.