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Spanish government limits crowdfunding to € 1M, donations capped at € 3000.
- letzjuc 13y agoAnyone knows why anyone would impose these limits to crowdfunding?
- ArenaSource 13y agoTo protect the interests of traditional and powerful companies: Banks
- Jacqued 13y agoWe are in talks to have the same kinds of limits in France. I don't know about Spain but here it is essentially a need for people in charge of the "digital economy" to somehow feel useful and show that they are "regulating" something. In this case they must feel more justified because it circumvents traditional actors (i.e. banks) and involves money. It is kind of amusing because this is a sector where most EU countries enjoyed a more liberal regulatory context before startups started to spawn in the US. And now that there is a boom, regulations are added to prevent it from developing, effectively removing any possible european competition to US companies in the space. I don't know if this will affect the likes of Kickstarter though, if they don't have any physical presence in Spain I don't see how the government is going to know about it.
- coldtea 13y ago>I don't know if this will affect the likes of Kickstarter though, if they don't have any physical presence in Spain I don't see how the government is going to know about it. Well, obviously they will known when you receive your funds for your project, else you will be tax avading if you don't report it.
- Jacqued 13y agoI was thinking of the backers. Obviously if you are in need of a significant crowdfunding campaign you'll probably have to relocate to a friendlier place in the EU, at least temporarily (I guess if you are looking for more than 1M euros it might be worth it).
- coldtea 13y ago>I was thinking of the backers. I don't think they care about the backers.
- johnchristopher 13y agoAre you implying the government sees funding money as taxable ? If so, on what basis ? Incomes ?
- gambiting 13y agoTo be honest, in EU most things are taxable. Most EU countries will tax you on your lottery winnings, which to me is just weird and unacceptable,but this is how things work here.
- DanBC 13y agoThe trick is to know when the tax needs to be paid and what it needs to be paid on. This is why accountants are important. They know the system and paperwork and words; they know how you can pay tax in one form cheaper and later instead of expensive and now. I don't think UK taxes lottery winnings.
- polymatter 13y agolink showing DanBC is indeed correct (http://www.national-lottery.co.uk/player/p/help/playinginstore/faqs.ftl http://www.national-lottery.co.uk/player/p/help/playinginsto...) though UK lottery winnings will still be taken into account for inheritance tax if the winner dies within 7 years.
- ArenaSource 13y agothat's for parents safety
- gambiting 13y agoYeah I know UK doesn't, that's why I said "most" EU countries, and not all of them.
- nknighthb 13y agoI believe you've got it backwards. The EU countries that don't tax lottery winnings are actually members of a pretty small club. Most of the world does tax lottery winnings.
- adnam 13y agoTo prevent fiscal fraud. Spanish government has a big problem with people not paying tax (partially because the tax rules in some cases are completely absurd).
- im_dario 13y ago70% of Spanish fiscal fraud is from rich people and corporations. To regulate crowdfunding because of fiscal fraud is pure bullshit. The biggest fraudsters aren't the usual target of crowdfunding campaigns (lots of small contributions).
- antr 13y agoI'd love to see the details of those stats - can you point me to the source where it gives the 70% figure?
- fasouto 13y agohttp://www.gestha.es/?seccion=actualidad&num=221 http://www.gestha.es/?seccion=actualidad&num=221
- antr 13y agoI quite don't understand the article. Does 70% refer to the number of infractions or the total monetary volume of fiscal fraud? If this is a volume number, is this the case "80/20" rule where 80% of fiscal fraud volume originates from a small fraction of the wealthy? This is an article, but can't find the report. Is there a report one can download? Or is it just an opinion piece?
- im_dario 13y agoAs long as I know, it refers to the total monetary volume of fiscal fraud. It would be a "80/20" rule case but this is not the point. The point is that this government rules with a twisted logic. They assume the biggest fraction of population originates the biggest fraction of fraud. For them, everything is low and middle classes' fault.
- antr 13y agoIn the past 5-10 years there have been several scandals regarding investment instruments: the sale by banks of shady stocks, the sale "guaranteed capital preservation" funds which ended up not being guaranteed (read Lehman Brothers instruments), "investment" firms offering investment in collectables (stamps, art, etc) which ended up being ponzi schemes, etc. In the past, people who have been hit by these scandals go to the government/financial regulator to claim their losses. If the government doesn't cover X% there tends to be a big backlash from left wing media and politicians. All the government is doing is hedging their potential future loss in case some of these crowdfunding campaigns end up being "scams". Spain is very much a country that likes socialise private capital losses.
- Joeri 13y agoTo protect investors in a crowd funding campaign. Crowdfunding could be used as an instrument to avoid liability to investors. Limiting it limits the potential for fraudulent crowd funding campaigns. Also: taxes
- logicchains 13y agoSeems like a great opportunity for Bitcoin, if Bitcoin can overcome the many other hurdles it faces: anonymous crowdfunding, capable of circumventing ridiculous laws like this.
- logicallee 13y ago"capable of circumventing ridiculous laws like this" Dude, by definition you are arguing that it's great for criminal uses.
- eyko 13y agoWhen a law is ridiculous, the term legal is meaningless.
- maninalift 13y agoNo it's not It's meaning is quite clear. That's not to say you can't argue that it should be ignored but please have a grown-up argument about it rather than resorting to rhetoric.
- nirnira 13y agoIf by criminal you mean "in contravention of that which is decreed by state governments" then I think we should all be delighted that Bit/altcoins have such potential. It's about time the human race threw off the shackles of these by and large corrupt, wasteful, self-annointed states.
- _delirium 13y agoThe Sex Pistols as political philosophy!
- nirnira 13y agoLess philosophy, more inevitability really. As cryptocurrencies grow the power of governments to tax will diminish. I think it'll be similar to music and movie piracy - they will be simply used so widely that it will be impossible to fight. Embattled governments will turn to deflation and increase the tax burden on those who continue to use state currencies, increasing even further the incentive to switch to cryptocurrencies. With only worthless fiat to pay armies and bureaucrats, governments may well collapse. What comes next I have no idea.
- qwerta 13y agoI have legal question: If there is campaign organized on Kickstarter or similar site, who is legal entity responsible for the campaign? This services usually collect the money and do not pass it until some conditions are met. We could argue that recipient is just subcontractor hired by Kickstarter.
- brazzy 13y agoIf there is one thing that a crowdfunding platform will hire lawyers for, it is to make absolutely certain that there is no possibility of them having any sort of legal responsibility after they hand over the money to a project creator.
- iamwithnail 13y agoDepends on the T&C of the platform. I worked at a platform, and our legals were very clear (and very cleverly constructed) to create a legal dependency from donor to project owner. We were just the marketplace, all liability for carrying out the project was on the project owner, and could (only) be enforced by the donor.
- qwerta 13y agoLegal responsibility for finishing the project and tax accountability could be separated. Anyway this is going to be just another accountancy nightmare.
- deleted 13y ago[deleted]
- omegant 13y agoSpaniard here. In Spain you have to look at the law in two ways (due to their stupid nature and that they are created following the interests of powerful people): First you look at the law and see the legal holes in it (usually huge holes). Then you see how to directly avoid the law due to the poor enforcement when there is a direct violation. For your question you need to apply both, most hacienda inspectors (spanish IRS) will be clueless of that kind of tactics for years. They usually only "learn" after a hole has been open for years or has been used by too much people. I guess that in most countries people try to do this in a way or another. But in Spain some laws are so stupid that you have no option but to avoid them..
- ArenaSource 13y agoFor a spaniard it's going to be much more easy to create a company in UK and launch the crowdfunding project with the UK company, and then, move the money by the traditional ways (dividends, getting services from a spanish based company, ...). You are not going to avoid taxed but get rid of those stupid limits and obligations.
- muyuu 13y agoNo need to use the future tense. For a long time it has been a lot easier and cheaper for a Spaniard to open a business in the UK than in his own country.
- riffraff 13y agoas an italian and fellow southern european, this has been true for a long time here too. So now they added a new 20% tax on private bank transfers from UK bank accounts to italian ones. Just saying: be wary if your government gets inspired.
- kybernetyk 13y agoThis is even true for Germany. To form a GmbH here you need to invest at least 25.000 Euros and wait weeks until the paper work gets done. In the UK you can get a Ltd. up and running within 24 Hours for what is essentially pocket change. The UK has exceptionally friendly laws and regulations concerning doing business and I wish more European countries would imitate them.
- Luc 13y ago> This is even true for Germany. To form a GmbH here you need to invest at least 25.000 Euros and wait weeks until the paper work gets done. You only need to pay in half of that though (until your GmbH goes bust with debts, that is). And since 2008 there's a mini-GmbH for 1 euro: https://de.wikipedia.org/wiki/Unternehmergesellschaft_%28haftungsbeschr%C3%A4nkt%29 https://de.wikipedia.org/wiki/Unternehmergesellschaft_%28haf...
- tehwalrus 13y agoHmm, this sounds like the sort of regulation that should be considered, and then not applied (i.e. make a law that prohibits these regulations), at an EU level, to protect Europe's collective interest in getting crowdfunding for its projects.
- frankblizzard 13y agoSeriously, Spain being in an economic crisis since so long, they should work on making it more attractive for people to open and run their business there instead of adding new regulations and complicating things for founders.
- akumen 13y agoThat would be logical. However, this is not how things works here in Spain.
- omegant 13y agoAll the new labor and economic laws created after the crisis have been done thinking in the interest of big corporations and banks. If you are a small entrepreneur you are basically screwed.. No that they don't help you, they are actively trying to make you go bankrupt even before beginning. In this case if you have a project that can go beyond 1mill € (I can't think of any that could reach that quantity, but that's another question), you'll have to be creative and create a company in the UK or USA to manage it. Reading the article I realize that what they are trying to do with the new law (that basically makes the crowd-founding unusable for startups), is to protect the small investor. We've had several small investors scams (one of them by Caja Madrid, a big savings bank), in all the cases, the regulators were accused of being too little involved. I have to agree that is a matter of time before there is a big scam with crowd-founding in Spain. So the Spanish bureaucratic logic says you'd better punish all of them(those dangerous crowd-founders) before a notorious crime is committed. Sad Edit: added the last paragraph. Edit2: readability and typos.
- joaquindev 13y agoI'm born and breed in Spain and I couldn't agree more with im_dario23 talking about the 70% and ArenaSource talking about protecting banks. In my honest opinion, banks get too much protection in Spain (compared to countries of northern Europe, which act in a more ethical way thinking more about the citizen) and this smells like a new way for banks to kind of "take some profit from crowdfounding". It seems that no sooner did the Spanish government realize about the money from crowdfounding, they tried to made up a tax/limitation for it (the thing itself shows how out-of-date Spanish politicians are... that they try to create this limit now when crowfounding it's been out there for some years now). That's so spaniard... but this is just my opinion. I'd like to read more about yours and your regulations all over the world. Great page news.ycombinator. Regards from Spain
- eLobato 13y agoThe same bill mentions new crowdfunding platforms must have: - At least € 50000 on capital stock - A civil liability insurance that covers up to € 150000 per year. Also individual donors must not donate: - More than a total of € 6000 per year on crowdfunding projects - More than € 3000 per year on a single crowdfunding project Funnily enough, political parties in spain can: - Get donations from individuals for up to € 100.000 yearly. - Foundations or associations owned by political parties (think tanks) can receive limitless donations.
- nirnira 13y agoGovernments like this should just fuck off and let people take their own risks. Jesus. If you're worried about people getting ripped off, why don't you just run a campaign giving advice on how to choose to spot scams? Why not treat people intelligently? Oh no, sorry, something scary and different that you don't understand? Kill it! Old dinosaurs.
- gtirloni 13y agoBecause most of that people will come running to the government institutions when they get ripped off, will complain in the newspapers that the government has allowed this to continue for far too long, etc, etc, etc. To follow HN's mandatory analogy policy, it's like when PCs had too many options and users were shooting themselves in the foot and then Apple came along and simplified things by removing those options. Some are mad to this day, others love how they aren't caught in difficult situations.
- aragot 13y agoIn your analogy, there's still competition between Linux and Apple. It's not like a designers union passed a law that no more than 3 parameters per app should be available to users.
- _delirium 13y agoWithin Schengen, there is increasingly competition between governments, too. You can choose anything from a big-government state like Sweden to a small-government state like Latvia, and differences on many other axes as well. Especially true in tech, where things are getting pretty integrated and mobile (and converging on English as the lingua franca).
- pasiaj 13y agoThe problematic part for the big-government states is that there is nothing preventing the Swede from going to government paid school & university in Sweden, making his millions in Latvia and retiring to Spain while still getting his Swedish government pension.
- rainmaking 13y ago... because you just can't trust income that's not silver bullion and was not preceded by genocide.
- rainmaking 13y agoBrain drain has come so far in Spain it is now self-reinforcing.
- kaoD 13y agoBeware! Spanish government wants to limit real crowdfunding, i.e., equity crowdfunding, not Kickstarter-like funding. Not that it changes the story a lot, but I just wanted to make that clear.