4 ms·

Anyone knows why anyone would impose these limits to crowdfunding?

by letzjuc 13y ago

ArenaSource 13y ago
To protect the interests of traditional and powerful companies: Banks
Jacqued 13y ago
We 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 ago
    I 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 ago
  Are you implying the government sees funding money as taxable ? If so, on what basis ? Incomes ?
  - gambiting 13y ago
    To 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 ago
      The 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 ago
        link 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 ago
        that's for parents safety
      - gambiting 13y ago
        Yeah I know UK doesn't, that's why I said "most" EU countries, and not all of them.
    - nknighthb 13y ago
      I 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 ago
To 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 ago
  70% 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 ago
    I'd love to see the details of those stats - can you point me to the source where it gives the 70% figure?
    - fasouto 13y ago
      http://www.gestha.es/?seccion=actualidad&num=221 http://www.gestha.es/?seccion=actualidad&num=221
      - antr 13y ago
        I 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 ago
        As 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 ago
In 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 ago
To 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

Anyone knows why anyone would impose these limits to crowdfunding?

by letzjuc 13y ago

Anyone knows why anyone would impose these limits to crowdfunding?

ArenaSource 13y ago

To protect the interests of traditional and powerful companies: Banks

Jacqued 13y ago

We 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 ago
  I 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 ago
Are you implying the government sees funding money as taxable ? If so, on what basis ? Incomes ?
- gambiting 13y ago
  To 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 ago
    The 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 ago
      link 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 ago
        that's for parents safety
    - gambiting 13y ago
      Yeah I know UK doesn't, that's why I said "most" EU countries, and not all of them.
  - nknighthb 13y ago
    I 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 ago

To 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 ago
70% 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 ago
  I'd love to see the details of those stats - can you point me to the source where it gives the 70% figure?
  - fasouto 13y ago
    http://www.gestha.es/?seccion=actualidad&num=221 http://www.gestha.es/?seccion=actualidad&num=221
    - antr 13y ago
      I 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 ago
        As 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 ago

In 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 ago

To 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