5 ms·

> I'm almost considering shutting down sales to EU customers. Then someone will launch a business that will do the same you do, but complying with regulations.

by mahouse 12y ago

> I'm almost considering shutting down sales to EU customers. Then someone will launch a business that will do the same you do, but complying with regulations. Taxes must be collected; without taxes, the welfare state collapses. You should know that, to be able to sell something in a market, you must understand its regulations first, and respect the decisions the citizens have taken (in this case, regarding taxes) through democratic ways.

e98cuenc 12y ago
He understands that. His problem is that the bureaucracy to comply with the rules is too high, and I agree. I have a SaaS service in the EU. I have always paid my taxes and I'm not against them. But I want to have a reliable and hopefully simple process to know how to process payments. The proposed changes are a bit PITA to everybody. I hope they will come with a simpler process, as it's scary all that I will have to do to add a foreign EU customer.
- Silhouette 12y ago
  There is a simpler (not simple) mechanism that is being set up to help administer this scheme. Here in the UK, it's the government's Mini One Stop Shop: https://www.gov.uk/register-and-use-the-vat-mini-one-stop-shop https://www.gov.uk/register-and-use-the-vat-mini-one-stop-sh... I gather similar schemes are being set up elsewhere in the EU, though I don't know if it's universal. It appears that as a business that is already VAT registered and filing quarterly returns in the UK, the key points for us will be that: 1. we have to charge VAT to customers elsewhere in the EU at their local rates, which we will be responsible for monitoring in all 28 states; 2. we have to submit all of the VAT to the UK tax authority (HMRC) as we do at present; 3. we have to file an additional quarterly return via MOSS breaking down exactly where our customers/revenues come from, so HMRC can distribute the funds to their counterparts around the EU; 4. we will be required to collect a completely impractical standard of evidence for the location of those customers and will be entirely responsible if and when we fail to do the impossible and it turns out someone lied to us about where they live; and 5. we will be subject to arbitrary audit/investigation by 28 tax authorities instead of just our own, at our own expense naturally (though there is some suggestion that the UK authorities will at least try to co-ordinate this to prevent what they consider an unreasonable burden being imposed). The real sting in the tail, if I've understood the announcements so far correctly, will be for those who have a low volume of trade and so currently do not have to register for VAT at all. In order to use MOSS, you have to be VAT registered within the UK, and thus either add the current VAT rate onto all your prices when charging customers or take a hit of the equivalent fraction of your existing revenues if you choose to keep prices the same. I really hope I'm wrong about this, but I haven't yet seen anything suggesting that just because you're under the threshold for VAT registration in any/all EU states you'll be exempt from the new funds transfer arrangements, meaning a single foreign customer could suddenly put your entire business within the range of requiring VAT registration.
  - pbhjpbhj 12y ago
    >you have to be VAT registered within the UK // They're saying you can be registered purely for the VAT MOSS and so account for VAT as if your were unregistered for UK transactions. I've not read anything on whether you'll be allowed to reclaim VAT on your inputs on e-goods/services you sell with VAT though (which is the usual way VAT registration works, you don't pay VAT on your inputs). This group https://www.facebook.com/groups/DigitalVAT2015/ https://www.facebook.com/groups/DigitalVAT2015/ seems to be useful to keep track of it all from an SME perspective.
Igglyboo 12y ago
He's not shutting down because of taxes, he's shutting down because the burden of collecting taxes is too high and solely on the business owner.
wbond 12y ago
The issue is that I am now subject to collecting taxes for a country that I have nothing to do with. I have never set foot in an EU country, I don't choose to sell to EU customers, they just come to my US-based website and pay in USD. I comply with all of my local tax laws. I can be involved with my local government and affect change. I can't do that in the EU. The way this is all written, I'll actually have to do work to BLOCK customers from the EU, or face legal issues. It seem more reasonable to require that the people who LIVE in the EU deal with their own local taxes. Can you imagine having to keep track of tax laws of 195 countries? I'm sure a company like Amazon can deal with that no problem, but self-employed people developing software, music or ebooks are basically screwed and now need to waste a ton of their time trying to figure out exactly how to jump through the ever-changing hoops.
- mahouse 12y ago
  Your tax-free business is then more profitable than the one that complies with the law, which is unfair. Collecting less taxes would have a detrimental effect in the state, too.
- deleted 12y ago
  [deleted]
- honzzz 12y ago
  Maybe I am missing something but how could you be subject to collecting taxes for a country that you have nothing to do with? AFAIK, EU laws apply to EU entities. If you are not EU citizen and do not own any EU-registered company, how could they have jurisdiction over you?
  - MichaelGG 12y ago
    The US is the same. Software sales into the US (income from a US source) are subject to US taxes. There's some rules about what exactly constitutes a US source, but from my layman reading it sounds like if you market in the US, you may be required to pay.
  - nawitus 12y ago
    There are no EU laws. Member states create laws from EU directives. These laws often apply to everyone outside the member country. In practise these laws generally don't matter outside the member state, as it would be nearly impossible to enforce them. But the principle does exist, and the laws sometimes are enforced.
MistahKoala 12y ago
> respect the decisions the citizens have taken (in this case, regarding taxes) through democratic ways Except the citizens haven't taken that decision: the unelected European Commission has. We could probably go down the reductio ad absurdum road of highlighting their appointment by someone who got elected somewhere along the way, but this powerful body is in no way directly accountable to citizens. Some of the British North American colonials had a popular mantra of "no taxation without representation", which might appeal in this situation.
- rmc 12y ago
  The citizens voted for national parliaments who appointed the EC, and support the EC.
  - MistahKoala 12y ago
    Like I said: reductio ad absurdum.
  - Silhouette 12y ago
    Or, if you live in the UK: 1. The citizens vote for a local Member of Parliament to be their representative (the winning MP actually being chosen via the statistically dubious First Past The Post system). 2. The party with the largest group of MPs probably forms the government (except when it doesn't, as with our current coalition administration). 3. The leader of the winning party becomes Prime Minister (except when that leader changes after the election, even if there was an explicit promise before the election that this wasn't what people would be voting for, as with Gordon Brown in the previous administration). 4. The senior executive roles within the government and indirect representatives such as European Commissioners are effectively appointed by the PM and their possibly entirely unelected political advisors. The idea that European Commissioners have any meaningful electoral accountability at all is crazy. If you don't think so, try this simple test: When our citizens cast their only relevant vote on this matter at the last election in their constituency, was it even possible for them to know the name of the person who would ultimately become the European Commissioner for our country?

by mahouse 12y ago

e98cuenc 12y ago

He understands that. His problem is that the bureaucracy to comply with the rules is too high, and I agree. I have a SaaS service in the EU. I have always paid my taxes and I'm not against them. But I want to have a reliable and hopefully simple process to know how to process payments. The proposed changes are a bit PITA to everybody. I hope they will come with a simpler process, as it's scary all that I will have to do to add a foreign EU customer.

Silhouette 12y ago
There is a simpler (not simple) mechanism that is being set up to help administer this scheme. Here in the UK, it's the government's Mini One Stop Shop: https://www.gov.uk/register-and-use-the-vat-mini-one-stop-shop https://www.gov.uk/register-and-use-the-vat-mini-one-stop-sh... I gather similar schemes are being set up elsewhere in the EU, though I don't know if it's universal. It appears that as a business that is already VAT registered and filing quarterly returns in the UK, the key points for us will be that: 1. we have to charge VAT to customers elsewhere in the EU at their local rates, which we will be responsible for monitoring in all 28 states; 2. we have to submit all of the VAT to the UK tax authority (HMRC) as we do at present; 3. we have to file an additional quarterly return via MOSS breaking down exactly where our customers/revenues come from, so HMRC can distribute the funds to their counterparts around the EU; 4. we will be required to collect a completely impractical standard of evidence for the location of those customers and will be entirely responsible if and when we fail to do the impossible and it turns out someone lied to us about where they live; and 5. we will be subject to arbitrary audit/investigation by 28 tax authorities instead of just our own, at our own expense naturally (though there is some suggestion that the UK authorities will at least try to co-ordinate this to prevent what they consider an unreasonable burden being imposed). The real sting in the tail, if I've understood the announcements so far correctly, will be for those who have a low volume of trade and so currently do not have to register for VAT at all. In order to use MOSS, you have to be VAT registered within the UK, and thus either add the current VAT rate onto all your prices when charging customers or take a hit of the equivalent fraction of your existing revenues if you choose to keep prices the same. I really hope I'm wrong about this, but I haven't yet seen anything suggesting that just because you're under the threshold for VAT registration in any/all EU states you'll be exempt from the new funds transfer arrangements, meaning a single foreign customer could suddenly put your entire business within the range of requiring VAT registration.
- pbhjpbhj 12y ago
  >you have to be VAT registered within the UK // They're saying you can be registered purely for the VAT MOSS and so account for VAT as if your were unregistered for UK transactions. I've not read anything on whether you'll be allowed to reclaim VAT on your inputs on e-goods/services you sell with VAT though (which is the usual way VAT registration works, you don't pay VAT on your inputs). This group https://www.facebook.com/groups/DigitalVAT2015/ https://www.facebook.com/groups/DigitalVAT2015/ seems to be useful to keep track of it all from an SME perspective.

Igglyboo 12y ago

He's not shutting down because of taxes, he's shutting down because the burden of collecting taxes is too high and solely on the business owner.

wbond 12y ago

The issue is that I am now subject to collecting taxes for a country that I have nothing to do with. I have never set foot in an EU country, I don't choose to sell to EU customers, they just come to my US-based website and pay in USD. I comply with all of my local tax laws. I can be involved with my local government and affect change. I can't do that in the EU. The way this is all written, I'll actually have to do work to BLOCK customers from the EU, or face legal issues. It seem more reasonable to require that the people who LIVE in the EU deal with their own local taxes. Can you imagine having to keep track of tax laws of 195 countries? I'm sure a company like Amazon can deal with that no problem, but self-employed people developing software, music or ebooks are basically screwed and now need to waste a ton of their time trying to figure out exactly how to jump through the ever-changing hoops.

mahouse 12y ago
Your tax-free business is then more profitable than the one that complies with the law, which is unfair. Collecting less taxes would have a detrimental effect in the state, too.
deleted 12y ago
[deleted]
honzzz 12y ago
Maybe I am missing something but how could you be subject to collecting taxes for a country that you have nothing to do with? AFAIK, EU laws apply to EU entities. If you are not EU citizen and do not own any EU-registered company, how could they have jurisdiction over you?
- MichaelGG 12y ago
  The US is the same. Software sales into the US (income from a US source) are subject to US taxes. There's some rules about what exactly constitutes a US source, but from my layman reading it sounds like if you market in the US, you may be required to pay.
- nawitus 12y ago
  There are no EU laws. Member states create laws from EU directives. These laws often apply to everyone outside the member country. In practise these laws generally don't matter outside the member state, as it would be nearly impossible to enforce them. But the principle does exist, and the laws sometimes are enforced.

MistahKoala 12y ago

> respect the decisions the citizens have taken (in this case, regarding taxes) through democratic ways Except the citizens haven't taken that decision: the unelected European Commission has. We could probably go down the reductio ad absurdum road of highlighting their appointment by someone who got elected somewhere along the way, but this powerful body is in no way directly accountable to citizens. Some of the British North American colonials had a popular mantra of "no taxation without representation", which might appeal in this situation.

rmc 12y ago
The citizens voted for national parliaments who appointed the EC, and support the EC.
- MistahKoala 12y ago
  Like I said: reductio ad absurdum.
- Silhouette 12y ago
  Or, if you live in the UK: 1. The citizens vote for a local Member of Parliament to be their representative (the winning MP actually being chosen via the statistically dubious First Past The Post system). 2. The party with the largest group of MPs probably forms the government (except when it doesn't, as with our current coalition administration). 3. The leader of the winning party becomes Prime Minister (except when that leader changes after the election, even if there was an explicit promise before the election that this wasn't what people would be voting for, as with Gordon Brown in the previous administration). 4. The senior executive roles within the government and indirect representatives such as European Commissioners are effectively appointed by the PM and their possibly entirely unelected political advisors. The idea that European Commissioners have any meaningful electoral accountability at all is crazy. If you don't think so, try this simple test: When our citizens cast their only relevant vote on this matter at the last election in their constituency, was it even possible for them to know the name of the person who would ultimately become the European Commissioner for our country?