Show HN: A REST API for Calculating VAT in the EU • Hacker News Board

Re: Show HN: A REST API for Calculating VAT in the EU

#91

Post by jacquesm » Mon, Apr 10, 2017, 4:06 PM UTC

dullgiulio wrote: post #85

jacquesm wrote: post #13

Earlier quoted context omitted.

That's what the 'MOSS' part of VATMOSS is all about: "Mini One Stop Shop", a way to take all your business across the various EU countries allowing you to specify which country you had how much turnover in and then paying this to a single account which will take care of disbursement. I used this system for as long as it has been active and it works but is still ridiculously labor intensive for small amounts. The bigg…

Would you mind explaining how these companies work around the rule? These services are all payments with credit card, it shouldn't be so hard to trace them.

The biggest ace they can play is process the payments outside of the EU.

Re: Show HN: A REST API for Calculating VAT in the EU

#92

Post by waynecochran » Mon, Apr 10, 2017, 4:13 PM UTC

bambax wrote: post #87

tomschlick wrote: post #62

VAT just sounds like a huge, overcomplicated mistake by the EU. Why do you guys continue to live with it instead of repealing or fixing it?

"VAT" (the idea) is certainly not a mistake, it's one of the best way to do taxes, because it's, if not painless, at least almost invisible to the taxpayer (but it's considered by many to be unjust, because the poor spend a much larger part of their income in taxable goods than the rich, and so pay a bigger share of VAT). The complexity of VAT in Europe is recent. (I think) it used to be the case that if you sold som…

I am admittedly naive on these matters, but I always thought that VAT is more efficient than a sales tax from the vendor's perspective and transparent to the consumer (an item costs $1.25 and you pay $1.25).

Re: Show HN: A REST API for Calculating VAT in the EU

#93

Post by thescriptkiddie » Mon, Apr 10, 2017, 4:34 PM UTC

bambax wrote: post #87

tomschlick wrote: post #62

VAT just sounds like a huge, overcomplicated mistake by the EU. Why do you guys continue to live with it instead of repealing or fixing it?

"VAT" (the idea) is certainly not a mistake, it's one of the best way to do taxes, because it's, if not painless, at least almost invisible to the taxpayer (but it's considered by many to be unjust, because the poor spend a much larger part of their income in taxable goods than the rich, and so pay a bigger share of VAT). The complexity of VAT in Europe is recent. (I think) it used to be the case that if you sold som…

Fun fact. Collecting VAT based on the country where the customer resides is called border adjustment. In effect, all exports are tax-free, and all imports are taxed at the same rate as domestically-made goods. It is arguably the most important part of a VAT, because it levels the playing field in regards to international trade. This is in contrast to the way things are done in the United States, where exports are taxed, but imports (ignoring specific tariffs) are not. The whole scheme might seem a bit silly and over-complicated for digital goods and services, but from the perspective of people dealing in physical goods it actually simplifies the paperwork dramatically because the slate is wiped clean every time a good crosses a border.

Now, what is unnecessarily complicated about VAT in Europe is the presence of very many exemptions. So rather than just doing the same paperwork for every good you sell, you have to consult a database to figure out that you should pay a reduced rate for good X or no VAT at all for good Y. This was done in the name of fairness to the poor — it doesn't seem right to tax essentials like staple foods or hygiene products. But arguably, it would have been much simpler to grant the poor an income tax break sufficient to cover the VAT they are likely to pay for such goods.

Re: Show HN: A REST API for Calculating VAT in the EU

#94

Post by tonyedgecombe » Mon, Apr 10, 2017, 4:45 PM UTC

agopaul wrote: post #63

The barrier of running an EU B2C business is so high if you need to sell all over EU that most of the time it doesn't even make sense. It's a shame because if you're in the EU and you want to bootstrap a small B2C business you have no choice other than sticking to the country you're in.

Or you just outsource it to someone like Avangate.

Re: Show HN: A REST API for Calculating VAT in the EU

#95

Post by tonyedgecombe » Mon, Apr 10, 2017, 4:49 PM UTC

agopaul wrote: post #74

tomschlick wrote: post #69

Earlier quoted context omitted.

I understand why there is a need for the variable rates, but the administration of it all sounds horrible. There should be a single source of truth for the rates data, and there should be an api instead of having to rely on a third party for that information.

Definitely, and hopefully, an API that works better than the one already in place for VAT validation (which is quite unreliable)

That API really is awful, I'm sure it's down most of the time.

Re: Show HN: A REST API for Calculating VAT in the EU

#96

Post by Silhouette » Mon, Apr 10, 2017, 4:50 PM UTC

talideon wrote: post #68

Silhouette wrote: post #29

Earlier quoted context omitted.

There are variable rates almost everywhere, but this API is specifically about digital sales (where the MOSS system applies) so it will typically be that headline rate that you need anyway. Of course, there's no guarantee that that will always be the case, and to know for sure you need to understand the tax systems of 28 different EU member states. This is (one of many reasons) why the new EU VAT rules have been so c…

Sure, the headline rate is applicable for most things, but not everything, and those differences can be important. For instance, if Amazon are selling children's shoes into Ireland, they must charge 0% VAT. That's still a digital sale.

That's a sale of goods, though, which isn't currently covered by the VAT rules and MOSS scheme that we're discussing here, and doesn't seem to be the intended use for the OP's API.

Re: Show HN: A REST API for Calculating VAT in the EU

#97

Post by tonyedgecombe » Mon, Apr 10, 2017, 4:50 PM UTC

Silhouette wrote: post #15

The EU administration itself or the national tax authorities in the EU should have provided an official service like this to go with the VAT changes for digital sales from day one. I appreciate someone else stepping up and doing it, though I'd want to see more information about the source(s) they were using for the data and how frequently they were checked before I'd hook a real business up to a third party service l…

I wonder if all tax rules should be expressed in code, it would reduce ambiguity.

Re: Show HN: A REST API for Calculating VAT in the EU

#98

Post by nik736 » Mon, Apr 10, 2017, 4:52 PM UTC

thirdsun wrote: post #82

Is there any reason to ask for the country of the business/seller? As far as I know it's irrelevant and the VAT only depends on the buyer's country (for digital goods/services).

You need it for sure. Example:

I have my business in Germany. If I write an invoice to a german company I add 19% VAT. If I sell to a company inside the EU but not in Germany I add 0%, since it's a reverse charge.

That means that the company in the EU country directly pays the taxes to their country and I don't have to pay it to my country. This solves a lot of bureaucracy hassle.

Exception is where I am selling to no business, but a private person within the EU, I will charge VAT there and pay it to my country which redirects it to the EU country (that's called MOSS).

Re: Show HN: A REST API for Calculating VAT in the EU

#99

Post by kspaans » Mon, Apr 10, 2017, 4:57 PM UTC

waynecochran wrote: post #92

bambax wrote: post #87

Earlier quoted context omitted.

"VAT" (the idea) is certainly not a mistake, it's one of the best way to do taxes, because it's, if not painless, at least almost invisible to the taxpayer (but it's considered by many to be unjust, because the poor spend a much larger part of their income in taxable goods than the rich, and so pay a bigger share of VAT). The complexity of VAT in Europe is recent. (I think) it used to be the case that if you sold som…

I am admittedly naive on these matters, but I always thought that VAT is more efficient than a sales tax from the vendor's perspective and transparent to the consumer (an item costs $1.25 and you pay $1.25).

The main difference between VAT and sales tax is that VAT is paid by each stage in the supply chain (every time someone "adds value"), and reclaimed by charging it to the next stage up in the chain. Sales tax is charged only once, at the final point of sale to the consumer.

The end effect is the same: the consumer ends up paying whatever % the tax is. The difference is in how it's collected. Sales tax is easier to evade because business-to-business sales usually don't charge sales tax. So you could wink at your customer and say they're a business and not charge them sales tax. With VAT everyone is supposed to pay it, so it's harder to evade (and consequently more expensive for governments to collect).

Re: Show HN: A REST API for Calculating VAT in the EU

#100

Post by toyg » Mon, Apr 10, 2017, 4:59 PM UTC

blibble wrote: post #86

stdbrouw wrote: post #81

Earlier quoted context omitted.

The VAT for all costs you incur can be deducted, regardless of whether they're fixed or variable. If you're operating at a loss or if you do a lot of business with places where you don't have to charge VAT, it's not impossible to have VAT owed to you rather than the other way around. Might it affect your profitability? Definitely possible. But it won't eat up 20% of your revenue or require you to charge 20% more to b…

no VAT: - £10,000 to produce a infinitely reproducible widget -> costs of £10,000 - sell 5,000 times for £10 -> income £50,000 profit of £40,000 with VAT: - £10,000 to produce a infinitely reproducible widget, all allowable, 20% VAT back -> costs of £8,000 - sell 5,000 times for £10 - (approx) £2 VAT -> income of £40,000 now I have a profit of £32,000 instead if I'm selling mostly domestically the logical conclusion…

The misrepresentation in your calculation is that with VAT you really sell a widget for £12; if you're selling to businesses, they recoup those £2 so they don't care, and if you're selling to consumers all your competitors also factor in the same tax in their prices so again nobody cares.

At that point, 5000 widgets at 10 net = 50000 - 8000 net costs = 42000 -> as a business, if your costs include VAT, you're actually better off by opting in. Sure, you feel the pain when you first transition (which is why you should have started with it right away), the first couple of years the taxman will be greedy, and vatmoss is a clusterfuck in its own right, but vat as a concept is actually extremely business-friendly. (I say that as someone who hates it for the regressive flat-tax on the poor that it actually is; I'd be happy to lose it tomorrow in exchange for higher corporation tax, but that won't make you any happier...)