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

vatmossapi.com

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

#101

Post by blibble »

toyg wrote: post #100
blibble wrote: post #86

Earlier quoted context omitted.

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 actuall…

all of my customers, bar one, are non-VAT-registered

the actual numbers above are examples, but the scenario matches mine pretty much perfectly, so I'm not sure why you would say that I'm misrepresenting anything

these are digital services, not cars or cans of soup

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

#102

Post by agopaul »

tonyedgecombe wrote: post #94
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.

I don't know how their service works. Do they pose as a 'gateway company' between you and your customers or are they just a payment gateway? If it's the latter, then the hardest problems still stand since accounting and invoicing is still something that you have to do.

It would be great to have a service that resells your goods/services and takes care of all that stuff so you can send a single invoice to them every month and that's it, but frankly, I'm not sure of the legal part of that.

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

#103

Post by thirdsun »

nik736 wrote: post #98
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 n…

I'm aware of that. However since the service in question only seems to handle the business to consumer case, I don't see a need for asking for seller's country.

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

#104

Post by tonyedgecombe »

agopaul wrote: post #102
tonyedgecombe wrote: post #94

Earlier quoted context omitted.

Or you just outsource it to someone like Avangate.

I don't know how their service works. Do they pose as a 'gateway company' between you and your customers or are they just a payment gateway? If it's the latter, then the hardest problems still stand since accounting and invoicing is still something that you have to do. It would be great to have a service that resells your goods/services and takes care of all that stuff so you can send a single invoice to them every m…

They are buying the product from you and selling it on to the customer. So you only have one customer to deal with and you just need to invoice them once a month.

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

#105

Post by Silhouette »

stdbrouw wrote: post #84
Silhouette wrote: post #51

Earlier quoted context omitted.

I simply shut down. The VATMOSS nonsense ate up all the profits I'm sorry to hear that, though sadly not surprised. It's also scary how much misinformation or simple ignorance is out there about this issue, and I'm talking generally here not just about parts of this HN discussion. I saw a discussion on another forum recently, and someone there was stubbornly maintaining that compliance was easy and they'd done it and…

To avoid adding to the misinformation and ignorance out there, what are some of these edge cases and minor details?

A few that come to mind immediately are the record-keeping requirements (need to keep two acceptable and non-conflicting sources of evidence for each place of supply, for a long time), geolocation inaccuracy (geo-IP databases typically have about 5-10% error rate in country identification according to most reports I've seen), regional variations (dependent territories might have different tax rules to their parent member state, so the country alone isn't sufficient to determine the correct tax rate), and dealing with refunds/returns/replacements/etc (where unlike most VAT returns as I understand it, for a MOSS return you're supposed to retrospectively update things once you've already filed them and then deal with how to adjust for any tax now over/underpaid originally).

As people have noted in various other comments here, you also have to keep up with any changes in the rates themselves and understand any local rules in each member state on which rate applies, possibly deal with just plain incorrect demands from foreign tax authorities or more reasonable but still onerous tax audits if your number comes up, and of course there are the basic overheads for operating a second tax scheme on top of your national one in the first place, including some slightly eccentric rules for dealing with exchange rates if they affect you.

Also, the VAT rules don't override consumer protection rules about advertising VAT-inclusive prices for B2C sales, which creates some interesting dilemmas if you're running a web site where you want to show correct prices based on a visitor's location but you don't have sufficient evidence until you get to the payment step to actually verify that location to a satisfactory standard. The only completely safe solution to this that I know is to advertise a fixed price to everyone, which means you're taking the VAT hit directly from your revenues and if nations change their VAT rates then it's your business that wins/loses, not the customer, which is entirely not how VAT is supposed to work.

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

#106

Post by jacquesm »

Silhouette wrote: post #105
stdbrouw wrote: post #84

Earlier quoted context omitted.

To avoid adding to the misinformation and ignorance out there, what are some of these edge cases and minor details?

A few that come to mind immediately are the record-keeping requirements (need to keep two acceptable and non-conflicting sources of evidence for each place of supply, for a long time), geolocation inaccuracy (geo-IP databases typically have about 5-10% error rate in country identification according to most reports I've seen), regional variations (dependent territories might have different tax rules to their parent me…

HN should have a 'reference' comments section, this is a good one.

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

#107

Post by jacquesm »

stdbrouw wrote: post #89
jacquesm wrote: post #30

Earlier quoted context omitted.

It's rare to find a business that only sells to consumers. You really should make the limitations and the targeted audience for the service absolutely clear or you're going to create a world of hurt for the people that use your service thinking you are solving a problem for them. Essentially you are giving tax advice, that's not an arena you should walk into without professional guidance to make sure you get this 100…

Hmm, are you sure there is a difference between consumers and businesses when it comes to VATMOSS? Google, for example, charges VAT for digital services such as Google Suite even when you provide a valid European VAT number. (As a business customer, this doesn't affect me, as I simply get to deduct this on my own return.)

Yes, but I can see why some businesses would not want to deal with that hassle, simply invoice including VAT and let the customer sort out the recoup. But technically you don't have to and many businesses customers will appreciate this.

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

#108

Post by jacquesm »

mherrmann wrote: post #76
jacquesm wrote: post #60

Earlier quoted context omitted.

If you're 'not sure' you should take this offline until you are sure. Bookkeeping is an extremely bad area to go 'move fast and break stuff' because what you're breaking is other people's administrations and you won't have a way to fix it or even to reach them to inform them of an issue.

You're being extremely critical in this entire thread. Tell me: How is having this field, unnecessary or not, a risk? You want me to take the site offline. But it's providing value to my own business, and apparently other people find it interesting as well. It's merely a REST API for an existing open source project. And whether people use the library or the REST API is the same from a risk perspective from their poin…

> You're being extremely critical in this entire thread.

Yes.

> Tell me: How is having this field, unnecessary or not, a risk?

- an unnecessary field implies that that field is either being collected or being used in the calculations, if it isn't then it simply should not be there.

> But it's providing value to my own business, and apparently other people find it interesting as well.

I'm sure it is, but it is also a risk and it seems as though you have not done the homework required to field a service such as this. That's a dangerous hobby.

> It's merely a REST API for an existing open source project.

No, it is a piece of software that you field that has the risk of affecting businesses that use it in a critical and potentially negative way if you mess up and it does not appear that you treat this subject with the seriousness normally associated with such a project.

> And whether people use the library or the REST API is the same from a risk perspective from their point of view.

That is so far from the truth that I again wonder if you know what you are doing.

> I'm providing value here, and am happy to run the risk you're advising against. > So I will not take it offline.

Suit yourself.

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