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Krita Foundation in Trouble

krita.org

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Re: Krita Foundation in Trouble

#81

Post by 1110001110 »

asb wrote: post #64
DangerousPie wrote: post #48

> The Foundation was created to be able to have Dmitry work full-time on Krita. Because we sell stuff, the tax inspector has determined that we’re a company, and should have paid VAT in the Netherlands over the work Dmitry has been doing in Russia. Even though there is no VAT in Russia on the kind of work Dmitry is doing. As someone who has dealt with VAT in the EU a bit this sounds really odd to me. Even if the insp…

This is an understandable assumption, but it's actually not the way it works. I'm sure the Dutch tax authorities have equivalent documentation, but the UK description of the 'reverse charge' should explain the basic principle https://www.gov.uk/guidance/vat-imports-acquisitions-and-pur...

Link to the Dutch Tax Authority:

- [1] Reverse-charging VAT (English)

- [2] Calculating VAT for services to and from non-EU-countries (Dutch)

[1] https://www.belastingdienst.nl/wps/wcm/connect/bldcontenten/...

[2] https://www.belastingdienst.nl/wps/wcm/connect/bldcontentnl/...

Re: Krita Foundation in Trouble

#82

Post by gcp »

molszanski wrote: post #30
boudewijnrempt wrote: post #7

Earlier quoted context omitted.

Well, actually there is complexity. We did pay the VAT over everything we sold, of course. That was simple. What we didn't do was pay VAT in the Netherlands over the money we sent Dmitry for his work in Russia. If the Foundation had been a company, we would have had to pay that VAT in the Netherlands, but would have claimed it back -- net result, 0. If the foundation had never sold anything, so not been company-like,…

Also, I would try going to the local tax office. Maybe yours is a friendly one (I've been to both types) and you can get to speak with a your tax area local management. They might have enough knowledge and administrative power and help you out. Human to human protocol. Been there, done that, got a t-shirt.

Maybe you should read the original article first. Just saying. They spent months, got a lawyer involved, and got the fine reduced, a bit.

Re: Krita Foundation in Trouble

#83

Post by _Codemonkeyism »

KayEss wrote: post #66
Kiro wrote: post #57

Earlier quoted context omitted.

What do you mean? You pay VAT on imported goods. Not on imported services.

You might pay a customs duty on imported goods, but you don't pay VAT.

You need to pay VAT on imported goods into the EU.

In Germany it is called "Einfuhrumsatzsteuer".

Re: Krita Foundation in Trouble

#84

Post by icebraining »

gcp wrote: post #70
Sujan wrote: post #54

Earlier quoted context omitted.

If this were the case, wouldn't that person be liable then?

They would need to prove they suffered loss (and an actual error!). That's not clear in this situation. Not paying taxes you were due isn't extra costs due to your accountant, although fines and interests may be.

They say the money made by the developer is only due because of iffy status of the Foundation, and now the income is tax free. So it seems that the taxes due were because of the accountant advice on the structure of the Foundation - unless the sales started later, or the laws changed in between.

Re: Krita Foundation in Trouble

#85

Post by xupybd »

mrkrabo wrote: post #10
nekopa wrote: post #9

Earlier quoted context omitted.

I thought fraud involves intent to deceive. Seems like they made a mistake, and they aren't trying to avoid the bill.

Splitting a company in two so you can avoid paying taxes is not an attempt to deceive? Is it horrible when Apple uses Ireland to avoid taxes, but OK if KDE does it?

It's not an attempt to deceive. It's an attempt to navigate a complex tax system. I personally have no problem with any company avoiding tax where they can. I do have a problem with governments opening up huge tax loop holes for companies to use. Of course companies will do all they can to avoid tax. It's up to governments to build fair and robust tax frameworks.

This is a group of passionate people developing a great product and giving it away. I'm not sure any law maker would want to target these guys for tax revenue. I'm not sure the auditors actions represent the spirit of the law.

Re: Krita Foundation in Trouble

#86

Post by boudewijnrempt »

gcp wrote: post #77
lvoudour wrote: post #72

Earlier quoted context omitted.

Just curious, if Russia has no vat for that service, Dmitry is based in Russia and the sole purpose of the foundation is to support him, why was the foundation set up in the Netherlands and not in russia?

From the article it sounds the Foundation is run by other (Dutch) people working on Krita who may or may not be paid from it as well.

Yes... I'm Dutch, so that's where I created the foundation. Originally, we wanted to work through the German KDE e.V., but they couldn't support development work financially.

Re: Krita Foundation in Trouble

#87

Post by EliRivers »

mrkrabo wrote: post #5
Jonnax wrote: post #2

That's really sad to hear. With how complex laws are, it's scary that going to a professional may not be sufficient. But when you're totally unfamiliar with what the requirements are what can you do? Do large law/accountancy firms give a guarantee for their advice in the case that it was incorrect?

Say what you will but this is simply fraud. If they were selling stuff, they should've collected and paid the VAT for Dmitry. You are NOT a non-profit if you sell stuff. There is absolutely no complexity about this. Didn't they see anything wrong with selling stuff without collecting the VAT from every transaction? And the best part: they are now separating the sales from the foundation so they can avoid paying taxes…

This is the kind of stuff HN abhors... ooops it's not Amazon, it's Krita!

Amazon want to skip taxes with the intent of making more money for themselves.

Krita want to skip taxes with the intent of making free software for strangers.

Seems like there's a moral difference there (as well as, of course, the actual legal difference).

Re: Krita Foundation in Trouble

#88

Post by xupybd »

boudewijnrempt wrote: post #12
mrkrabo wrote: post #10

Earlier quoted context omitted.

Splitting a company in two so you can avoid paying taxes is not an attempt to deceive? Is it horrible when Apple uses Ireland to avoid taxes, but OK if KDE does it?

Well, that's what the tax inspector suggested we do...

mrkrabo is not being fair or reasonable. Please don't let their comments add to your stress. You've helped build something fantastic. This situation will be over soon enough. Good luck and thank you for your efforts.

Re: Krita Foundation in Trouble

#90

Post by gcp »

boudewijnrempt wrote: post #40
coldtea wrote: post #34

Earlier quoted context omitted.

> Say what you will but this is simply fraud. If they were selling stuff, they should've collected and paid the VAT for Dmitry. You are NOT a non-profit if you sell stuff. Non-profits sell stuff all the time, and whether you are exempt from VAT or not for that depends on the jurisdiction and even within a single country can have several subtleties. > There is absolutely no complexity about this. Oh yes, there is. Her…

> Oh yes, there is. Here's how an expert puts it: "Sadly not. Charity VAT is one of the more complicated areas of VAT, which is a great shame given that many charities are operated by unpaid volunteers who have to administer the complex rules." [1] And then add the complexity of an international situtation...

Involving a party outside the EU. I bet the latter is what really threw your first accountant off: nonprofit + suppliers outside EU. Most accountants never have to deal with something like this in their entire career.
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