A simple solution would be to incorporate outside of such a convoluted and destructive tax regime. There are much friendlier locations.
Krita Foundation in Trouble
211–220 of 235 posts
Re: Krita Foundation in Trouble
#212Why not fold it and move to Bitcoin-only donations? The authorities will have nothing to chase, the problem can't re-occur, accounting will be transparent, and accountants will not be required in future. Seriously, Dutch should start a petition against their tax authorities for victimizing an open source project.
>The authorities will have nothing to chase,
Yeah. Then the judge will tell you "Pay your taxes - then fines, etc - or we'll liquidate your corporation/foundation". If you don't pay, or give them access to the Bitcoins when they liquidate, they may hold you for contempt (or equivalent in the Netherlands).
Don't think you can mess with a Nation State by simply not using the national currency. It's like wanting to evade corporate taxes by burying gold in a corn field...
Re: Krita Foundation in Trouble
#213Earlier quoted context omitted.
Do you even understand what VAT is and how it works? They are and were collecting VAT on their sales. This part is unavoidable regardless. For the stuff they buy, they're not avoiding VAT. There's no point in avoiding VAT because it doesn't cost a business anything. YOU GET IT BACK FROM THE STATE. The whole point of VAT is that it is a zero-sum game for businesses. But due to their old structure, they're in a situati…
Of course I know what VAT is. I am a freelancer based in Europe. And I know if I'm paying SOMEONE for his services I also have to pay VAT, regardless of whether I'll get it back later or not. Why? Because I have to prove that VAT was spent in something related to my business (I can't have the VAT from my food returned, for example). It does not only apply to goods, it also applies to services.
You are a freelancer, not a nonprofit, right?
Re: Krita Foundation in Trouble
#214Earlier 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. 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…
> You are NOT a non-profit if you sell stuff. Depends on the legal system. From what I remember (once worked in a foundation myself) the general approach in EU is that donations are "tax-free" but if you "sell" anything, you should calc profit/loss and pay a corporate tax. Paying for Dmitry is a statutory expense, so don't understand why that would raise an eyebrow.
Because of how VAT works (which in turn is different for companies and nonprofits).
Re: Krita Foundation in Trouble
#215Earlier quoted context omitted.
Euro denominated transactions within the SEPA zone (more than just the EU!) cannot be more expensive than domestic euro transactions. See https://nl.wikipedia.org/wiki/Single_Euro_Payments_Area .
But if your country doesn't use the Euro (i.e. the UK), domestic Euro transactions can be more expensive than domestic transactions in the home currency.
The same loophole is used in Bulgaria. Our largest bank charges 7 EUR for receiving 1 EUR, and 19 EUR for sending 1 EUR.
Re: Krita Foundation in Trouble
#216Earlier 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?
Splitting a company in two so that they can precisely pay VAT taxes on things that VAT is supposed to apply to, no more tax, no less tax.
That is definitely not an attempt to deceive.
Re: Krita Foundation in Trouble
#217Re: Krita Foundation in Trouble
#218Earlier quoted context omitted.
> Why not fold it and move to Bitcoin-only donations? I'm a huge advocate for Bitcoin, but this is a terrible idea. They're trying to support staff and the last thing you want to do in that circumstance is to limit the potential donor pool. I also don't see how changing the currency of the problematic transactions changes the tax implications.
In fact changing currency doesn't change tax implications if you intend to be legal. If you want to be illegal and risk not getting noticed you can hide behind bitcoin but the first auditor will notice this and report "I don't know how much, but there is tax fraud here so lets give maximum fines".
Yes, but folding the entity means in most cases you are no longer liable for those past accounting hiccups.
In future, you don't have to pay accountants, or waste time dealing with the state.
Immensely practical.
As far as donor pools go, if there is no way to obtain a monthly subscription from people via cryptocurrency then build it, as there is clearly demand.
Re: Krita Foundation in Trouble
#219Earlier quoted context omitted.
The problem (at leas in Japan) is the other way around. If I export an service from Japan to another country, I have to pay the Japanese equivalent of VAT. The importer does not generally have to pay (but I guess it depends on the place) because it has already been paid. The problem for the Krita foundation was that their employee (who was outside of the EU) was doing consulting work through Krita. It didn't matter t…
I think you got it completely wrong. He was not an employee. He was providing a service to the foundation and sending them an invoice. I guess that if he had been in the EU instead of Russia, they would have noticed earlier that they were required to pay also the VAT. As he was in Russia, they had to account for the VAT owed to the tax authorities for this imported service themselves but they didn't.
Oh I see. Because the VAT was never paid in Russia. That makes sense (in the twisted way that VAT makes sense). Thanks for clearing that up!
Re: Krita Foundation in Trouble
#220Just a quick reminder, if everyone here donates just 3-5$, the expenses will be paid in no time :) Krita is a great software, and even though I'm not an artist it's worth supporting.
Thanks for pointing that out. I usually don't donate but did so this time. Is there a list of open source software that is going through similar hardships that need donations?
I'm not in any financial hardship at the moment, but I am looking to stop doing other work and focus more exclusively on WireGuard, so I put up a donation and patreon page: