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Trade Dollars with other startups. Book it as revenue

revswap.ai

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Re: Trade Dollars with other startups. Book it as revenue

#91

Post by osullip »

Swizec wrote: post #27

Services in kind is a pretty common business practice. You see this a lot at the SMB level especially outside of the US. Small businesses are cash strapped. So you find someone who needs your services and you need their services. Instead of exchanging cash, you exchange invoices and do the work. You build them, say, a $5000 website, they perform, say, $5000 of landscaping. At big boy levels this is often structured a…

In Australia these kind of deals are treated like income.

https://www.ato.gov.au/businesses-and-organisations/gst-exci...

I am sure people avoid the tax element this way, but it's not a sustainable way to go.

Let's say I do a website for $5,000 (putting aside that this a dead industry, and my career for the past 20 years) and the landscaper comes to do the work at my house.

If he cuts a powerline, falls down a hole or chops off his hand, we have a big insurance problem. No paperwork, no contract.

I have had friends who did their side of the contra deal and never got the other part of the bargain fulfilled.

Things like 'I'll paint your house if you can help fix up this old car of mine.'

I have turned down these deals in the past. Same as someone asking me to work for free for 'exposure'.

I am not having a go at the comment above as I think the point is valid - small business doing this is fraud, big business do it and it's fine.

Just my advice to anyone thinking it might work for them. Send the invoice, do the work, get paid in money.

Re: Trade Dollars with other startups. Book it as revenue

#92

Post by RobotToaster »

0xffany wrote: post #35
RobotToaster wrote: post #29

Anyone else getting "SSL_ERROR_NO_CYPHER_OVERLAP"

Visiting the website's url (revswap.ai without www) redirects me to revai.com which is for sale on godaddy... Fastest enshittification ever?

Maybe the IRS didn't get like the joke?

Re: Trade Dollars with other startups. Book it as revenue

#93

Post by whynotmaybe »

gaiagraphia wrote: post #43
jwr wrote: post #8

I find this amusing: I'm from Poland, where after the VAT tax was introduced in the 1990s, there were famous "VAT carousel" crimes, with people ending up in prison. The basic idea was similar, except you also collected VAT refunds from the state. If you search for "vat carousel" today, it seems this is still a thing.

VAT is a joke of a tax. It's quite incredible why the government concerns itself with chasing people's accounts around. What a waste. If something can't be monitored with minimal effort, it only serves to enrich the legal/accountancy/hr/admin priest caste. The amount of labour wasted on moving numbers around numbers is staggering. edit: Between the government and businesses, VAT costs 5% in admin fees to raise. In a…

Source for the "5%"?

Re: Trade Dollars with other startups. Book it as revenue

#94

Post by [deleted] »

osullip wrote: post #91
Swizec wrote: post #27

Services in kind is a pretty common business practice. You see this a lot at the SMB level especially outside of the US. Small businesses are cash strapped. So you find someone who needs your services and you need their services. Instead of exchanging cash, you exchange invoices and do the work. You build them, say, a $5000 website, they perform, say, $5000 of landscaping. At big boy levels this is often structured a…

In Australia these kind of deals are treated like income. https://www.ato.gov.au/businesses-and-organisations/gst-exci... I am sure people avoid the tax element this way, but it's not a sustainable way to go. Let's say I do a website for $5,000 (putting aside that this a dead industry, and my career for the past 20 years) and the landscaper comes to do the work at my house. If he cuts a powerline, falls down a hole o…

[deleted]

Re: Trade Dollars with other startups. Book it as revenue

#95

Post by RobotToaster »

osullip wrote: post #91
Swizec wrote: post #27

Services in kind is a pretty common business practice. You see this a lot at the SMB level especially outside of the US. Small businesses are cash strapped. So you find someone who needs your services and you need their services. Instead of exchanging cash, you exchange invoices and do the work. You build them, say, a $5000 website, they perform, say, $5000 of landscaping. At big boy levels this is often structured a…

In Australia these kind of deals are treated like income. https://www.ato.gov.au/businesses-and-organisations/gst-exci... I am sure people avoid the tax element this way, but it's not a sustainable way to go. Let's say I do a website for $5,000 (putting aside that this a dead industry, and my career for the past 20 years) and the landscaper comes to do the work at my house. If he cuts a powerline, falls down a hole o…

I think the fact that it's treated as income is the point.

My company builds your company a website, and "charge" $1,000,000 for it.

Your company mows my company's lawn and "charge" $1,000,000 for it.

Both companies now have $1,000,000 in revenue from this transaction.

Re: Trade Dollars with other startups. Book it as revenue

#97

Post by TZubiri »

Swizec wrote: post #27

Services in kind is a pretty common business practice. You see this a lot at the SMB level especially outside of the US. Small businesses are cash strapped. So you find someone who needs your services and you need their services. Instead of exchanging cash, you exchange invoices and do the work. You build them, say, a $5000 website, they perform, say, $5000 of landscaping. At big boy levels this is often structured a…

And the part that would make it fraud (in some contexts, especially publicly traded and international corp struturing for tax purposes) would be overvaluing the services.

Re: Trade Dollars with other startups. Book it as revenue

#98

Post by derriz »

gaiagraphia wrote: post #43
jwr wrote: post #8

I find this amusing: I'm from Poland, where after the VAT tax was introduced in the 1990s, there were famous "VAT carousel" crimes, with people ending up in prison. The basic idea was similar, except you also collected VAT refunds from the state. If you search for "vat carousel" today, it seems this is still a thing.

VAT is a joke of a tax. It's quite incredible why the government concerns itself with chasing people's accounts around. What a waste. If something can't be monitored with minimal effort, it only serves to enrich the legal/accountancy/hr/admin priest caste. The amount of labour wasted on moving numbers around numbers is staggering. edit: Between the government and businesses, VAT costs 5% in admin fees to raise. In a…

VAT is trivial for businesses to deal with. You add x% onto every invoice you issue. The VAT due to be paid to the government is a simple sum of the amounts distinctly shown on each invoice you issue minus the sum of the VAT amounts on invoices you’ve paid. Income/employment taxes, corporate tax, import taxes, etc are orders of magnitudes more complex, dynamic and subject to legal interpretation. I was a small business owner for a while years ago and did the VAT myself. But there was no way I would even attempt employment or corporation taxes - covered by endless legislation and changing every year - that was a job for the accountant.

Re: Trade Dollars with other startups. Book it as revenue

#99

Post by osullip »

RobotToaster wrote: post #95
osullip wrote: post #91

Earlier quoted context omitted.

In Australia these kind of deals are treated like income. https://www.ato.gov.au/businesses-and-organisations/gst-exci... I am sure people avoid the tax element this way, but it's not a sustainable way to go. Let's say I do a website for $5,000 (putting aside that this a dead industry, and my career for the past 20 years) and the landscaper comes to do the work at my house. If he cuts a powerline, falls down a hole o…

I think the fact that it's treated as income is the point. My company builds your company a website, and "charge" $1,000,000 for it. Your company mows my company's lawn and "charge" $1,000,000 for it. Both companies now have $1,000,000 in revenue from this transaction.

Yeah, I agree. If all transactions are reported and treated like a sale.

I just have personal experience where the person offering from one side often wants to avoid the tax. In Australia we have 10% GST/VAT. Pay someone and there is 30% payrol tax (even as a sole trader). Then 12% mandatory pension contribution.

So the $5000 website/landscaping turns into 3k cash in hand.

Enticing to avoid this if you can, but I am risk adverse - clients pay me off the back of this. It balances the risk appetite of a business owner who could cut corners, with me sayng not to. If they do, at least I made the risk clear.

But your point is valid and correct. There is nothing wrong with contra deals where it's booked properly.

Re: Trade Dollars with other startups. Book it as revenue

#100

Post by stephen_cagle »

gaiagraphia wrote: post #43
jwr wrote: post #8

I find this amusing: I'm from Poland, where after the VAT tax was introduced in the 1990s, there were famous "VAT carousel" crimes, with people ending up in prison. The basic idea was similar, except you also collected VAT refunds from the state. If you search for "vat carousel" today, it seems this is still a thing.

VAT is a joke of a tax. It's quite incredible why the government concerns itself with chasing people's accounts around. What a waste. If something can't be monitored with minimal effort, it only serves to enrich the legal/accountancy/hr/admin priest caste. The amount of labour wasted on moving numbers around numbers is staggering. edit: Between the government and businesses, VAT costs 5% in admin fees to raise. In a…

I've multiple times done a minor dive into why a VAT tax is seen as a reasonable tax? It... seems as regressive as a sales tax with even more layers of intervention? I've always eventually lost interest in trying to make sense of it, but they sure seem popular in Europe so there must be something to them?

My current belief is that there should really just be a wealth tax on assets (Federal) and a land value tax on land (States); nothing else.

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