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EU’s New VAT Rules Could Create a Mess for Startups

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Re: EU’s New VAT Rules Could Create a Mess for Startups

#91

Post by lmm »

MistahKoala wrote: post #39
mahouse wrote: post #23

Earlier quoted context omitted.

> I'm almost considering shutting down sales to EU customers. Then someone will launch a business that will do the same you do, but complying with regulations. Taxes must be collected; without taxes, the welfare state collapses. You should know that, to be able to sell something in a market, you must understand its regulations first, and respect the decisions the citizens have taken (in this case, regarding taxes) th…

> respect the decisions the citizens have taken (in this case, regarding taxes) through democratic ways Except the citizens haven't taken that decision: the unelected European Commission has. We could probably go down the reductio ad absurdum road of highlighting their appointment by someone who got elected somewhere along the way, but this powerful body is in no way directly accountable to citizens. Some of the Brit…

The EC is appointed by elected national governments, no different from how the US President is appointed by the elected Electoral College. Governments who have chosen unpopular candidates have suffered for it in their national elections. Accountability may be indirect, but it is there.

Re: EU’s New VAT Rules Could Create a Mess for Startups

#92

Post by adekmm »

I'm running SaaS startup in UE (in Poland). Because of these VAT changes, and also some consumer rights changes, I've decided to restrict my service to use only by companies.

I's not worth to me to update system to verify consumer address, create invoices with more than 10 possible vat rates and do additional accounting work.

If I would have a lot of B2C consumers, I'd just incorporate in US or other non-EU country for this. I could offer them cheaper service (no VAT) and I would have much less work to do.

Re: EU’s New VAT Rules Could Create a Mess for Startups

#93

Post by lmm »

mootothemax wrote: post #38

Is the long-term outcome looking like, one day, twenty years from now, we'll be collecting every last sales tax based on where the customer is right this very second ? It seems a bit unfair for the EU to demand e.g. US-based sites to collect VAT, and there not being anything going in the opposite direction.

> Is the long-term outcome looking like, one day, twenty years from now, we'll be collecting every last sales tax based on where the customer is right this very second?

Maybe. If our system is smooth enough to handle it then why not?

Alternately one can hope we will finally abolish the nation-state and just collect tax in a unified international way.

> It seems a bit unfair for the EU to demand e.g. US-based sites to collect VAT, and there not being anything going in the opposite direction.

Plenty of US states have similar laws that you're supposed to collect sales tax for customers in that state even if you're a website selling from elsewhere.

Re: EU’s New VAT Rules Could Create a Mess for Startups

#94

Post by adwf »

Here's the gist of it for UK startups as I understand it:

1) If you're already VAT registered, this isn't really adding much work. Just track IP address and credit card address for the sale (you probably are anyway). Your accountant can take care of the rest.

2) App store sales are unaffected as long as they are collecting the VAT for you. As far as I know, both Google and Apple do this.

3) If you are not VAT registered and are under the threshold of £81k/yr. You have two choices: Register and go through all the compliance (this is a pain).

Or don't register, then block all non-UK EU countries from buying. You can still accept UK and other countries such as the USA, but the moment you make a cross-border transaction into the EU, you will have to register for VAT, start charging VAT and filing quarterly reports.

I assume that other countries with VAT thresholds will be similar, don't sell to EU countries other than your own and you should be fine. Although obviously check with your accountant first!

Re: EU’s New VAT Rules Could Create a Mess for Startups

#95

Post by adventured »

dragonwriter wrote: post #79
adventured wrote: post #64

Earlier quoted context omitted.

I don't recall the US DOJ using anti-trust laws to attempt to force a European or Asian company to be split. Can you provide examples of that?

> I don't recall the US DOJ using anti-trust laws to attempt to force a European or Asian company to be split. The European Parliament passing a non-binding resolution recommending that the European Commission take seek a certain goal as part of a remedy if its concerns aren't otherwise resolved in an ongoing proceeding is not analogous to the US DOJ actually seeking a particular remedy in a proceeding.

If the European Commission is seeking as an end goal to force Google to split its business, on anti-competitive concerns, then that is similar to what the DOJ does with anti-trust enforcement. The intent is the same: to see business X split. The DOJ's domestic powers are far greater than the EU Commission's ability to impact Google, but that's not for lack of wanting to.

My point stands regardless. Show me where the United States Government attempts to force major European or Asian companies to split into pieces. I'd love to see numerous examples of the US Government doing what the EU Commission is doing.

Re: EU’s New VAT Rules Could Create a Mess for Startups

#96

Post by bojanz »

bartkappenburg wrote: post #28

Luckily we've found this: "Super simple (static) web service to grab VAT rates for all EU Member States, in preparation of the new 2015 VAT regulation." See: https://github.com/modmore/euvatrates.com We've used this (for http://www.voyando.com ) to change our software (ie. replaced a static VAT-variable for EU countries to a dynamic one based on what customers filled in during sign up). It was no more than 4 hours of…

We've also started creating a dataset as a part of our more broad-reaching PHP library: https://github.com/commerceguys/tax

Re: EU’s New VAT Rules Could Create a Mess for Startups

#97

Post by MistahKoala »

mahouse wrote: post #53
MistahKoala wrote: post #39

Earlier quoted context omitted.

> respect the decisions the citizens have taken (in this case, regarding taxes) through democratic ways Except the citizens haven't taken that decision: the unelected European Commission has. We could probably go down the reductio ad absurdum road of highlighting their appointment by someone who got elected somewhere along the way, but this powerful body is in no way directly accountable to citizens. Some of the Brit…

The EC is unelected? Please, educate yourself.

Remind me how citizens voted for it?

Re: EU’s New VAT Rules Could Create a Mess for Startups

#98

Post by MistahKoala »

rmc wrote: post #51
MistahKoala wrote: post #39

Earlier quoted context omitted.

> respect the decisions the citizens have taken (in this case, regarding taxes) through democratic ways Except the citizens haven't taken that decision: the unelected European Commission has. We could probably go down the reductio ad absurdum road of highlighting their appointment by someone who got elected somewhere along the way, but this powerful body is in no way directly accountable to citizens. Some of the Brit…

The citizens voted for national parliaments who appointed the EC, and support the EC.

Like I said: reductio ad absurdum.

Re: EU’s New VAT Rules Could Create a Mess for Startups

#99

Post by MistahKoala »

raverbashing wrote: post #82
flexie wrote: post #55

Earlier quoted context omitted.

Indeed. And if they then put the VAT rate at 0 it would hurt businesses even less ;-)

Consumers pay VAT, not business. Similar to the sales tax in the US/Canada

Businesses in the UK which aren't VAT-registered certainly pay VAT.

Re: EU’s New VAT Rules Could Create a Mess for Startups

#100

Post by adventured »

lmm wrote: post #91
MistahKoala wrote: post #39

Earlier quoted context omitted.

> respect the decisions the citizens have taken (in this case, regarding taxes) through democratic ways Except the citizens haven't taken that decision: the unelected European Commission has. We could probably go down the reductio ad absurdum road of highlighting their appointment by someone who got elected somewhere along the way, but this powerful body is in no way directly accountable to citizens. Some of the Brit…

The EC is appointed by elected national governments, no different from how the US President is appointed by the elected Electoral College. Governments who have chosen unpopular candidates have suffered for it in their national elections. Accountability may be indirect, but it is there.

In fact it is different from how the US President is elected.

The electoral college doesn't get to choose any person for President. It's a direct correlation vote: do this, get that result. Such is not true with EC appointments. You vote for a national government, then you pray they appointment an EC that you favor, but there is no legally required direct correlation that says they have to appoint X person. You make that point within your own post (where you note that governments who have chosen unpopular candidates suffer), contradicting your claim that it's just like how the US President is elected.

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