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Patreon to Europe on #VATMOSS: “Not our problem, mate.”

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Re: Patreon to Europe on #VATMOSS: “Not our problem, mate.”

#31

Post by Kalium »

jessedhillon wrote: post #27
nostromo wrote: post #19

Earlier quoted context omitted.

"Simply keep abreast of all tax laws and jurisdictions on planet Earth and pay accordingly. It couldn't be simpler..."

It truly is complicated. If only there were some kind of service, to whom one would pay a service fee perhaps, and who in return could promote your work, then collect and aggregate small, recurring payments from international payers while properly computing the tax liability. Some kind of intermediary which enabled people to patronize artists, such that millions of artists around the world can simply pick up a check…

Sounds like you have a new yc startup on your hands.

Re: Patreon to Europe on #VATMOSS: “Not our problem, mate.”

#32

Post by Silhouette »

stuaxo wrote: post #17
simplyinfinity wrote: post #12

So basically .. we have the freedom of the internet ... buut we can't do business on the internet unless we hire 20 accountants 5 accounting managers, 2 layers and we will still be limited to just working within europe?

Not really - just keep a table of the vat rates and pay the relevant one.

just keep a table of the vat rates and pay the relevant one.

It isn't even close to that simple. It should be, but because of the record-keeping and reporting requirements, tax thresholds (or lack of them), general overheads of being as familiar with 28 states' tax systems rather than just one, and failure to provide sensible systems and advice by governments on a scale that would bring most businesses to failure, it just isn't.

The EU's own web site about this specific issue -- which is widely cited by everyone up to and including national tax authorities in member states -- didn't even have correct VAT rates listed for all member states on 1 January 2015 when the new rules came in. I don't mean figuring out whether a business's particular digital product or service qualifies for a special rate in some states. I mean just the headline figures for the standard VAT rates in each state.

Re: Patreon to Europe on #VATMOSS: “Not our problem, mate.”

#33

Post by sp332 »

belorn wrote: post #24

I thought patreon was a donation based service, as in "I give you money so you can continue to create" rather than "I give you money in exchange of services or goods". Is patreon one of them or both, and how do I know when looking at someones patreon page?

They do both. On the left you can see "milestones", which are general project goals. But at the bottom, some of the pledge levels have specific rewards to the backer.

Re: Patreon to Europe on #VATMOSS: “Not our problem, mate.”

#34

Post by jerf »

peterarmstrong wrote: post #26
jerf wrote: post #23

Earlier quoted context omitted.

Would you be willing to share approximately what it costs you? I saw your post here and deleted-before-posting speculation that Patreon simply can't make the numbers sensibly work out (bearing in mind they have to grow by offering an attractive package to both those who donate and create; if, for instance, 50% of the "donations" go into tax compliance there simply won't be any donations anyhow), but if we can get rea…

We integrated Taxamo ( http://www.taxamo.com/ ) into Leanpub, and their posted fees ( http://www.taxamo.com/pricing/ ) start at 20 Euro cents for every EU transaction. Non-EU transactions are free. In terms of detecting whether the transaction is EU or not, there's a complicated workflow with 3 pieces of evidence etc, but (a) that's what Taxamo helps with and (b) if a bootstrapped Canadian startup can deal with this,…

Thank you.

Re: Patreon to Europe on #VATMOSS: “Not our problem, mate.”

#35

Post by pyre »

zaroth wrote: post #22

"Aside from the hideous administrative burden Patreon has now forced onto their European users..." Hyperbolic much? Way to blame Patreon for the arduous EU tax policy.

It may be a bit of hyperbole, but they are basically abandoning their EU users. It's a lot more arduous for individual content creators to track down and store VAT information for hundreds of $5 purchases than it is for the marketplace enabling those purchases to do so.

Why not just cut-off EU users?

Re: Patreon to Europe on #VATMOSS: “Not our problem, mate.”

#36

Post by idea15webdesign »

slowmovintarget wrote: post #28
pluma wrote: post #20

Earlier quoted context omitted.

You mean all the unnecessary paperwork for every EU member state affected by the VAT changes? And it's of course entirely reasonable to expect your users to know that they have to do the paperwork for contributions in the 1-10 dollar range themselves without ever explicitly telling them. I'm not even sure that level of information is available to the users. If I were being funded on Patreon, would I have to get in to…

Why is it reasonable to expect Patreon to manage compliance and liability for such a law? If the EU wants to destroy commerce, that should be within the province of its citizens to address... oh wait. There's the problem.

Because that's what EU law, and its member states, have decreed. For example, here is the guidance from HMRC in the UK.

https://www.gov.uk/government/publications/vat-supplying-dig...

Per this law, the third party marketplace/gateway is responsible for compliance and liability. That is how everyone in the EU affected by the law views it, and it is why most marketplaces and platforms are slowly but surely coming into compliance.

This particular marketplace, on the other hand, hired a consultancy firm whose raison d'etre is tax avoidance http://www.bbc.co.uk/news/business-31147276, who proceeded to give them what they paid for. That tax advice was so incredibly wrong it was almost laughable; it misrepresented the "place of supply", the fundamental piece of information behind the entire continental tax change. https://idea15.wordpress.com/2015/01/20/vatmoss-place-of-ser...

This issue is not a question of extraterritorial sovereignty or individual responsibility. It's about dodgy tax advisors giving dodgy advice to a company which paid good money for it.

Re: Patreon to Europe on #VATMOSS: “Not our problem, mate.”

#37

Post by idea15webdesign »

zaroth wrote: post #22

"Aside from the hideous administrative burden Patreon has now forced onto their European users..." Hyperbolic much? Way to blame Patreon for the arduous EU tax policy.

I forgot to include the part where every EU creator will also be obliged to register as a data controller with their national data protection authority, to ensure proper reportage and archiving of the VAT invoices which must be kept in a retrievable format for 10 years.

Compliant marketplaces take care of that for you so that the individual seller/creator does not have to register as a data controller.

Re: Patreon to Europe on #VATMOSS: “Not our problem, mate.”

#38

Post by idea15webdesign »

belorn wrote: post #24

I thought patreon was a donation based service, as in "I give you money so you can continue to create" rather than "I give you money in exchange of services or goods". Is patreon one of them or both, and how do I know when looking at someones patreon page?

Even their own tax page (linked to below) says that donations are considered earned income. HMRC does not care where it comes from or what it's called. It's income.

Re: Patreon to Europe on #VATMOSS: “Not our problem, mate.”

#39

Post by thekevan »

Patreon is the U.S. and not subject to European laws.

Patreon is also really just a distributor of money, they don't provide the person with a service.

Why is a person with a web design business looking to use a site used to help artists who have trouble connecting art and normal business income?

Finally she tweeted about how many people saw that blog post and said she should have included a tip jar. It really seems like she cares more about what she can get out of a situation than anything else.

Re: Patreon to Europe on #VATMOSS: “Not our problem, mate.”

#40

Post by 7952 »

Silhouette wrote: post #32
stuaxo wrote: post #17

Earlier quoted context omitted.

Not really - just keep a table of the vat rates and pay the relevant one.

just keep a table of the vat rates and pay the relevant one. It isn't even close to that simple. It should be, but because of the record-keeping and reporting requirements, tax thresholds (or lack of them), general overheads of being as familiar with 28 states' tax systems rather than just one, and failure to provide sensible systems and advice by governments on a scale that would bring most businesses to failure, it…

I guess the difficulty will depend a lot on how helpful the local tax agency are. They should publish that kind of information to help their countries business's.
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