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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.”

#61

Post by jccooper »

unreal37 wrote: post #44
thekevan wrote: post #39

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…

"Patreon is the U.S. and not subject to European laws." What makes you think this is true? Why can't Americans play poker online? Why does Amazon have to collect state taxes for states they don't have a physical presence in? Google is forced to censor French and German search results. Facebook is forced to follow EU privacy laws. And on, and on. Having customers in a country means you're doing business in that countr…

"Why can't Americans play poker online?"

American anti-gambling laws.

"Why does Amazon have to collect state taxes for states they don't have a physical presence in?"

Because those states count things like affiliate programs and subsidiary companies as a sales tax "nexus". Amazon tends to kill those programs to avoid being taxable. They only collect sales tax in 24 states.

"Google is forced to censor French and German search results. Facebook is forced to follow EU privacy laws."

Yeah, because they have operations in those countries, and can thus be sued there. Also, perhaps, because they might be blocked in the relevant countries, and would rather stay in those markets.

The EU simply cannot make me collect VAT (or do any other crazy thing they think up), because I'm not in the EU. They can ban me or my services or products in their jurisdiction, or make life hard for my customers in their jurisdiction, which may be enough.

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

#62

Post by cannam »

petercooper wrote: post #54
cannam wrote: post #47

Earlier quoted context omitted.

The rule is about place of supply, so any Patreon user receiving donations from people in the EU is presumably also supposed to register with VATMOSS and collect and pay VAT. Arguably Patreon aren't only abandoning users based in the EU, but users everywhere in the world with patrons there. I say "arguably" because of course I've no idea how that borderline-crazy rule is supposed to be enforced. (And I may be misunde…

every time I account for a digital purchase I make from a US company and mark it down as "zero-rated" for VAT. It's not zero-rated as far as my government is concerned; the seller just didn't bother to charge the VAT and as the buyer it's not my problem. Except that as soon as you became a VAT registered business it legally became your problem ;-) You have to "reverse charge" the VAT for those non-EU supplies and inc…

Gosh, glad I posted! Thanks!

The reverse charge as described there is for services rather than goods, though. How does it work with goods, and specifically digital goods like downloads of the sort that VATMOSS applies to? I'm quite sure sellers of such goods from outside the EU to within it are expected to use VATMOSS, does that mean there is no corresponding expectation to reverse charge?

I clearly need to do quite a bit more reading!

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

#63

Post by petercooper »

cannam wrote: post #62
petercooper wrote: post #54

Earlier quoted context omitted.

every time I account for a digital purchase I make from a US company and mark it down as "zero-rated" for VAT. It's not zero-rated as far as my government is concerned; the seller just didn't bother to charge the VAT and as the buyer it's not my problem. Except that as soon as you became a VAT registered business it legally became your problem ;-) You have to "reverse charge" the VAT for those non-EU supplies and inc…

Gosh, glad I posted! Thanks! The reverse charge as described there is for services rather than goods, though. How does it work with goods, and specifically digital goods like downloads of the sort that VATMOSS applies to? I'm quite sure sellers of such goods from outside the EU to within it are expected to use VATMOSS, does that mean there is no corresponding expectation to reverse charge? I clearly need to do quite…

VATMOSS has no relevance to B2B transactions (luckily!) but international businesses providing digital services to EU customers above a certain amount have been technically required to register since around 2003 - see http://www.taxamo.com/european-vat-on-e-services/ - this is why some US Web hosting providers will charge you VAT, but most (about 1% allegedly!) don't (and, I personally feel, they shouldn't).

The other issue is I don't believe there's any such thing as digital goods - they're considered electronically supplied services. Things like Web hosting are included in this. I'm not sure what purchases you're making from the US, but in my case things like Web hosting, Mailchimp, Pluralsight, videos, etc. all of these are e-services that I have to reverse charge.

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

#64

Post by cannam »

petercooper wrote: post #63
cannam wrote: post #62

Earlier quoted context omitted.

Gosh, glad I posted! Thanks! The reverse charge as described there is for services rather than goods, though. How does it work with goods, and specifically digital goods like downloads of the sort that VATMOSS applies to? I'm quite sure sellers of such goods from outside the EU to within it are expected to use VATMOSS, does that mean there is no corresponding expectation to reverse charge? I clearly need to do quite…

VATMOSS has no relevance to B2B transactions (luckily!) but international businesses providing digital services to EU customers above a certain amount have been technically required to register since around 2003 - see http://www.taxamo.com/european-vat-on-e-services/ - this is why some US Web hosting providers will charge you VAT, but most (about 1% allegedly!) don't (and, I personally feel, they shouldn't). The othe…

Mmm yes, seems even the VATMOSS docs on gov.uk refer to services where I might think of goods. By goods I had in mind things like software licences, rather than hosting etc, but it seems those are services too.

(I am basically a relatively high-functioning example of the sort of idiot HMRC are going to have to deal with now -- clueless and fumbling but determined to do the proper thing thoroughly, and without an accountant because I'm only likely to be filing for a few quid a quarter anyway)

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

#65

Post by polimorfico »

heidijavi wrote: post #60
polimorfico wrote: post #45

If you're using Stripe or Paypal, you can use Quaderno ( https://quaderno.io ). We're #VATMOSS complaint and help you to calculate VAT rates and track all the customer location evidences. Let me know if you have any questions.

What if I need to do some extra customization or if I want to disclose the final amount to my customers, do you offer something like that?

Sure! Everything is customisable.

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

#66

Post by Silhouette »

7952 wrote: post #40
Silhouette wrote: post #32

Earlier quoted context omitted.

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.

It would certainly help to have basic things like a standard, reliable place to find all the relevant tax rates in a sensible machine-readable form and a way to get notifications automatically and in good time if any rate is going to change.

That said, a lot of the madness appears to come directly from the EU rules themselves. Here in the UK, after dropping the ball initially, it seems like HMRC (the national tax collection agency) is trying to be helpful for smaller businesses who have been caught in the cross-fire between big businesses and governments. However, it's already clear that HMRC themselves have limited authority to act unilaterally, and ultimately they are required to enforce the tax rules given to them from above. The situation will only be fixed when European level government realises how badly it's screwed up, but right now they're more concerned with things like whether Greece is going to leave the Eurozone and potentially lead to a collapse in the Eurozone itself, so I'm not sure anyone is really listening as, ironically, they systematically undermine the very free trade that the predecessors of the EU were originally supposed to encourage.

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

#68

Post by petercooper »

cannam wrote: post #64
petercooper wrote: post #63

Earlier quoted context omitted.

VATMOSS has no relevance to B2B transactions (luckily!) but international businesses providing digital services to EU customers above a certain amount have been technically required to register since around 2003 - see http://www.taxamo.com/european-vat-on-e-services/ - this is why some US Web hosting providers will charge you VAT, but most (about 1% allegedly!) don't (and, I personally feel, they shouldn't). The othe…

Mmm yes, seems even the VATMOSS docs on gov.uk refer to services where I might think of goods. By goods I had in mind things like software licences, rather than hosting etc, but it seems those are services too. (I am basically a relatively high-functioning example of the sort of idiot HMRC are going to have to deal with now -- clueless and fumbling but determined to do the proper thing thoroughly, and without an acco…

I know how you feel, I've been there :-) Annoyingly, I enjoy reading laws and laundry lists of arcane rules, so have a "reasonable" understanding of VAT law now and, yes, it's HORRIBLE and frequently contradicts itself (as does HMRC generally).

The other annoying thing is many accountants are not familiar with the nuances of Internet based or digital businesses, particularly those that deal with overseas customers, so knowing the basics yourself is essential unless you get lucky (I've realized it's sorta like asking a back-end C developer a front-end JavaScript question - they have the skills to try and look it up, but it's not necessarily going to be the best advice).

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

#69

Post by unreal37 »

jccooper wrote: post #61
unreal37 wrote: post #44

Earlier quoted context omitted.

"Patreon is the U.S. and not subject to European laws." What makes you think this is true? Why can't Americans play poker online? Why does Amazon have to collect state taxes for states they don't have a physical presence in? Google is forced to censor French and German search results. Facebook is forced to follow EU privacy laws. And on, and on. Having customers in a country means you're doing business in that countr…

"Why can't Americans play poker online?" American anti-gambling laws. "Why does Amazon have to collect state taxes for states they don't have a physical presence in?" Because those states count things like affiliate programs and subsidiary companies as a sales tax "nexus". Amazon tends to kill those programs to avoid being taxable. They only collect sales tax in 24 states. "Google is forced to censor French and Germa…

"American anti-gambling laws."

It's more than that. The U.S. actually prosecuted executives of foreign online gaming companies for providing services to U.S. citizens. The problem is not that American citizens fall under U.S. law, but foreign companies have to follow U.S. law for online only services as well. [1]

[1] http://en.wikipedia.org/wiki/David_Carruthers

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