EU’s New VAT Rules Could Create a Mess for Startups
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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
#2Previous discussion from a few hours ago: https://news.ycombinator.com/item?id=8657074
Re: EU’s New VAT Rules Could Create a Mess for Startups
#3This is no joke. When I hired my business's first employee here in Kentucky, the crush of fees, rules and paperwork that came along with her were jaw-dropping. All of a sudden, the government - especially the school board and local agencies - were mailing us with their hands out. Having that first employee triggered things like sales tax forms, quarterly filing requirements, payroll questionnaires, etc. I began to feel that that employee I hired (an office manager) spent 50% of her time trying to make sense of all the new requirements we had because she was hired.
That business eventually went south and now I know better. I will never hire anyone again until the money is flowing in the door at a speed I simply can't keep up with.
Re: EU’s New VAT Rules Could Create a Mess for Startups
#4This law seems so complex. A small company would have to account for 75 different VATs? I don't necessarily disagree with the idea that the VAT money should go to the country where the buyer is, but the amount of VATs you'd have to account for makes this a very complex rule.
Now, if EU had a unique VAT across all countries, things would go much smoother. I also think it would help a lot to turn EU into a more unified single market, much like US is.
Re: EU’s New VAT Rules Could Create a Mess for Startups
#5This law seems so complex. A small company would have to account for 75 different VATs? I don't necessarily disagree with the idea that the VAT money should go to the country where the buyer is, but the amount of VATs you'd have to account for makes this a very complex rule. Now, if EU had a unique VAT across all countries, things would go much smoother . I also think it would help a lot to turn EU into a more unifie…
75 different VAT rates is a bit of an overestimate: In general, there are different VAT rates for different product (books/food at 7%, entertainment at 19% etc.), but one business usually one sells one sort of product, so you only have to find and track 27-or-so different rates (:
Of course, ideally, we would have the same rate across the entire EU for a given product category, but even then it might make sense to find some way to move it from the business’ country to the customers’ country, given that it is not intended as a tax to fund business operation but the cost of a given population of customers.
Re: EU’s New VAT Rules Could Create a Mess for Startups
#6This law seems so complex. A small company would have to account for 75 different VATs? I don't necessarily disagree with the idea that the VAT money should go to the country where the buyer is, but the amount of VATs you'd have to account for makes this a very complex rule. Now, if EU had a unique VAT across all countries, things would go much smoother . I also think it would help a lot to turn EU into a more unifie…
75 different VAT rates is a bit of an overestimate: In general, there are different VAT rates for different product (books/food at 7%, entertainment at 19% etc.), but one business usually one sells one sort of product, so you only have to find and track 27-or-so different rates (: Of course, ideally, we would have the same rate across the entire EU for a given product category, but even then it might make sense to fi…
You do need to know whose rate you applied. Even if the UK and the French rate are the same, you need to know whether you charged the UK rate or the French rate, and they might change and get out of sync on different dates. So you gain nothing with the fact that some percentages match.
Re: EU’s New VAT Rules Could Create a Mess for Startups
#7They will also have to hold that data for 10 years under the Data Protection Act.
In the UK, 'accounts and records' that form a core part of the business's function (such as tax or compliance records, or even records for delivering a product to a customer) are exempt and do not require a Data Protection Act registration. There are many other reasons why you may need to be registered, of course, and the ICO have a useful online test to see if you do: http://ico.org.uk/for_organisations/data_protection/registra...
It should also be mentioned the changes only apply to B2C sales, not B2B.
Re: EU’s New VAT Rules Could Create a Mess for Startups
#8This is no joke. When I hired my business's first employee here in Kentucky, the crush of fees, rules and paperwork that came along with her were jaw-dropping. All of a sudden, the government - especially the school board and local agencies - were mailing us with their hands out. Having that first employee triggered things like sales tax forms, quarterly filing requirements, payroll questionnaires, etc. I began to fe…
How does hiring someone in Kentucky become more difficult due to European Union VAT documentation rules?
Re: EU’s New VAT Rules Could Create a Mess for Startups
#9This will eventually increase the price of digital goods or decrease it's quality. The problem is VAT. This is another advantage for VAT-free USA startups. ¿Maybe this will also give an impulse to cryptocurrencies in EU?
Re: EU’s New VAT Rules Could Create a Mess for Startups
#10They will also have to hold that data for 10 years under the Data Protection Act. In the UK, 'accounts and records' that form a core part of the business's function (such as tax or compliance records, or even records for delivering a product to a customer) are exempt and do not require a Data Protection Act registration. There are many other reasons why you may need to be registered, of course, and the ICO have a use…
One case that isn't clear yet for me is: even if you sell in B2B only, does this new reform apply if the buyer cannot (or does not, for some reason) provide a valid VAT number.