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Show HN: A REST API for Calculating VAT in the EU

vatmossapi.com

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Re: Show HN: A REST API for Calculating VAT in the EU

#41

Post by Silhouette »

jacquesm wrote: post #31
Silhouette wrote: post #25

Earlier quoted context omitted.

Given that it's specifically for VAT MOSS, presumably it's specifically intended for B2C sales of digital products/services where the MOSS-related place of supply rules apply?

Yes, but the customer isn't always a consumer, so in that case you get a lot of extra burden: pull in the VAT number of the consumer, verify it and if it is correct make the sale without VAT, otherwise make the sale with VAT. If you don't do that properly you're either leaving money on the table or you could be later charged with the difference. Note that under VATMOSS any of the tax adminstrators in the EU has the r…

Yes, but the customer isn't always a consumer, so in that case you get a lot of extra burden: pull in the VAT number of the consumer, verify it and if it is correct make the sale without VAT, otherwise make the sale with VAT.

Yes, but such sales are outside the scope of the VAT MOSS scheme.

Note that under VATMOSS any of the tax adminstrators in the EU has the right to audit you so it really pays off to do this well.

We're well aware of this. We spent a great deal of time trying to implement a fully compliant system when the new rules came into effect, and we were still among the first businesses to get one of the fake demands for money never owed because apparently with our vast resources as a little family business we were better at getting it right than several national tax authorities with the resources of an entire government behind them. If that isn't a perfect illustration of the impracticality and excessive burden of the current system, I don't know what is.

And it's the 'place of consumption' rather than the 'place of supply'.

No, for digital services and private consumers, it's the place of supply rules that changed:

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

Of course the practical effect of the changes is typically that the place of supply is now treated as the customer's location where previously it was probably the business's location, so perhaps that's what you meant and we're really talking about the same thing here.

Re: Show HN: A REST API for Calculating VAT in the EU

#42

Post by jacquesm »

Silhouette wrote: post #38
jacquesm wrote: post #17

Earlier quoted context omitted.

They did, it's called the VATMOSS portal: https://www.ros.ie/vatmoss-web/vatmoss.html The problem is that it is a pain to use and too labor intensive to be practical.

I'm painfully aware of the EU VAT MOSS system and how it "works"[1], but as far as I can see, that doesn't explain the source for the near-real-time tax rate data being offered here. [1] Obviously it doesn't really work very well at all, and multiple national tax authorities have already been caught sending unjustified threats to many businesses for money they never owed, among other screw-ups.

This is just a lookup table. An actual service should go a lot further to be useful. Note how it does not matter what country the seller is in so that parameter can be ignored. What remains is a - hopefully always up-to-date - lookup table that converts a country code to the highest VAT Rate.

That's hardly worth an API.

Re: Show HN: A REST API for Calculating VAT in the EU

#43

Post by jacquesm »

Silhouette wrote: post #41
jacquesm wrote: post #31

Earlier quoted context omitted.

Yes, but the customer isn't always a consumer, so in that case you get a lot of extra burden: pull in the VAT number of the consumer, verify it and if it is correct make the sale without VAT, otherwise make the sale with VAT. If you don't do that properly you're either leaving money on the table or you could be later charged with the difference. Note that under VATMOSS any of the tax adminstrators in the EU has the r…

Yes, but the customer isn't always a consumer, so in that case you get a lot of extra burden: pull in the VAT number of the consumer, verify it and if it is correct make the sale without VAT, otherwise make the sale with VAT. Yes, but such sales are outside the scope of the VAT MOSS scheme. Note that under VATMOSS any of the tax adminstrators in the EU has the right to audit you so it really pays off to do this well.…

> Yes, but such sales are outside the scope of the VAT MOSS scheme.

So why ask for the country of the seller in the API?

> Of course the practical effect of the changes is typically that the place of supply is now treated as the customer's location where previously it was probably the business's location, so perhaps that's what you meant and we're really talking about the same thing here.

Yes, that's what I meant.

BTW that 'demand for money' also happened to me, it appears that in the first few months of VATMOSS there was a massive cock-up at the Irish department tasked with this leading to a whole pile of nastygrams sent to lots of EU businesses, they never even apologized for that (or sent any follow up saying that they were in error).

Re: Show HN: A REST API for Calculating VAT in the EU

#44

Post by jacquesm »

Silhouette wrote: post #35
mherrmann wrote: post #24

Earlier quoted context omitted.

The source is mentioned at the bottom of the page. Please read the full page before criticising.

I did read the full page. You linked to https://github.com/mpociot/vat-calculator , which appears to be another unofficial third-party source. I mean no disrespect, but you're asking anyone relying on your API to trust you with their business. If you or anyone you rely on makes a mistake then your user will probably be breaking the law and on the hook for any missing tax. Moreover, by the nature of this system, the d…

> If you or anyone you rely on makes a mistake then your user will probably be breaking the law and on the hook for any missing tax.

Yep. And the fines for VAT errors range from 'don't care' to 'existential' depending on the amount and the time before the error was detected.

The biggest danger that I see is what will happen when the rates change.

Re: Show HN: A REST API for Calculating VAT in the EU

#46

Post by Silhouette »

jacquesm wrote: post #39
Silhouette wrote: post #29

Earlier quoted context omitted.

There are variable rates almost everywhere, but this API is specifically about digital sales (where the MOSS system applies) so it will typically be that headline rate that you need anyway. Of course, there's no guarantee that that will always be the case, and to know for sure you need to understand the tax systems of 28 different EU member states. This is (one of many reasons) why the new EU VAT rules have been so c…

Especially for small companies. The cost of compliance can easily outweigh the turnover in countries with few customers and opens you up to being audited on demand by the tax authorities in any country you have customers in.

Indeed. I'm not sure we would have done it if we're realised how much of a pain it was really going to be. I know people running slightly larger businesses (a few employees, turnover in the low millions) who have made similar comments even at their scale. There's certainly a view around that it would be better to simply decline sales to customers in other EU member states, and there was even legal advice being taken on whether this broke other EU rules about discrimination. (The conclusion at that time was that it did not, but obviously take your own legal advice if this is relevant to you.)

To give credit where it's due, the API we're talking about here does aim at one of the significant pain points once you've gone through the hassle of updating your charging, invoicing and reporting systems, which is keeping up with changes for all of those VAT rates. At least once already, a relevant VAT rate has been changed with only one week's notice, which is crazy. Are all businesses really expected to monitor these things on a daily basis, just in case the rate in a country where maybe you don't even have any current customers changes and then someone from that country buys something?

As an aside, if you're selling within the EU, are you sure you're not subject to audit by any tax authority from any EU member state anyway, even if you haven't reported any sales to that country? I haven't checked the exact rules recently, but I remember this was one of the concerns when the new scheme was introduced. In theory, any other tax authority is supposed to contact you via your own national authority under such circumstances, but as I mentioned elsewhere, we know first-hand that this doesn't always happen.

Re: Show HN: A REST API for Calculating VAT in the EU

#47

Post by jacquesm »

mherrmann wrote: post #40
jacquesm wrote: post #37

Earlier quoted context omitted.

Then you should say so on the page or in a separate privacy statement. Transparency about such details is very important in this space.

I'll add it, thanks. This was just a weekend project.

You may also want to drop fields that you don't actually use in the lookup.

Re: Show HN: A REST API for Calculating VAT in the EU

#48

Post by jacquesm »

Silhouette wrote: post #46
jacquesm wrote: post #39

Earlier quoted context omitted.

Especially for small companies. The cost of compliance can easily outweigh the turnover in countries with few customers and opens you up to being audited on demand by the tax authorities in any country you have customers in.

Indeed. I'm not sure we would have done it if we're realised how much of a pain it was really going to be. I know people running slightly larger businesses (a few employees, turnover in the low millions) who have made similar comments even at their scale. There's certainly a view around that it would be better to simply decline sales to customers in other EU member states, and there was even legal advice being taken…

I simply shut down. The VATMOSS nonsense ate up all the profits turning a 350 euro VAT filing into a quarterly mess costing upwards of 1000 euros.

The API could be useful if it is guaranteed to be always up-to-date, but there is no such guarantee, and it makes it impossible as it is coded right now to do anything else but to compute a sale that has just happened rather than a sale which happened at a specific point in time (which is how you should compute the VAT). Edge cases around end-of-year and rate changes will cause all kinds of trouble.

VATMOSS is super annoying to put it mildly and disproportionally hurts small players because it does not have a floor below which it is kept simple.

Re: Show HN: A REST API for Calculating VAT in the EU

#49

Post by Silhouette »

jacquesm wrote: post #43
Silhouette wrote: post #41

Earlier quoted context omitted.

Yes, but the customer isn't always a consumer, so in that case you get a lot of extra burden: pull in the VAT number of the consumer, verify it and if it is correct make the sale without VAT, otherwise make the sale with VAT. Yes, but such sales are outside the scope of the VAT MOSS scheme. Note that under VATMOSS any of the tax adminstrators in the EU has the right to audit you so it really pays off to do this well.…

> Yes, but such sales are outside the scope of the VAT MOSS scheme. So why ask for the country of the seller in the API? > Of course the practical effect of the changes is typically that the place of supply is now treated as the customer's location where previously it was probably the business's location, so perhaps that's what you meant and we're really talking about the same thing here. Yes, that's what I meant. BT…

So why ask for the country of the seller in the API?

I wondered the same thing. I'm not aware of any circumstances under which it would make a difference that are still affected by MOSS.

BTW that 'demand for money' also happened to me

My sympathies. The Irish department reportedly wasn't the only one to mess up like this, either, though it's the only one I've encountered personally so far. In the UK, it was actually HMRC (our own national tax authority) that sent out messages to affected businesses confirming it was an error.

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