These new rules, while more complicated, are actually more fair (for companies). You now don't compete depending on where your company is based in the EU. Before these rules you applied the VAT based on the country where the company was based.
EU’s New VAT Rules Could Create a Mess for Startups
61–70 of 133 posts
Re: EU’s New VAT Rules Could Create a Mess for Startups
#62This is how we are thinking about implementing this for Perch http://rachelandrew.co.uk/archives/2014/11/20/implementing-t...
I am also collecting links and resources on GitHub http://rachelandrew.github.io/eu-vat/
Re: EU’s New VAT Rules Could Create a Mess for Startups
#63Actually this is not really new. Since 2003 Businesses outside the EU that sell to private (not business) customers in the EU need to pay VAT to an EU member country. This is called VAT on e-Services. Most App Stores (except Google Play) took care of this already but if you did direct sales (e.g. via Paypal, direct payments etc) you need to calculate the tax every quarter and pay it to a member state (which will then…
Isn't the lack of VAT exemption for small businesses also new?
Yes and this is what is the most unsettling part, the TLDR for small businesses is if you don't sell through a marketplace your sod out of luck and now regarding the VAT threshold and need to burden the cost of becoming VAT registered
Re: EU’s New VAT Rules Could Create a Mess for Startups
#64Earlier quoted context omitted.
I’m afraid it looks like you’re wrong Yes and no. Yes the EU authorities would love for the entire world to collect VAT from its citizens. No because the EU has absolutely no way to enforce this worldwide. However, the big fun is coming on Thursday, when the EU is due to rule over Google and politely requesting that Google splits off search from the rest of its business. I believe this decision will be indicative of…
The USA has ordered that big companies be split in the past. It's just the "crazy EU lawmakers".
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?
Re: EU’s New VAT Rules Could Create a Mess for Startups
#65Earlier quoted context omitted.
My point is that increased business documentation rules, no matter the jurisdiction, do have a real impact on the ability of startups to take root and grow.
The end result will be a few large companies and no smaller companies in the marketplace. Barrier to entry will also be difficult. Is less competition and more large companies what we really want?
It's probably not what citizens want, but I tend to believe that governments and the EU wouldn't mind, since I imagine larger companies are easier to identify and control.
Re: EU’s New VAT Rules Could Create a Mess for Startups
#66I can't stress enough how dispiriting this is. If you live in the UK, this law increases the minimum capital outlay for selling any digital good online by a factor of a hundred.
The idea that someone selling a couple of copies of an e-book a year on gumroad should be required to register for VAT is utterly insane.
It's going to create a layer of rent-seeking middlemen and generally make the market less efficient.
Re: EU’s New VAT Rules Could Create a Mess for Startups
#67Earlier quoted context omitted.
The suggested http://euvatrates.com/rates.json and pretty much any EU taxation document uses country code "EL" for Greece while ISO standard and most geolocation APIs use "GR". Just make sure your code doesn't crash because of this :) "GB" vs "UK" for United Kingdom is another one to pay attention to.
It’s about consistence. Name of the Country in it’s own language, abbreviated to 2 letters. Results in EL for Greece, UK for the United Kingdom, etc. GB is an island and has nothing to do with the UK, it’s as if you’d call Japan now Hokkaido, it makes no sense.
Yet, if you look at, let's say https://freegeoip.net/json/linweb.codehoop.com then there's "country_code":"GB","country_name":"United Kingdom" :)
Which is correct, "GB" is ISO 3166 Alpha-2 country code for United Kingdom.
Re: EU’s New VAT Rules Could Create a Mess for Startups
#68As someone who sells digital software licenses, this is quite an baffling situation to experience. Currently, I live in Massachusetts, which does not require collecting sales tax on digital goods. According to these new laws, even though I live in the USA, and don't collect any address information for my customers, I now need to: 1. Collect address and IP address information 2. Register with a MOSS somewhere in the E…
>As someone who sells digital software licenses, this is quite an baffling situation to experience.
>I'm almost considering shutting down sales to EU customers.
Do you have a payment processor (like Fastspring)? If so then they're handling all that ugly mess.
Re: EU’s New VAT Rules Could Create a Mess for Startups
#69Does this also apply to US startups selling into the EU? Does the EU have any legal means to enforce VAT payment if a US startup doesn't have any presence within the EU?
Re: EU’s New VAT Rules Could Create a Mess for Startups
#70Earlier quoted context omitted.
The issue is that I am now subject to collecting taxes for a country that I have nothing to do with. I have never set foot in an EU country, I don't choose to sell to EU customers, they just come to my US-based website and pay in USD. I comply with all of my local tax laws. I can be involved with my local government and affect change. I can't do that in the EU. The way this is all written, I'll actually have to do wo…
Maybe I am missing something but how could you be subject to collecting taxes for a country that you have nothing to do with? AFAIK, EU laws apply to EU entities. If you are not EU citizen and do not own any EU-registered company, how could they have jurisdiction over you?
The US is the same. Software sales into the US (income from a US source) are subject to US taxes. There's some rules about what exactly constitutes a US source, but from my layman reading it sounds like if you market in the US, you may be required to pay.