71–80 of 235 posts
> The Foundation was created to be able to have Dmitry work full-time on Krita. Because we sell stuff, the tax inspector has determined that we’re a company, and should have paid VAT in the Netherlands over the work Dmitry has been doing in Russia. Even though there is no VAT in Russia on the kind of work Dmitry is doing. As someone who has dealt with VAT in the EU a bit this sounds really odd to me. Even if the insp…
I would like to leanr from the article, but it is low on facts (I may have overlooked them while reading). What is the relationship between Krita Foundation (Krita) and Dmitry? Is Dmitry an employee to Krita living in Russia? How can there be any VAT involved? Is Dmitry a freelancer who sends invoices to Krita? Do those invoices include VAT? If they do, why does Krita need to pay VAT to Dutch authorities? Does he hav…
Dmitry is a freelancer who lives in Moscow, not an employee. For the kind of work Dmitry does, there is no VAT appliccable in Russia. If the Krita Foundation had been Russian, no VAT would have been applicable. There is no VAT ID on his invoices, but he does send invoices. He also keeps ownership over his work, and the Foundation doesn't tell him what to work on... But since the Krita Foundation is in the Netherlands…
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Really? I always need to charge/pay VAT on services. The only exception is if both are VAT-registered businesses in the EU (but in different member states), in which case you can charge 0% VAT.
We're talking about things imported to the EU from outside the EU. Do you really pay VAT in europe on services you buy in the US? Or in Asia?
You have to declare this. You don't physically pay of course, it's just taken into account for the VAT balance.
That's really sad to hear. With how complex laws are, it's scary that going to a professional may not be sufficient. But when you're totally unfamiliar with what the requirements are what can you do? Do large law/accountancy firms give a guarantee for their advice in the case that it was incorrect?
No, they can be slippery as all hell. Ask a question by e-mail, expect a definitive yes/no answer, instead receive a phone call that's instantly claimed to be "off the record", and receive a parable about a nameless other customer who had this one situation this one time. Chances are the accountancy firm had never set up a charity before and has misunderstood the constraints, and chances are also high that they won't…
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What do you mean? You pay VAT on imported goods. Not on imported services.
You might pay a customs duty on imported goods, but you don't pay VAT.
If this wouldn't apply to services, it would give non-EU suppliers an unfair advantage.
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You are not supporting the software but bad practices resulting in fines and fees. But there's hoping a lesson was learned. It would be a shame if something like this damaged the product.
Getting accounting correct in this kind of situation is just very hard, and sometimes people get it wrong even with due diligence and advice from trained professionals in the field. Saying this is "supporting bad practices" when they are addressing the problems with their set up is IMHO disingenuous. (This kind of problem also illustrates why Mozilla is set up the way it is, with a Foundation and a Corporation. Tax L…
Mozilla is set up that way because they got in trouble with the IRS, and had a tax debt for - if memory serves me well - some years after setting up the corporation.
Taxes and accounting is not easy.
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Dmitry is a freelancer who lives in Moscow, not an employee. For the kind of work Dmitry does, there is no VAT appliccable in Russia. If the Krita Foundation had been Russian, no VAT would have been applicable. There is no VAT ID on his invoices, but he does send invoices. He also keeps ownership over his work, and the Foundation doesn't tell him what to work on... But since the Krita Foundation is in the Netherlands…
Just curious, if Russia has no vat for that service, Dmitry is based in Russia and the sole purpose of the foundation is to support him, why was the foundation set up in the Netherlands and not in russia?
I would like to leanr from the article, but it is low on facts (I may have overlooked them while reading). What is the relationship between Krita Foundation (Krita) and Dmitry? Is Dmitry an employee to Krita living in Russia? How can there be any VAT involved? Is Dmitry a freelancer who sends invoices to Krita? Do those invoices include VAT? If they do, why does Krita need to pay VAT to Dutch authorities? Does he hav…
Dmitry is a freelancer who lives in Moscow, not an employee. For the kind of work Dmitry does, there is no VAT appliccable in Russia. If the Krita Foundation had been Russian, no VAT would have been applicable. There is no VAT ID on his invoices, but he does send invoices. He also keeps ownership over his work, and the Foundation doesn't tell him what to work on... But since the Krita Foundation is in the Netherlands…
Also, ignore critique, most of them never dealt with bureaucracy in EU and native countries. Such a mess.
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If this were the case, wouldn't that person be liable then?
They would need to prove they suffered loss (and an actual error!). That's not clear in this situation. Not paying taxes you were due isn't extra costs due to your accountant, although fines and interests may be.
A: Hey B, how do we have to set up our company/foundation so this doesn't blog up and we have to pay non-sensical taxes only because of the way we are set up?
B: Do it this way: ...
(later)
Z: A, you have to pay taxes because your setup is strange and makes no sense to our rules.
B: Damn, we're liable for the bad advice we gave...
(honest question)
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Splitting a company in two so you can avoid paying taxes is not an attempt to deceive? Is it horrible when Apple uses Ireland to avoid taxes, but OK if KDE does it?
It seems you didn't actually read (or understand) the post: The problem is that - until now - they DIDN'T split it in two, so currently the tax authorities say "you are some kind of mix between company and non-profit, we do whatever we want with you" (obviously simplified, read the post!). But at least they gave them a suggestion for the FUTURE: Split up, you will have no more problems. So, there is no intention to d…