"On 1 January 2015, a new EU ruling concerning value-added tax (VAT) on telecommunications, broadcasting & electronic services comes into force. It should ensure more fairness in the EU-wide VAT distribution but tremendously affects small one-man-businesses or startups as they commonly exist in the flightsim community. Francois Dumas effectively closed his FSAddon online store yesterday facing the expenditure connected with the new regulation. What you need to know about regulation number 1042 /2013 can be found over at flusinews.de".

So here is a good business idea for someone living in the EU.  Start a company that simplifies the process and handles the back end for all of these small businesses.  Charge a very small fee on all transactions.  

 

 

Charge a very small fee on all transactions

And do what? The market would be so small that people will just simply close shops!  The mandarins in EU did it again, trying to squeeze every bit of tax left and kill all the geese.  

I find this a very strange move, it does indeed appear to make sales incredibly hard. I don't have any knowledge on the topic of the European tax system, but (while it does make sense from the governments' point of view) this seems to be lethal to small vendors.

However, I would like to remind everyone to stay on topic and don't let this become a political discussion!

It depends entirely on what country in the EU you live in. For example in the UK the VAT threshold is above £80,000. Here it depends on the type of work you do. For example for an artist the threshold is EU5,000 for a self employed professional there is no threshold. The Eu is all about common wealth. But vat totally destroys that.  For example an artist in the UK doesn't pay vat for exhibiting etc. (unless of course their artist's income is over the threshold). But for an EU artist wanting to exhibit in the UK there is no threshold. So no commoness there then!

For a self employed professional here the taxes are the highest in Europe. 23% income tax + 22%vat + 28% inps(national insurance for health and pensions)

So your actual income is only 27% !!

I've been expecting this for some time.  For example, the U.S. Govt. is also getting more aggressive when it comes to taxing its businesses that are technically headquartered in another country with a lower tax rate.

 

Many may not know this, but U.S. citizens, no matter where they live in the world, have to pay U.S. taxes. Yes, we have to file tax returns regardless of where we reside. Now, you get a credit for any foreign taxes you pay, but still you must comply with U.S. Govt. tax regulations even if you live in another country.

 

I predict that within the next decade, all G20 nations will have some common tax regulations and policies that allow each country to efficiently tax its companies, citizens, and residents no matter where they reside.

 

The solution to high tax rates that hurt small businesses: vote out the worthless politicians who foist these ridiculously high taxes on their own people.

 

Dave

EU threatens flightsim developers simply isn't true.

The EU is changing the tax rules to cover all sales of digital services (broadcasting, telecommunications and e-services) from a business to a consumer (private individuals and non-business entities).

" . . . However, I would like to remind everyone to stay on topic and don't let this become a political discussion!"

Hmmm . . . So much for that hey Florian!

JJ

Canada also has a lower limit for businesses on collection of our VAT (which we call the GST or HST depending on which province you live in).  I think the lower threshold is $30,000/year.

" . . . However, I would like to remind everyone to stay on topic and don't let this become a political discussion!"

 

Hmmm . . . So much for that hey Florian!

 

JJ

Jean-Jaques, you're right - if this isn't a political discussion then I guess noone knows what this actually is. What I wanted to remind everyone was to keep away from political name-calling, and I had the feeling that the post prior to mine (#3) was coming close to that, but perhaps I'm overly sensitive there?

Anyway, I should perhaps think a little more about what I mean to say and what I end up writing .

EU threatens flightsim developers simply isn't true.

 

The EU is changing the tax rules to cover all sales of digital services (broadcasting, telecommunications and e-services) from a business to a consumer (private individuals and non-business entities).

Granted the new scheme actually "threatens" all small business owners. However, all such hair-splitting aside, the end result remains the same.

Taxes always involves political discussions. Would advise this be brought up in political forum or consult your accountant to find loopholes.

No one is being threatened. The terms of business have changed and any changes, like these, always result in self-pleading about how it's all terribly unfair,  the world will end, and the sky will fall etc etc. Tthe reality is most companies will survive.

The deadline for this change is now only 2 days away -  on 1 January 2015. How many other flight simulator developers have changed their activities - only one as far as I know?
 

So here is a good business idea for someone living in the EU.  Start a company that simplifies the process and handles the back end for all of these small businesses.  Charge a very small fee on all transactions.

Already done:

 

http://www.taxamo.com/

 

Fees are very reasonable, 20 cents per transaction for less than 2000 transactions per month, and less if you do more.

No one is being threatened. The terms of business have changed and any changes, like these, always result in self-pleading about how it's all terribly unfair,  the world will end, and the sky will fall etc etc. Tthe reality is most companies will survive.

Well "duh!", Gerry. Why else would I have put the hyperbole in quotation marks? Must you always be so literal minded?

Fees are very reasonable, 20 cents per transaction for less than 2000 transactions per month, and less if you do more.

That sounds like a very reasonable charge for such a valuable service. It doesn't help the consumer all that much, but for a small business owner it should minimize the pain considerably!