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Ask HN: How do startups in Europe generally deal with the VAT requirements?

8 pointsvazamb10y ago6 comments

Hey everyone,

I am in the process of turning a side project into something more serious. Being based in Germany means my company will be subject to the quite insane European VAT regulations. How do you deal with this in a SaaS business? Especially at the beginning.

6 comments

6 comments · 4 top-level

flashm10y ago· 2 in thread

In what way?

You deal with them by using the tax rules that are set out, and buy getting an accountant to make sure you are adhering to them.

Any issues that arise about revenue if you have to start charging vat are due to your pricing, not the Vat rules.

threesixandnine10y ago

It's obvious you have no idea. It's not about pricing. It's about that you have to registered as some sort of VAT ordinary or not-ordinary business. Hard to translate into English.

If you do business within EU with other countries you have to register for VAT and charge it. Then you have to get customer info and charge what his country charges....it's a mess.

flashm10y ago

I know what you're talking about, I'm Vat registered and do business across the EU.

You're correct though, I misunderstood your question, it seems you're not even at that stage yet. You should really talk to an accountant, not HN. They will tell you exactly what you need to be doing.

Doing Vattable business with other EU countries is a pain. You will need whether each customer is vat registered in their particular country and either charge Vat or not based upon that.

Are you doing business to business sales, or business to customer?

egraether10y ago

We just launched our website including an online store for selling software licenses. We are based in Austria. Our product is Coati, a source explorer for C/C++: https://www.coati.io/

After speaking to tax accountants and the finance office we decided to go for a reseller. The reseller does the invoicing for you. You just need to do the bookkeeping of the money you get from the reseller. We are using FastSpring. They do monthly subscriptions as well.

johneth10y ago

There are a few Facebook groups about it (search 'EU VAT Action Group' and 'Digital VAT 2015'). They're mostly microbusinesses that are UK based (so that may colour the comments you see). There's an astounding amount of ignorance and conflicting information amongst both business owners and tax authorities in many countries about exactly what this VAT for digital products thing is. I myself am in your position of needing to figure out the VAT situation very soon, so I hope you find some useful information and ideas.

BjoernKW10y ago

Ask a tax counsellor who knows about online business (there are shockingly many who today still have no idea about it).

That said there is no straightforward, easy way to deal with this. The whole process is an insane mess. You can do everything correctly and still have problems with your local tax authorities afterwards (partly because they don't really know how to deal with these regulations themselves).

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