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FediThing

International sales tax advice needed!

I have a tip jar for my accounts and websites ( @feditips, fedi.tips etc) which I mainly use to cover their costs. One of them is through ko-fi, the other is through liberapay. Income tax is not an issue, I declare what I get to my country's government as part of my tax return.

The problem I have is that my payment processor is now informing me I might (or might not) have to keep track of sales tax on donations:

-I'm not selling anything, there are no perks for donors. The services will happen regardless of whether anyone tips me.

-It would be incredibly complicated, it would mean registering with dozens of different countries.

-The total donations from each country are tiny, usually a few euros per year. The largest one is a few hundred per year.

-I'm not earning enough to have an accountant.

-I can't find any advice on this situation!

Can anyone help?

#AskFedi #Tax #Taxation #SalesTax #VAT #KoFi #LiberaPay #Accountancy #Accountants #Money

28 Jul 2023 at 11:02 | Open on tech.lgbt
17 comments
Adrian Morales

@FediThing @feditips What platform are you using? What's their policy? Are they tax-exempt?

28 Jul 2023 at 11:13 | Open on ieji.de
FediThing

@adrianmorales

I'm using Kofi and Liberapay as donation platforms and Stripe as a payment processor, but like all of these platforms they say it's the responsibility of the user to make sure they are tax compliant.

But I cannot find any advice anywhere that covers the situation of a free online service which accepts donations.

28 Jul 2023 at 11:14 | Open on tech.lgbt
Adrian Morales

@FediThing On the platforms I use, I had to fill out one of those 1099 tax forms.

You should do the same on Stripe: stripe.com/docs/connect/get-st

28 Jul 2023 at 11:23 | Open on ieji.de
FediThing

@adrianmorales

I think that's an income tax thing, and only for people in the US.

28 Jul 2023 at 11:25 | Open on tech.lgbt
Jens Bannmann

@FediThing @feditips

Look into companies which are a "Merchant of Record", a type of full-service provider who takes care of this. "Paddle" and "Lemon Squeezy" are the ones I know.

28 Jul 2023 at 11:14 | Open on nerdculture.de
FediThing

@tynstar @feditips

Those are for companies which sell goods or services. I am not selling anything.

28 Jul 2023 at 11:15 | Open on tech.lgbt
Jens Bannmann

@FediThing @feditips@mstdn.socia

Good point. Maybe podia.com is suitable? They write "Podia gives you the flexibility to make paid communities, free communities, and memberships on a platform you own." IDK whether they handle sales tax, though.

28 Jul 2023 at 11:20 | Open on nerdculture.de
FediThing

@tynstar

Thanks for the suggestions, but I'm not looking for a website host. I just want to find out if I'm supposed to be registering for sales tax on tiny donations.

28 Jul 2023 at 11:21 | Open on tech.lgbt
Adrian Morales

@FediThing @feditips ko-fi.com, for instance, is an organization that has a 501 (c)3 tax-exempt status.

28 Jul 2023 at 11:14 | Open on ieji.de
FediThing

@adrianmorales @feditips

Ko-Fi takes no responsibility for its users' taxation. None of these platforms do.

28 Jul 2023 at 11:15 | Open on tech.lgbt
Suspect-Similar

@FediThing @feditips Most countries will have a minimum earnings value that will make the tax filling compulsive. Below that value, you will not have to file anything. Inside the Eurozone, I believe you can declare those earnings as originating in your country and your work as an export. Please contact your tax administration to clear this. I believe that for a very low value, you don't need to do anything.

28 Jul 2023 at 11:22 | Open on penfount.social
FediThing

@Suspect_Similar

Thanks for the help, but I'm not concerned about income tax, that is already dealt with.

I am just concerned about whether I need to be keeping track of sales tax on donations. If I do, then it might mean I cannot accept donations any more.

28 Jul 2023 at 11:27 | Open on tech.lgbt
Mairita :verified_paw:

@FediThing @feditips most probably you need to look into OSS vat-one-stop-shop.ec.europa.eu and have a talk with your local state revenue service. For example, in my country SRS has an option that a person signs up to pay VAT and pay OSS through them, then you do not need to sign up for OSS in other countries.
I do not know all the details, but that's what I have gathered from local SRS.

28 Jul 2023 at 11:29 | Open on toot.lv
FediThing

@mariilasa

That only covers sales of goods or services though? I am not selling any goods or services.

I'm doing the services and sites for free (in fact I'm having to pay money to host the sites), and people can send a donation if they want to. There is no transaction going on as such.

28 Jul 2023 at 11:31 | Open on tech.lgbt
Mairita :verified_paw:

@FediThing yeah, but you are receiving services. Those rules are hekin' complicated, so I suggest to read first about VAT and OSS and then talk with your local SRS. There are exceptions and thresholds and whatnot. Maybe in your case you do not need to register and pay.

28 Jul 2023 at 11:37 | Open on toot.lv
rsudev

I am no professional tax-adviser, but I can support the claims made that you do not need to do anything in case of having a limited revenue.
In Germany there is a special rule which allows you (up to quite high revenue volumes actually) to be exempt from sales tax (at the 'price' of not being able to do a deduction of the sales tax on your expenses).

@feditips @FediThing

28 Jul 2023 at 11:34 | Open on c.im
Darkpaw

@FediThing If you aren't registered for sales tax in your country, I don't see how anyone could pay you sales tax on a donation?

In the UK, if your turnover is £85k and above, you have to be VAT-registered and you have to collect VAT on every sale. I doubt you would need to be VAT-registered in the UK if you're based in, say, France, and are getting €200/year from people in the UK.

You aren't selling anything; these are donations.

28 Jul 2023 at 11:38 | Open on mastodon.social
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