Gil Pedersen
(replying to Iwasawa 🌟 (one hikari of too many))
@hikari @0xabad1dea the Patreon VAT thing has me very confused, indeed. Like why are patrons being charged VAT, when I am not registered for it? At least the classification is simple here in DK – everything you get is considered taxable income.
Iwasawa 🌟 (one hikari of too many)
(replying to Gil Pedersen)
@kanongil @0xabad1dea normally VAT responsibility would be passed on to the next party in the chain based on their contribution to the value of a product, hence “Value Added” Tax, but for some reason that's not how Patreon operates. maybe it's to make it easier for the “creators” who then don't have to worry about it? honestly I'd love it if a VAT lawyer would tell me if this is even supposed to be a thing a business can do
Iwasawa 🌟 (one hikari of too many)
(replying to Iwasawa 🌟 (one hikari of too many))
@kanongil @0xabad1dea some further context as I, not a lawyer, understand it, about Sweden:
• Donations are not covered by VAT, because there's no exchange going on. you know, “money can be exchanged for good and services”. VAT is on sales.
• Donations are taxable income if you're a creator of some sort. Gifts are tax-free, but this type of donation isn't considered as a gift.
• If I'm only taking donations, not selling goods or services, it's easier to argue I don't have a “profit motive” and a lot less requirements apply to me. Patreon charging VAT has unsettling implications therefore.
Gil Pedersen
(replying to Iwasawa 🌟 (one hikari of too many))
@hikari @0xabad1dea per their FAQ, they are the B2C contact point and are responsible for the patron VAT. There is no VAT for payments to creators since you are a dealing with the US entity. https://support.patreon.com/hc/en-us/articles/360047578411-EU-Creator-Frequently-Asked-Tax-Questions
Iwasawa 🌟 (one hikari of too many)
(replying to Gil Pedersen)
@kanongil @0xabad1dea ohh so that's why they don't pay VAT… that makes sense.