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Comment by elric | Hacker News Reader

VAT is already a mess, even inside the EU. There's probably some business opportunity lurking in simplifying VAT for small businesses. Hell, there are probably regularity opportunities as well, if lawmakers are interested in small businesses.

I run a small business on the side, did a small project for a customer in another EU country, and got fined by the tax service for not having handled VAT properly. Now this is obviously my fault (and the fine wasn't too steep). It doesn't make financial sense for me to pay for an accountant (very small side business), but it's not easy enough to do it myself without the risk of errors. End result? People are discouraged from running small businesses.

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Most countries have exemptions for small businesses. In Ireland for example you do not have to collect VAT if your revenue is below 72k.

Presumably you should be able to afford an accountant by the time you reach that figure.

It's worth mentioning that you can't deduct VAT on your purchases if you don't collect VAT so if you have low margins that might be an issue.

Edit: The thresholds in Ireland are actually 75k for goods and 37.5k for services. The figure I remembered is out of date.

Is there a list somewhere or how do you know most countries have this?

I've never heard of it and would be very interested in taking advantage.

Sure, e.g. here is an EU list: https://www.avalara.com/vatlive/en/eu-vat-rules/eu-vat-numbe...

However, note that most of these thresholds apply only to residents of the said country. Distance selling etc. is covered by other schemes and thresholds.

I see. The Dutch threshold was introduced in 2020, which is why I never heard of it. And it's only 20,000 EUR, so just usable for a side gig.

The european VAT systrm is very very simple. Its clear that you have never sold anything in the USA. There the taxes are much more difficult to calculate

I'm not looking for a dick-measuring contest of which VAT system is the worst, thanks.

Where are you located? And what did you not handle properly?

In the U.K. at least you don’t need to do or handle anything VAT-related if you have VAT-able turnover of less than £85k

For small projects such as the one you describe, a simpler "One Stop Shop" system has been in effect since 2015.

I understand there is an expansion to this rule coming in July 2021, that removes the need to register in multiple EU countries.

(the UK is obviously excepting itself from that)

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