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Comment by gruez | Hacker News Reader

AFAIK for sales taxes there's a minimum amount of sales you need to make per year before you're required to collect it. it's usually some high amount in the tens or hundreds of thousands of dollars. Does the same apply for VAT? If so, most projects are fine because I doubt many are raking in 50k a year in sponsorship money.

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Microsoft are taking money from hundreds of different jurisdictions and delivering it to people in 30. It's not clear if they are simply a facilitator like paypal, or a business charging customers and paying suppliers (like youtube). It seems to me to be acting as the latter.

In my jurisdiction you get upto about $100k without having to register for VAT, but I wouldn't have a clue what tax implications I'd have if I took money and sold a service to someone from Peru.

40 years ago international trade was very specialised, especially trade in services, and companies had experts to help them with the legalities. The internet allows anyone to trade with anyone else, and tax law just doesn't keep up.

It's quite possible for a company or sole-trader with a revenue of $50k a year to be providing services to customers in 150 countries. That was unthinkable even 20 years ago. How do they ensure that they meet all applicable local laws (including buy not limited to tax)? What about if their customers are anonymous?

If I'm providing coding services to "Joe Blogs" who pays me via bitcoin or western union or even cash in the mail, how do I know he's not in Iran or Cuba and I'm breaking American law.

If I'm a developer in India and I do work with a customer in the USA and a customer in Iran (and customers in 50 other states), am I breaking US laws? Or Iranian laws? Or Indian laws? Not just tax laws, but economic boycotts, export laws, etc.

How do I keep on top of that even if I'm pulling in $50k/year in sponsorship, what about if it's just micropayments for my blog and I'm getting $500/year into my bitcoin wallet?

>It's not clear if they are simply a facilitator like paypal, or a business charging customers and paying suppliers (like youtube). It seems to me to be acting as the latter.

There's a third category you missed: amazon. They handle the transactions and even the fulfillment, but don't collect taxes on behalf of the seller in certain circumstances. A few years ago (before South Dakota v. Wayfair, Inc), amazon wouldn't charge sales taxes for certain third party sellers, especially out of state/foreign ones.

>In my jurisdiction you get upto about $100k without having to register for VAT, but I wouldn't have a clue what tax implications I'd have if I took money and sold a service to someone from Peru.

Hetzner (german hosting company) has a country/VAT selector on their site. If you select a EU country, you get charged 20% (or whatever) in VAT, but if you select US you pay 0% VAT.

For sales tax, many states have a threshold of the form $S in sales or T transactions per year. S is usually $100k or more, but T is typically 200. That’s not hard to hit.

For VAT I believe that many countries only have thresholds for sales from sellers in the country, or in another EU country. Other sellers owe VAT even on tiny sales.

For EU VAT the minimum threshold is €10k (excl. VAT). You register with a mini one stop shop within your country which distributes the VAT to the other countries. If you're not selling to consumers in other EU countries the threshold is a lot higher.

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