Spanish government limits crowdfunding to € 1M, donations capped at € 3000.
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So now they added a new 20% tax on private bank transfers from UK bank accounts to italian ones.
Just saying: be wary if your government gets inspired.
In the UK you can get a Ltd. up and running within 24 Hours for what is essentially pocket change.
The UK has exceptionally friendly laws and regulations concerning doing business and I wish more European countries would imitate them.
You only need to pay in half of that though (until your GmbH goes bust with debts, that is). And since 2008 there's a mini-GmbH for 1 euro: https://de.wikipedia.org/wiki/Unternehmergesellschaft_%28haf...
If you just want a registered business and VAT ID but don't need the corporate form, on the other hand, you can do that part for about 100 euros and an even shorter webform.
Isn't that against EU laws on freedom of movement of currency?
Yes, the duty of proof is opposed to the normal (you need to prove you are innocent).
You file on the web. You declare your monthly income and pay 24.5% tax, all inclusive of your income taxes. Even if you make no turnover the first months, you benefit fromthe health insurance, and you could even get the €400 survival allowance ("RSA"). If you reach 30k€/yr, you must file a proper company and you'll get the normal 75% tax rate.
I think we have a good system to let people start companies. Website is ugly and we live at the Cobol & Paper age, but we got this little part right. That was brought by Sarkozy.
Ow.
How is this legal under EU law of free movement of capital?
via http://www.zerohedge.com/news/2014-02-16/money-launderer-unt... original italian news http://www.ilsole24ore.com/art/notizie/2014-02-13/ritenuta-a...
It's a presumption that the transfer is taxable income and a requirement to demonstrate otherwise. That's a very heavy tax enforcement process, but in theory you can get the 20% back if it's not income. If it is income, you should have paid the 20% anyway.
There is no particular need to have a 'local' account - you can pay all your bills with EU/SEPA payments from any european bank, the prices/etc will be the same, and you can do your daily purchases with a non-local card just as well.
In fact, don't even bother with anything there.
And then when the economy is bad it's "big bad Germany's fault!"
Yawn
In this case if you have a project that can go beyond 1mill € (I can't think of any that could reach that quantity, but that's another question), you'll have to be creative and create a company in the UK or USA to manage it.
Reading the article I realize that what they are trying to do with the new law (that basically makes the crowd-founding unusable for startups), is to protect the small investor. We've had several small investors scams (one of them by Caja Madrid, a big savings bank), in all the cases, the regulators were accused of being too little involved.
I have to agree that is a matter of time before there is a big scam with crowd-founding in Spain. So the Spanish bureaucratic logic says you'd better punish all of them(those dangerous crowd-founders) before a notorious crime is committed. Sad
Edit: added the last paragraph. Edit2: readability and typos.
Apart from having free healthcare (although they are trying to change that as well), layoffs are regulated by law (companies must file a special request,ERE, to the government in order to axe more than a percentage of employees, which must be justified), workers are entitled to a severance package of 30 days (it was 45 a few years ago) of pay for each year spent at the company, and for each year working you accumulate three months worth of unemployment benefits.
I'm sure that there are countries which offer better conditions, but I can't say Spain has a weak safety net.
It is the best known proof that it works, that people can be heard when someone is ready to listen them. And they will give money for that.
And this, this will probably never happen in Spain.
Edit: > million (reason for this answer).
Not so for "popular" projects, that are promoted via TV programs or so.. those will surely reach 1 mill easily.
On the other side, charity is very popular and people donates money (small and big quantities) when they see a need.
Of course it can always become fashionable, with everybody crowdfounding something, but that´s when a big scam will take place, with a scandal in the media and crowdfounding getting hit hard.
Edit I changed crowdsourcing for crowdfounding
A shame of law, however, since it's only meant to discourage small scale investing.
With one single rule, they've killed most chances of growing businesses locally.
There are only a couple considerations here: first, they do force you to pay this in any case or you can't do business at all. The rationale is that having health insurance / social security is not optional in Spain. Thus the illegality of doing business / working without paying that. I would leave this untouched.
The other consideration is that you have to pay this even if you have a salaried job and your employer is already collecting from your salary and doing the contributions for you. I would make it unnecessary to pay the extra 250 EUR/month in this case, it doesn't make sense, except for people with very low salary (for whom no social contribution is mandated for their employer), in which case I would keep the need of contributing separately, or it's a huge loophole to avoid contributing.
A socially-oriented state has some cost, you know. Having to pay 250 EUR/month when you do business is such a ridiculously low price to pay for near-universal health care.
That's the part I meant was unfair. To the rest I agree: When you earn money, you have to paid fees to get your health security, I agree it's normal.
- At least € 50000 on capital stock
- A civil liability insurance that covers up to € 150000 per year.
Also individual donors must not donate:
- More than a total of € 6000 per year on crowdfunding projects
- More than € 3000 per year on a single crowdfunding project
Funnily enough, political parties in spain can:
- Get donations from individuals for up to € 100.000 yearly.
- Foundations or associations owned by political parties (think tanks) can receive limitless donations.
I don't know about Spain but here it is essentially a need for people in charge of the "digital economy" to somehow feel useful and show that they are "regulating" something. In this case they must feel more justified because it circumvents traditional actors (i.e. banks) and involves money.
It is kind of amusing because this is a sector where most EU countries enjoyed a more liberal regulatory context before startups started to spawn in the US. And now that there is a boom, regulations are added to prevent it from developing, effectively removing any possible european competition to US companies in the space.
I don't know if this will affect the likes of Kickstarter though, if they don't have any physical presence in Spain I don't see how the government is going to know about it.
Well, obviously they will known when you receive your funds for your project, else you will be tax avading if you don't report it.
Obviously if you are in need of a significant crowdfunding campaign you'll probably have to relocate to a friendlier place in the EU, at least temporarily (I guess if you are looking for more than 1M euros it might be worth it).
I don't think they care about the backers.
This is why accountants are important. They know the system and paperwork and words; they know how you can pay tax in one form cheaper and later instead of expensive and now.
I don't think UK taxes lottery winnings.
though UK lottery winnings will still be taken into account for inheritance tax if the winner dies within 7 years.
If crowdfunding was like purchase of shares (which it isn't), then it wouldn't be taxable initially, but would have a capital gains tax when you sell those shares.
Most of the crowdfunding projects are in essence similar to preorders, and thus would be taxable as any other sales - if there are true donation projects, then they'd need to file for nonprofit status to be able to get tax-exempt donations.
To regulate crowdfunding because of fiscal fraud is pure bullshit. The biggest fraudsters aren't the usual target of crowdfunding campaigns (lots of small contributions).
This is an article, but can't find the report. Is there a report one can download? Or is it just an opinion piece?
The point is that this government rules with a twisted logic. They assume the biggest fraction of population originates the biggest fraction of fraud. For them, everything is low and middle classes' fault.
In the past, people who have been hit by these scandals go to the government/financial regulator to claim their losses. If the government doesn't cover X% there tends to be a big backlash from left wing media and politicians.
All the government is doing is hedging their potential future loss in case some of these crowdfunding campaigns end up being "scams". Spain is very much a country that likes socialise private capital losses.
Also: taxes
If there is campaign organized on Kickstarter or similar site, who is legal entity responsible for the campaign? This services usually collect the money and do not pass it until some conditions are met. We could argue that recipient is just subcontractor hired by Kickstarter.
Dude, by definition you are arguing that it's great for criminal uses.
It's meaning is quite clear.
That's not to say you can't argue that it should be ignored but please have a grown-up argument about it rather than resorting to rhetoric.
As cryptocurrencies grow the power of governments to tax will diminish. I think it'll be similar to music and movie piracy - they will be simply used so widely that it will be impossible to fight. Embattled governments will turn to deflation and increase the tax burden on those who continue to use state currencies, increasing even further the incentive to switch to cryptocurrencies. With only worthless fiat to pay armies and bureaucrats, governments may well collapse.
What comes next I have no idea.
Also, things like car tax are successfully collected even on entirely black-market sales through this simple expedient: drive around the city scanning license plates, and check whether the car is registered. The same is done with apartments: do you own a $1m apartment in the center of Copenhagen? Your income taxes better explain where you got that much money. Paying for the apartment in Bitcoin won't help you hide the physical apartment.
I don't see cryptocurrencies as all that fundamentally different than cash (or even gold) for those kinds of purposes, which are already fairly easy to use for black-market transactions. The availability of money is not what's keeping my employer from paying me under the table; if they could get away with it, they could slip me USD or EUR bills under the table. And in a handful of small-scale occupations (e.g. hiring a house cleaner) people do so. But for most larger-scale stuff the cash itself is not the limiting factor; the limiting factor is that you do other things that get you noticed. Even that part is pretty classic: Al Capone was famously taken down on tax-evasion charges because he was clearly living a lifestyle above what he was reporting. If you buy a mansion and Lambo with your Bitcoin, you had better have your taxes in order.
But seriously, that was an extraordinarily shallow if not downright stupid comment. Not only have you equated a serious political statement with a punk band based on obviously superficial understanding of either punk as a music genre or anarchism as a political philosophy, you've completely failed to understand the main point, somewhat obfuscated by talk on Bitcoin, of his argument, namely---basing your moral reasoning on what formal coercive authorities formally declare as good or wrong is a horribly low standard of moral reasoning.
However I think even there the idea of setting up a tech company with more than a million euros of illegal currency that can't appear on your books might be a little challenging.
EDIT: I'm talking about new cars. I guess the used car market is mostly black, but I don't know as I never bought or sold a used car.
But yes, most of Spain's submerged economy is via services without invoices (no VAT, no IRPF).
When I worked for a big telecom JV it was an open secret that everyone thought that Telephonicas dominance in South America was not all above board
Not that it changes the story a lot, but I just wanted to make that clear.
Old dinosaurs.
To follow HN's mandatory analogy policy, it's like when PCs had too many options and users were shooting themselves in the foot and then Apple came along and simplified things by removing those options. Some are mad to this day, others love how they aren't caught in difficult situations.
Generally so far it hasn't been a major issue, though things are being continually tweaked, and there are some tax shenanigans especially at the corporate level. But Scandinavia has been fairly successful in the inter-country competition for being seen as a nice place to live. It's pretty uncommon for people who study at university here to pursue careers elsewhere for more than a short period of time, because most Scandinavians prefer to live somewhere with a functioning civil society and government, low levels of crime, good support for raising children, and generally a working social system.
They whined about having to take a haircut to the press and MP's and the coop had to sell off its family jewels to private equity vulture funds who are gong to screw over the holders of PIBS anyway
http://www.thelocal.es/20131112/spains-solar-police-to-kick-...
It must be one of the most anti-progress political moves I've seen.
OTOH "I love the music but I can't stand the scene."
Now if only those pesky humans and their idiosyncrasies would conform to the ideal behavior...
Government itself is an emergent phenomenon. Rent seeking, regulatory capture or other market distortions are not the only emergent elements of government. Legislation, elections and all the other basic components of democratic government are themselves emergent, changing in response to "market" forces. I don't personally think this is the best framework for thinking about these things, but even within the framework it is possible to consider them.
This isn't to say that governments aren't providers of certain goods (national and personal security, protection of property, legal systems, systems for pricing and controlling externalities) that are critical for growth.
So to combat my personal opinion that advocates of naked Libertarianism are essentially juvenile, you provide a naked display of naive realism:
The three "tenets" of naive realism are:
That I see entities and events as they are in objective reality, and that my social attitudes, beliefs, preferences, priorities, and the like follow from a relatively dispassionate, unbiased and essentially "unmediated" comprehension of the information or evidence at hand.
That other rational social perceivers generally will share my reactions, behaviors, and opinions—provided they have had access to the same information that gave rise to my views, and provided that they too have processed that information in a reasonably thoughtful and open-minded fashion.
That the failure of a given individual or group to share my views arises from one of three possible sources—
- the individual or group in question may have been exposed to a different sample of information than I was (in which case, provided that the other party is reasonable and open minded, the sharing or pooling of information should lead us to reach an agreement);
- the individual or group in question may be lazy, irrational, or otherwise unable or unwilling to proceed in a normative fashion from objective evidence to reasonable conclusions; or
- the individual or group in question may be biased (either in interpreting the evidence, or in proceeding from evidence to conclusions) by ideology, self-interest, or some other distorting personal influence.
From https://en.wikipedia.org/wiki/Na%C3%AFve_realism_(psychology...
"crowdfunding" is completely unregulated, and just like other startups that decide regulation isn't a good idea (Mt Gox, airbnb, that unlicensed taxi thing, etc etc), things rarely end well.
For every 1 legitimate crowdfunding campaign, there's probably 100 that are just there to scam people out of money. And when people are increasingly scammed out of money, who will they look to to compensate them? Their government.
Honestly, there's no need whatsoever to regulate this whatsoever. The market will evolve of its own accord until it's "good enough." Regulation will be impotent at best and destructive at worst.
This is the exact same thing that happened with banks. People got angry because banks went bust, and the government stepped in to insure them with public dollars (i.e. take risks that no private citizen would take with their own money.) How did that turn out eh? 100 years down the track and people still fail to do their homework because they can trust the government will pay. And everyone loses.