We are in talks to have the same kinds of limits in France.
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.
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).
Of course it's taxable - if you give someone $20 for their project and get a t-shirt in return, then that is taxable just as any other deal, and even if there is no profit/taxable net income, then VAT applies for the transaction.
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 be honest, in EU most things are taxable. Most EU countries will tax you on your lottery winnings, which to me is just weird and unacceptable,but this is how things work here.
The trick is to know when the tax needs to be paid and what it needs to be paid on.
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 believe you've got it backwards. The EU countries that don't tax lottery winnings are actually members of a pretty small club. Most of the world does tax lottery winnings.
In the past 5-10 years there have been several scandals regarding investment instruments: the sale by banks of shady stocks, the sale "guaranteed capital preservation" funds which ended up not being guaranteed (read Lehman Brothers instruments), "investment" firms offering investment in collectables (stamps, art, etc) which ended up being ponzi schemes, etc.
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.
To prevent fiscal fraud. Spanish government has a big problem with people not paying tax (partially because the tax rules in some cases are completely absurd).
70% of Spanish fiscal fraud is from rich people and corporations.
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).
I quite don't understand the article. Does 70% refer to the number of infractions or the total monetary volume of fiscal fraud? If this is a volume number, is this the case "80/20" rule where 80% of fiscal fraud volume originates from a small fraction of the wealthy?
This is an article, but can't find the report. Is there a report one can download? Or is it just an opinion piece?
As long as I know, it refers to the total monetary volume of fiscal fraud. It would be a "80/20" rule case but this is not the point.
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.
To protect investors in a crowd funding campaign. Crowdfunding could be used as an instrument to avoid liability to investors. Limiting it limits the potential for fraudulent crowd funding campaigns.
Comments
Anyone knows why anyone would impose these limits to crowdfunding?
We are in talks to have the same kinds of limits in France.
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.
I was thinking of the backers.
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.
Are you implying the government sees funding money as taxable ? If so, on what basis ? Incomes ?
Of course it's taxable - if you give someone $20 for their project and get a t-shirt in return, then that is taxable just as any other deal, and even if there is no profit/taxable net income, then VAT applies for the transaction.
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.
Thanks.
To be honest, in EU most things are taxable. Most EU countries will tax you on your lottery winnings, which to me is just weird and unacceptable,but this is how things work here.
The trick is to know when the tax needs to be paid and what it needs to be paid on.
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.
link showing DanBC is indeed correct (http://www.national-lottery.co.uk/player/p/help/playinginsto...)
though UK lottery winnings will still be taken into account for inheritance tax if the winner dies within 7 years.
that's for parents safety
Yeah I know UK doesn't, that's why I said "most" EU countries, and not all of them.
I believe you've got it backwards. The EU countries that don't tax lottery winnings are actually members of a pretty small club. Most of the world does tax lottery winnings.
In the past 5-10 years there have been several scandals regarding investment instruments: the sale by banks of shady stocks, the sale "guaranteed capital preservation" funds which ended up not being guaranteed (read Lehman Brothers instruments), "investment" firms offering investment in collectables (stamps, art, etc) which ended up being ponzi schemes, etc.
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.
To protect the interests of traditional and powerful companies: Banks
To prevent fiscal fraud. Spanish government has a big problem with people not paying tax (partially because the tax rules in some cases are completely absurd).
70% of Spanish fiscal fraud is from rich people and corporations.
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).
I'd love to see the details of those stats - can you point me to the source where it gives the 70% figure?
http://www.gestha.es/?seccion=actualidad&num=221
I quite don't understand the article. Does 70% refer to the number of infractions or the total monetary volume of fiscal fraud? If this is a volume number, is this the case "80/20" rule where 80% of fiscal fraud volume originates from a small fraction of the wealthy?
This is an article, but can't find the report. Is there a report one can download? Or is it just an opinion piece?
As long as I know, it refers to the total monetary volume of fiscal fraud. It would be a "80/20" rule case but this is not the point.
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.
I recently read this and it seems to me that fraud is quite popular regardless of the social status http://www.businessweek.com/articles/2014-01-30/spains-growt...
To protect investors in a crowd funding campaign. Crowdfunding could be used as an instrument to avoid liability to investors. Limiting it limits the potential for fraudulent crowd funding campaigns.
Also: taxes