POF want a VAT ID(Ireland) off me but the problem is I don’t have one, otherwise I’m going to have to pay 23% tax on top of my deposit, is there any way around this?
You could choose Country outside of the EU union as your address.And there will be No VAT charges.
If you are based within the EU, there is no way around it and you need to get one from your tax office in order to "save" the 23% tax.
Edit: well, yeah, you could use a fake address, but I wouldn’t recommend this. Sooner rather than later you want to get your taxes in order.
Just standard if you’re doing business in Europe, just get a business registered and you get it right away.
Do they let you away with this?
You might be able to get away with it on POF’s end over the short term, but the tax office won’t be too happy if you show them invoices with some fake address in the U.S. or sth like that.
So once again, I highly recommend that you just get your business registered (if you haven’t already) and get a VAT ID.
Unfortunately, the whole tax system in the European Union is pretty complex, especially if you are dealing internationally, so in addition to the point above it is definitely a good idea to schedule a meeting with a tax consultant. He can get you up to speed on all the bullshit you have to deal with and prevent massive headaches later down the road.
This is one of those rare moments where taking the time and having a solid plan trumps the usual "just take action" mantra, taxes are no joke.
Well i have done it before, no problems so far. Not with POF but with another source because i didnt have company setup at that time and didnt knew that i was doing something wrong.
If you arent banking some decent cash yet i wouldnt recommend seting up a company yet. Its massive time consumer and it will distract you a lot. If you are already making reasonable money you should definitely register a company.
Thanks Andy, problem is I probably don’t have the cash to be splashing on tax consultancy, are they expensive in general?
They have pretty hefty hourly rates, but sometimes offer free first time consultation which should be enough to give you a general idea. Just shop around a bit.
What I did when I was completely clueless was crash a couple lectures at University where they went over the tax system. In addition to getting an overview I also managed to get some personal questions answered for free that way.
I have run a couple of times on traffic sources using an address outside the EU, despite being in the UK, but that was partly because I had details updated in the systems from my time living in Thailand. A little plausible deniability…
That said, I don’t like having such a grey area in my accounting. And it is a big one. So I’ve just registered for VAT to avoid these charges.
(I’m pretty sure I had to regardless due to my turnover, but there are a lot of grey areas when your biz is mostly overseas.)
It’s not just POF that will charge you VAT.
If you start working on adult traffic sources, you’re going to find at least half of them charge 20% on top of ad fees if you’re not VAT registered.
The good news is that not only can you avoid these charges by registering for VAT, but you can actually reclaim money from other services where VAT is being added (like hosting, phone bills, etc). Most networks pay from abroad, so you don’t have to include it on your billings. It’s outside the scope. Which means any VAT you get charged is likely to be reclaimable as you’re paying more out than you’re receiving in.
Read this thread for more info: https://stackthatmoney.com/forum/show…K-VAT-Question
I’m in the UK, so depending on where you’re based (Ireland?), it may be different.
As for whether it’s wise to setup a company… yes, it is. Definitely.
Funnelling money through a company gives you huge tax benefits over running a one man shop on individual earnings.
You don’t need to fork over a bomb on tax consultancy. A decent accountant should do the trick. Yes, it will cost you man hours to get a company setup (although not many), and several more to maintain it, but a VAT charge is probably the least of your worries if you leave yourself exposed as an individual. It’s just not efficient.
Also worth remembering that a limited company gives you a shield against litigation and other legal liability. That’s one of those "useless until it saves you from begging in the street" kind of deals.
Thanks guys, thing is I’m relatively new so I would be shoveling off huge amounts in turnover.
In regards to setting up a company can’t you just declare hosting and whatnot as a business expense which gets completely deducted from your tax liability.
See the thing in Ireland is to set up a company you need two directors part of the company as well, pain in the arse, I think they might have to be partners or employees, not an ideal scenario.
I don’t know the Irish law, but I’m sure there’s something like sole proprietorship that won’t require any directors or stuff like that. Registering your business doesn’t necessarlily equal opening a corporation.
Yes there is Andy but as Caurmen mentioned your better off with limited liability in the long run, sole proprietorship doesn’t give you that protection but it’s definitely easier to set up and manage, not sure about eh difference in tax benefits between the two though.