@FediThing @feditips

Look into companies which are a "Merchant of Record", a type of full-service provider who takes care of this. "Paddle" and "Lemon Squeezy" are the ones I know.

I am no professional tax-adviser, but I can support the claims made that you do not need to do anything in case of having a limited revenue.
In Germany there is a special rule which allows you (up to quite high revenue volumes actually) to be exempt from sales tax (at the 'price' of not being able to do a deduction of the sales tax on your expenses).

@feditips @FediThing

@FediThing If you aren't registered for sales tax in your country, I don't see how anyone could pay you sales tax on a donation?

In the UK, if your turnover is £85k and above, you have to be VAT-registered and you have to collect VAT on every sale. I doubt you would need to be VAT-registered in the UK if you're based in, say, France, and are getting €200/year from people in the UK.

You aren't selling anything; these are donations.

@FediThing @feditips
I'd suggest you contact your tax office and ask. If some other organisation is responsible for VAT, they should be able to tell you which one.

I suspect if the service happens whether you get donations or not, you may be in the clear. At least when I (in Germany) pay something for a "pay what you want" item on itch.io with no minimum price, they don't add VAT, but they do for items which are sold.

@FediThing @feditips
Haven’t worked in this area for a while, but as someone else pointed out there will be registration thresholds and unless you are raking in $$$ (highly unlikely) you will not have crossed any registration thresholds..

The other issue is the classification of the tips and this will be a jurisdictional issue, but in the EU the rules should be the same. Ie it could be argued that the tips are a payment for a service even if it is voluntary. Best bet would be have a look at your local revenue webpage or the EU’s for guidance..

The US sales tax (state based) is a nightmare, but not every jurisdiction seeks to tax digital services (only approx 30 of 50) the kicker is no consistent definition of what is or is not to be taxed. Again there are threshold issues…

Re the tips from an Australian perspective they are not subject to sales tax (gst) if they are distributed to the staff and not retained by the business, but are subject to gst if retained by the business……

Good luck

@FediThing @feditips At least in the United States, there is a distinction to be made between "gift" and "donation." Also, what you're describing sounds to me like maybe you are receiving tips on a zero dollar service. People who receive tips still have to report it as income.

Anecdotally, I used to file my taxes on my own until it reached a point where I felt like I couldn't afford a tax advisor, but I didn't have the answers I needed. When I finally did, my tax return was larger than I had estimated, which more than paid for the $350 or whatever the service cost. Now, a knowledgeable accountant answers my questions during the year at no charge. You might get a similar benefit from taking the plunge if you find the right professional.

Otherwise, you could trust the amount you receive from people in other countries is so low that you don't have to send anything to their country and focus on your country's requirements. What are they going to do? Extradite you over $5 unpaid taxes?

@FediThing @feditips

Im not a tax expert, but in Canada, tips are considered income.

It would be best to consult your country's tax laws.

🙂

@FediThing
I think your first point of reference should be your country taxation board/agency. Regardless of your payment processor's note, they might have some advice for donations. Another option if you don't want tax agent to notice your case is find out from the local civil society scene first as they're also most likely to handle foreign donations. They might give their perspective as institutions with non-profit status but there could those on proprietary status as social enterprises.

Because tax law is so variable I'm not even sure what's the general position of your taxation regime but in general I feel like the PP's notice is not relevant to your jurisdiction if there's been no practice of levying sales tax on donations. You shouldn't need to register internationally either. The sales tax is based on the operator's domicile, not the donors.

But yes, please do check with your local NGOs/charities and tax board (they should offer public advice service)
@feditips

@FediThing @feditips Not tax advice but in most countries there is a minimum threshold that you have to cross in order to be liable for sales/VAT taxes. In Japan for instance if your sales are under 10,000,000 JPY. $500,000 in California. EU 10000 Euros. You have to cross the minimum in area through sales in the area (sales in Japan don’t count towards EU).

I’d wager you fall in the do not need to worry about this as you are probably below nexus thresholds in most areas.

@FediThing @feditips

So I can't help for any other jurisdiction but in the EU you only need to track each individual country if the income from that specific country is over a certain amount which I ***THINK*** is about €25,000 per year. So if you get less than that from e.g. Germany then just forget about paying VAT in Germany.

@FediThing @feditips

It depends. (I am a lay person)

But for example, I am living and running my small business in Switzerland. All exports are Swiss Sales-tax exempt, but my clients abroad need to pay their local import sales tax of their country, if it applies.

Also within Switzerland a small business below a given revenue threshold is sales tax exempt, unless deliberately selecting to pay (and deducting it for stuff bought). Similarly in Germany.