🚀 go-pugleaf

On Wed, 18 Nov 1998 19:32:23 +0000, Jason Clifford <jason@domgen.com> wrote:
>On 18 Nov 1998, Sean Eddy wrote:
>
>> IANAL either, but I think most countries have tax treaties that try to
>> minimize double taxation.  When I was a US citizen living in the UK, I
>> was paid by a grant from an agency in Tokyo through a bank in
>> Strasbourg that sent ecu's (e.g. one step up from monopoly money) to a
>> bank in London for me.  Despite the twisted international chain, I
>> filed only US federal and state taxes. The US/UK tax treaty meant that
>> I didn't have to pay UK income taxes, and the source of the money
>> (Tokyo or Strasbourg) didn't affect me.
>
>Yes but you were fortunate enough to be in a clear cut position. The
>position as regards donations of money to individuals following on from
>work they have done or not done via agencies in other countries has not,
>to my knowledge, ever been tested as regards the situation of an Open
>Source developer.

For which reason I would expect that the first instance of a "FSMB"
would likely occur in either:
a) Canada,
b) Germany,
c) United States,
d) United Kingdom,
and essentially be country-specific.

It would be nice, down the road, for it to permit moving monies across
international borders without accreting strange taxation requirements. 

My suggestion is to assume that locals in each locale can handle the tax
issues, and that it is most reasonable for local development efforts to
be sponsored by local contributions. 

It doesn't practically matter very much during the *first* million
(dollars|pounds|marks|euros), and I expect that if spending were to grow
beyond that level, there would be enough activity to nicely justify
having local organizations to deal with the local tax rules. 

>I suggested to them that it might be better to have the software zero
>rated and the media standard rated at a set rate but they are not equiped
>(mentally at least) to deal with this.

Does that mean that there are multiple rates?

I thought (silly me!) that there was a pretty much fixed rate VAT.   If
the UK version has any resemblance to the Canadian GST, the ratings
wouldn't matter.

In Canada, the 7% GST is applied to everything (where there are ample
bizarre exceptions so as to keep bureaucrats busy), and a 7% credit is
applied to purchases.

Thus, you would have paid 7% GST to your supplier when buying CDs, which
you would then deduct from the 7% you pay to the Revenue department on
the sale of the CD.  The 'software portion' would implicitly be
"zero-rated," unfortunately not in your favor :-(. 

Spent:  $107 on the CD duplication service
Received: $321 for selling the CDs

Tax credit: $7 (from the $107)
Taxes collected: $21 (from the $321)

Net remittance: $14

If software is "free" this means no deduction.
-- 
"Everything should be made as simple as possible, but not simpler." 
-- Albert Einstein
cbbrowne@ntlug.org- <http://www.ntlug.org/~cbbrowne/lsf.html>