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Different prices of Premium Membership


Tschakko

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Do you need more money? OK, increase the price of your PM. Everyone can decide to buy PM or not.

 

You offer to buy PM for 30 USD on your portal but you charge 29,99 EUR. You are changing the currency based on the location in paying process but without any warning. This is a behavior of swindlers.

 

Haparanda

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Ok, as I see it, there is no way Groundspeak is gonna get out of this without loosing a large part of credibility.

 

1. If they do have a VAT number, then they loose because of the horrible communication they do. Furthermore due to the lack of will to calculate it properly on europeans. If they wanted to do it right they could. We know this as they do charge a proper VAT rate on citizens of Washington State.

 

2. There is no VAT number. In this case they lied. Still it would be better to confess this as it will be found out. If it´s gonna be discovered by nonofficials then the shame would be even greater.

 

So Groundspeak these are the proper actions to take:

 

- Confess there is no VAT number and you just want more money. This is fine, but do so worldwide and with all members. No matter if recurring or not.

or

- Show your VAT number and charge the proper VAT rate to the customers (As you do with the cachers from Washington State). Give them the option to pay in € or $ (The argument of saving on bankfees is just silly and you are aware of this!).

 

No, they don't even have that right. The basic rate in the state is 7.5%. Local taxes can apply. Seattle is among the highest in the state at 9.5%. My local rate is 8.6%. Technically they should be charging me 8.6% and remitting that tax to my local authorities. By the way it is not a VAT, but a sales tax. It is only levied at the point of the final sale.

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How many of those wanting the VAT number are actually going to claim it as a legitimate business expense?

 

Doesn't matter. If someone is charging me VAT on a purchase I want to know it's actually a legitimate VAT charge and not someone simply increasing their price by 20% under the cover of "plus VAT".

 

This is why people are saying that if Groundspeak want to put the prices up they should just come out and say it. There hasn't been a price increase in years so it's not as if it's an unreasonable thing to do. It's just pretty shabby when they claim it's related to VAT but won't give a VAT number, won't say why a decade-old law suddenly applies now when apparently it didn't before, why after this law has been in force for a decade they still bumble through describing it all as "a learning curve", or indeed why they care what a foreign government says they have to do at all.

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I'd just like to add a few thoughts. [...]

 

Spot on, +1. This isn't mainly about the price increase, which is negligible in the big picture, but about honesty and ethical business practices.

 

For any Americans who feel this is a storm in a tea cup, imagine a company advertising a product at $30 and then when it's rung up at the till, you'll have to pay $38.25 and is told it's "sales tax". However, the vendor does not want to disclose whether the sales tax is actually paid to the government or whether it's just pocketed. Would you shop there?

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How many of those wanting the VAT number are actually going to claim it as a legitimate business expense?

German authorities get more and more to know about geocaching. At the moment it's only the forrst departments, who prohibit geocaching in the one or other region. But what if German tax authorities one day think: Hey, there are some 1000 PMs. Do they pay VAT? And then all the German PMs get "nice" letters from the taxman and the PMs have not a proof that VAT was paid. And German tax authorities can be nasty!

 

For any Americans who feel this is a storm in a tea cup, imagine a company advertising a product at $30 and then when it's rung up at the till, you'll have to pay $38.25 and is told it's "sales tax". However, the vendor does not want to disclose whether the sales tax is actually paid to the government or whether it's just pocketed. Would you shop there?

That is exactly the point!

Edited by squirrel42
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For any Americans who feel this is a storm in a tea cup, imagine a company advertising a product at $30 and then when it's rung up at the till, you'll have to pay $38.25 and is told it's "sales tax". However, the vendor does not want to disclose whether the sales tax is actually paid to the government or whether it's just pocketed. Would you shop there?

 

That is exactly how it works in America. Different cities, locations and business types have different tax rates. You find out what you owe when you pay at the checkout, it is not included in the menu, room rates, or advertised prices. We also have no idea if the person actually passes it on. The tax man checks that.

I still think 90% of this is that people are mad they have to pay tax. Groundspeak is supposed to collect that tax, and they are choosing to pay that now. If you have issues with that talk to the EU or your local tax people.

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For any Americans who feel this is a storm in a tea cup, imagine a company advertising a product at $30 and then when it's rung up at the till, you'll have to pay $38.25 and is told it's "sales tax". However, the vendor does not want to disclose whether the sales tax is actually paid to the government or whether it's just pocketed. Would you shop there?

 

That is exactly how it works in America. Different cities, locations and business types have different tax rates. You find out what you owe when you pay at the checkout, it is not included in the menu, room rates, or advertised prices. We also have no idea if the person actually passes it on. The tax man checks that.

I still think 90% of this is that people are mad they have to pay tax. Groundspeak is supposed to collect that tax, and they are choosing to pay that now. If you have issues with that talk to the EU or your local tax people.

 

I guess you did not get it right. It´s not about the tax. And if we say VAT it´s actually a sales tax. It´s about Groundspeak not calculating it right. In Germany it´s 19% but they cover 33%.

 

Plus there is still missing the proof that they forward it to the German state or whatever EU country they are supposed to forward it to.

 

As we do not get the VAT number from G$, I filed a request at German Customs asking if G$ is liable to collect and forward this sales tax or not and furthermore if they really do so.

 

Might take a few days to get a reply, but I just want to know the truth here. If they have to collect it, so let it be, but callculated correctly!

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This is why people are saying that if Groundspeak want to put the prices up they should just come out and say it. There hasn't been a price increase in years so it's not as if it's an unreasonable thing to do. It's just pretty shabby when they claim it's related to VAT but won't give a VAT number, won't say why a decade-old law suddenly applies now when apparently it didn't before, why after this law has been in force for a decade they still bumble through describing it all as "a learning curve", or indeed why they care what a foreign government says they have to do at all.

 

This has been an interesting discussion, although I am not an expert in VAT or affected by it. From everything I have read it appears that Groundspeak is liable for VAT since they would be considered to be providing electronically supplied services by "making databases available."

 

The VAT system is based upon "voluntary compliance" -- although that does not rule out whether compliance is subject to other demands. As the HMR&C states, "If you are supplying electronic services to UK customers and you fail to register for VAT (either under the special scheme or under the normal rules), you may be compulsorily registered in the UK under the normal rules and may incur a late registration penalty."

 

Still, considering the issues with internet taxes in my own country, I am not surprised that Groundspeak is just getting around to it. One of Moun10Bike's posts stated that Groundspeak has been working with the EU to come into compliance, which implies a certain amount of dialogue and negotiation.

 

Under the VOES special scheme (allowing electronic services to pay VAT to a single office so that the money can be properly distributed through the EU), Groundspeak does not appear to have to provide a separate VAT invoice. But that is different from clearly communicating the inclusive price at the start and being able to provide the VAT registration number (which Bryan somehow believes might be a problem?).

 

I suspect from Bryan's post that the concern with exchange rates and "currency conversion fees" is to cover Groundspeak's obligation to pay the VAT in British pounds, which would not change even if the user paid in US dollars. Since the structure is being designed to "hedge against future currency fluctuations" the immediate benefit is to Groundspeak.

 

If Moun10Bike's original statement is correct -- the recurring members will be charged at the old rate -- then presumably that would be VAT inclusive and people will be paying less for Groundspeak's services than those of us in the United States. Bryan's post seems to indicate that payments would only be frozen going forward, which is a different matter.

 

When I joined, Groundspeak undertook an obligation to not increase rates as long as I renewed -- without specifying that renewals had to use the recurring option. At that time, Groundspeak assumed the risk of fees and costs, but not additional taxes. It seems that trying to fit that into VAT is indeed a "learning curve" that Groundspeak has not handled well.

 

I don't believe that Groundspeak is tryng to do anything other than what they state, but communication is always a challenge for them and the way that it is being implemented may be subject to question. I wonder whether the commitment to "provide clear information more proactively in the future" has any more meaning than the slogan about making better mistakes tomorrow.

Edited by geodarts
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That is exactly how it works in America.

 

Er, okay. That's no excuse for subjecting the rest of us to this stupidity.

 

I have no problem with paying taxes (VAT in my home country is 25%, by the way). I have a problem paying taxes to companies who won't or can't reassure me that my tax money goes to the commonwealth rather than monocle polish and a yacht.

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One more thing I wonder about is:

 

As I heard they fixed the price back to $ on the EU countries that do not have the €.

 

But they are still liable to charge the sales tax on those cachers. Will that be included in the 30$ too? Or are they able to calculate the VAT properly for them?

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For any Americans who feel this is a storm in a tea cup, imagine a company advertising a product at $30 and then when it's rung up at the till, you'll have to pay $38.25 and is told it's "sales tax". However, the vendor does not want to disclose whether the sales tax is actually paid to the government or whether it's just pocketed. Would you shop there?

 

That is exactly how it works in America. Different cities, locations and business types have different tax rates. You find out what you owe when you pay at the checkout, it is not included in the menu, room rates, or advertised prices. We also have no idea if the person actually passes it on. The tax man checks that.

I still think 90% of this is that people are mad they have to pay tax. Groundspeak is supposed to collect that tax, and they are choosing to pay that now. If you have issues with that talk to the EU or your local tax people.

 

Sure, coming from the UK I still get wrong-footed, despite my wife being American and spending a lot of time over there, by seeing a ticket price of $10 and then being asked for $10.60 at the checkout. That's not the issue here.

 

If I order something from WA and have it shipped to PA I don't get charged sales tax; if I buy something from a PA supplier and have it shipped to PA I pay the sales tax; if I buy something over the counter I pay the prevailing rate of sales tax wherever it happens to be. That first section is the crucial one - if I buy something in the UK I pay VAT; if I buy something from a foreign supplier with no UK operation I don't pay VAT at the point of sale. If HMRC want to levy VAT on a purchase as it arrives in the country they have a chance to do so - the seller has no obligation to collect it on their behalf.

 

It does seem rather curious that Groundspeak wants to charge me 20% VAT if I buy a premium membership from within the UK but doesn't charge me the 6% PA sales tax if I buy it from Pennsylvania.

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This is why people are saying that if Groundspeak want to put the prices up they should just come out and say it. There hasn't been a price increase in years so it's not as if it's an unreasonable thing to do. It's just pretty shabby when they claim it's related to VAT but won't give a VAT number, won't say why a decade-old law suddenly applies now when apparently it didn't before, why after this law has been in force for a decade they still bumble through describing it all as "a learning curve", or indeed why they care what a foreign government says they have to do at all.

 

This has been an interesting discussion, although I am not an expert in VAT or affected by it. From everything I have read it appears that Groundspeak is liable for VAT since they would be considered to be providing electronically supplied services by "making databases available."

 

The VAT system is based upon "voluntary compliance" -- although that does not rule out whether compliance is subject to other demands. As the HMR&C states, "If you are supplying electronic services to UK customers and you fail to register for VAT (either under the special scheme or under the normal rules), you may be compulsorily registered in the UK under the normal rules and may incur a late registration penalty."

 

Which is all well and good but still doesn't explain how HMRC has any authority at all over a company that has no presence in the UK. Groundspeak, as a company based in the US and (as I understand it) no offices anywhere outside the US, could quite reasonably tell HMRC to get stuffed and it's hard to see what powers HMRC would have to enforce compliance. If HMRC decides to register a US-based entity under whatever scheme it chooses, levies a late registration penalty, and that US-based entity declines to play ball, what exactly are HMRC going to do about it? It's not like a foreign company with a UK-based operation.

 

Still, considering the issues with internet taxes in my own country, I am not surprised that Groundspeak is just getting around to it. One of Moun10Bike's posts stated that Groundspeak has been working with the EU to come into compliance, which implies a certain amount of dialogue and negotiation.

 

Under the VOES special scheme (allowing electronic services to pay VAT to a single office so that the money can be properly distributed through the EU), Groundspeak does not appear to have to provide a separate VAT invoice. But that is different from clearly communicating the inclusive price at the start and being able to provide the VAT registration number (which Bryan somehow believes might be a problem?).

 

It's rather curious to think that Groundspeak could be exempted from the requirement to supply a VAT invoice if their customer is a business. If a business wishes to reclaim the VAT (which is an entirely normal thing to do in the course of business) it needs the VAT invoice to show the amount of VAT which can be reclaimed. For all most of us aren't businesses anyone in the reseller business, or anyone writing software to process GPX files, would be obvious examples of people who would have a reasonable case to claim their premium membership as a business expense.

 

I suspect from Bryan's post that the concern with exchange rates and "currency conversion fees" is to cover Groundspeak's obligation to pay the VAT in British pounds, which would not change even if the user paid in US dollars. Since the structure is being designed to "hedge against future currency fluctuations" the immediate benefit is to Groundspeak.

 

Sure, and it's very nice of them to round in their favour while pretending it's for our benefit, especially since that rounding adds a bit of extra VAT to the bill.

 

If Moun10Bike's original statement is correct -- the recurring members will be charged at the old rate -- then presumably that would be VAT inclusive and people will be paying less for Groundspeak's services than those of us in the United States. Bryan's post seems to indicate that payments would only be frozen going forward, which is a different matter.

 

When I joined, Groundspeak undertook an obligation to not increase rates as long as I renewed -- without specifying that renewals had to use the recurring option. At that time, Groundspeak assumed the risk of fees and costs, but not additional taxes. It seems that trying to fit that into VAT is indeed a "learning curve" that Groundspeak has not handled well.

 

Groundspeak increasingly doesn't seem to handle any changes particularly well. The original promise was foolhardy in the extreme - $30 now is worth significantly less than $30 ten years ago and although a "lock-in price" is an attractive promise to make it's totally unsustainable in the long term. To lock in a price without giving yourself any wiggle room even in the face of changing tax laws is particularly foolish. That said, even working from a "you have to start from where you are now" perspective it's still not clear how Groundspeak can be in discussions with the EU without at least considering the question of how EU laws apply to a US company and therefore whether the EU has any jurisdiction over the activities of a US company in the first place.

 

I don't believe that Groundspeak is tryng to do anything other than what they state, but communication is always a challenge for them and the way that it is being implemented may be subject to question. I wonder whether the commitment to "provide clear information more proactively in the future" has any more meaning than the slogan about making better mistakes tomorrow.

 

As a rule I like to give people the benefit of the doubt although in this case I'm struggling to figure whether Groundspeak is being dishonest, incompetent, or both. I really don't see any option besides them having no clue how to implement a rule that's been in place for a decade, or using VAT as a smokescreen to put their prices up while blaming it on someone else.

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On the Premium Membership Promotion page (http://www.geocaching.com/premium/default.aspx), you advertise with: "$10 for 3 months or $30 for 1 year".

If I set the language of this page to another language, for example Deutsch (German), Français (French) or Nederlands (Dutch), I still get the offer "$10 for 3 months or $30 for 1 year" - translated into the local language - but still in USD.

 

However if you then click on the link (https://payments.geocaching.com/) on that page to actually become Premium member, the price suddenly (but without explicit notification changes to EUR 29.99 for 1 Year of EUR 9.99 for 3 Month.

 

This may not be intentional, but I find this misleading.

If you do have different prices for different countries, please advertise the appropriate price the customer is going to pay.

Edited by The CEO
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Which is all well and good but still doesn't explain how HMRC has any authority at all over a company that has no presence in the UK.

 

Presumably the EU negotiates bilateral trade treaties with its major trade partners like the US. Part of this could e.g. obligate the treaty partner to enact laws to the effect of requiring businesses over a certain size (I read €35,000 annual revenue as a lower limit somewhere) to comply with EU VAT regulations.

 

It then "simply" becomes a question of HMRC forwarding a notice of non-compliance to the Chamber of Commerce or whoever has jurisdiction over there and let them run with it.

 

This last point could also explain why Groundspeak suddenly cares about complying with a 10 year old EU regulation. Has anybody been following EU-US trade negotiations in the news recently?

Edited by Yellow ants
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Which is all well and good but still doesn't explain how HMRC has any authority at all over a company that has no presence in the UK.

 

Presumably the EU negotiates bilateral trade treaties with its major trade partners like the US. Part of this could e.g. obligate the treaty partner to enact laws to the effect of requiring businesses over a certain size (I read €35,000 annual revenue as a lower limit somewhere) to comply with EU VAT regulations.

 

It then "simply" becomes a question of HMRC forwarding a notice of non-compliance to the Chamber of Commerce or whoever has jurisdiction over there and let them run with it.

 

If so one would expect it to be a very simple case for Groundspeak to present the relevant US legislation that requires it.

 

This last point could also explain why Groundspeak suddenly cares about complying with a 10 year old EU regulation. Has anybody been following EU-US trade negotiations in the news recently?

 

I did get word that there are moves afoot in the US to require online sellers to charge sales tax depending on the buyer's location, which could end up with Groundspeak being expected to charge sales tax to all US customers depending on their state. If that's the case (and I don't have much in the way of details so could have missed the point) I wonder if it's an attempt to make sure Europeans don't get services for a lower price than Americans.

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If I order something from WA and have it shipped to PA I don't get charged sales tax; if I buy something from a PA supplier and have it shipped to PA I pay the sales tax; if I buy something over the counter I pay the prevailing rate of sales tax wherever it happens to be.

 

Just an FYI - We have a bill marching its way through Congress right now, that looks like is going to pass, that will change all that. It will allow states to collect sales tax on any internet purchase by anyone in their state. No physical presence required.

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If I order something from WA and have it shipped to PA I don't get charged sales tax; if I buy something from a PA supplier and have it shipped to PA I pay the sales tax; if I buy something over the counter I pay the prevailing rate of sales tax wherever it happens to be.

 

Just an FYI - We have a bill marching its way through Congress right now, that looks like is going to pass, that will change all that. It will allow states to collect sales tax on any internet purchase by anyone in their state. No physical presence required.

Yes... I been watching that... here is a news article for people if they are interesting. http://news.yahoo.com/tax-free-internet-shopping-jeopardized-063059401.html

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Sure, coming from the UK I still get wrong-footed, despite my wife being American and spending a lot of time over there, by seeing a ticket price of $10 and then being asked for $10.60 at the checkout. That's not the issue here.

 

If I order something from WA and have it shipped to PA I don't get charged sales tax; if I buy something from a PA supplier and have it shipped to PA I pay the sales tax; if I buy something over the counter I pay the prevailing rate of sales tax wherever it happens to be. That first section is the crucial one - if I buy something in the UK I pay VAT; if I buy something from a foreign supplier with no UK operation I don't pay VAT at the point of sale. If HMRC want to levy VAT on a purchase as it arrives in the country they have a chance to do so - the seller has no obligation to collect it on their behalf.

 

It does seem rather curious that Groundspeak wants to charge me 20% VAT if I buy a premium membership from within the UK but doesn't charge me the 6% PA sales tax if I buy it from Pennsylvania.

 

Your understanding of American online sales tax is accurate, at least for the time being. That could change in the near future. How well do you think Groundspeak would deal with this learning curve?

 

Fight Over Online Sales Tax Bill Heats Up in Senate

Posted by Mandy Nagy - Tuesday, April 23, 2013 at 3:30pm

 

The issue of the online sales tax is heating up in the Senate these next few weeks, and retailers are duking it out in a very public way. Senate bill S.336, the Marketplace Fairness Act of 2013, would address the longstanding issue of the online sales tax. The Washington Post has a good rundown that outlines in simple terms the issues pertaining to the bill: “Everything you need to know about the Senate’s online sales-tax bill.”

 

The Marketplace Fairness Act, as it’s called, would allow states and local governments to require large Internet retailers and other “remote sellers” with sales over $1 million annually to collect sales taxes and send the revenue to the appropriate location. But this wouldn’t be automatic. The states would first have to pay for software that makes collection easier. States and localities would also need to simplify their tax system to make things easier for retailers — they’d have to have a single tax agency, a single tax return, and a single audit before they could require online retailers to collect.

 

The way things work today, an online retailer isn’t necessarily required to collect sales tax unless it has a physical retail presence in the state in which the buyer resides. Logistically speaking, that’s usually based upon the “ship-to address” on the order. Though few realize this or comply with the rule, the burden otherwise actually falls on the buyer today, who is supposed to keep track of such transactions and pay the taxes directly to his/her state. States complain that they are missing out on revenue opportunities as a result of the minimal amount of compliance.

 

But the issue of collecting online sales tax also creates numerous challenges. To start, collecting taxes online in every state can be a technical nightmare for many smaller companies. The technical issues in mapping all the appropriate state and local taxes to their proper destinations can be complex and cumbersome for retailers that aren’t necessarily equipped with all the technical resources of larger companies. It would also require changes from many states and localities. Retailers like eBay argue that the bill favors larger retailers, especially those that have many physical stores in addition to their online sales, which are already equipped to collect these taxes.

 

Obama has indicated that he supports the bill, according to White House spokesman Jay Carney. White House spokesman Jay Carney says the Senate bill would level the playing field for small businesses and brick-and-mortar retailers that are undercut by online companies. Larger retailers like Amazon, which once opposed an online sales tax, now support the bill as well. In fact, Amazon has gone to battle over the issue. In return, eBay recently took to recruiting its own sellers to help oppose the measure, and it took direct aim at Amazon. The company began sending emails Sunday, the first wave to its 40 million users, illustrating the challenges for small merchants and encouraging them to contact Congress on the issue.

 

In the emails, [eBay Chief Executive] Donahoe said the legislation, known as the Marketplace Fairness Act, unfairly burdens small online merchants and asked eBay users to send an email message to members of Congress asking for changes. Donahoe argued in the emails that merchants with less than $10 million in annual out-of-state sales, or fewer than 50 employees, should be exempt. Reuters viewed copies of the emails. In emails to eBay sellers, Donahoe singled out Amazon.com Inc, eBay’s main rival, which supports the current legislation.

 

“This legislation treats you and big multi-billion dollar online retailers – such as Amazon – exactly the same,” Donahoe wrote. “Those fighting for this change refuse to acknowledge that the burden on businesses like yours is far greater than for a big national retailer.” Amazon generates more than $10 million in sales every 90 minutes, giving the world’s largest Internet retailer more resources than a typical small merchant to collect sales tax in all states, Donahoe argued.

 

A procedural vote on the bill is expected to be held in the Senate on Monday.

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Sure, coming from the UK I still get wrong-footed, despite my wife being American and spending a lot of time over there, by seeing a ticket price of $10 and then being asked for $10.60 at the checkout. That's not the issue here.

 

If I order something from WA and have it shipped to PA I don't get charged sales tax; if I buy something from a PA supplier and have it shipped to PA I pay the sales tax; if I buy something over the counter I pay the prevailing rate of sales tax wherever it happens to be. That first section is the crucial one - if I buy something in the UK I pay VAT; if I buy something from a foreign supplier with no UK operation I don't pay VAT at the point of sale. If HMRC want to levy VAT on a purchase as it arrives in the country they have a chance to do so - the seller has no obligation to collect it on their behalf.

 

It does seem rather curious that Groundspeak wants to charge me 20% VAT if I buy a premium membership from within the UK but doesn't charge me the 6% PA sales tax if I buy it from Pennsylvania.

 

Your understanding of American online sales tax is accurate, at least for the time being. That could change in the near future. How well do you think Groundspeak would deal with this learning curve?

 

{BIG snip}

 

 

I would only add that the sales tax laws vary from state to state.

 

In Texas, any company that has "a physical presence in the state" is required to collect sales tax from customers in Texas. So Woot has to do it because they are headquartered in Texas, but so does Amazon since they have a distribution center in Texas. With the new law the paradigm shifts a bit in that states will be able to collect sales tax from anyone, anywhere for any sales to anyone in their state. So if this passes and Texas CHOOSES (like they would pass up on THAT revenue!) to collect, then Groundspeak will have to start charging me sales tax for Texas even though they have no physical presence here of any kind except their customers.

 

Also, the sales tax is not the same for each state. There are also, in most areas, county and city sales taxes as well and they all vary, each locality setting their own rates. So yeah. If GS is having trouble with VATs, they are gonna have a heckuva time with sales taxes if/when this goes through!

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Sure, coming from the UK I still get wrong-footed, despite my wife being American and spending a lot of time over there, by seeing a ticket price of $10 and then being asked for $10.60 at the checkout. That's not the issue here.

 

If I order something from WA and have it shipped to PA I don't get charged sales tax; if I buy something from a PA supplier and have it shipped to PA I pay the sales tax; if I buy something over the counter I pay the prevailing rate of sales tax wherever it happens to be. That first section is the crucial one - if I buy something in the UK I pay VAT; if I buy something from a foreign supplier with no UK operation I don't pay VAT at the point of sale. If HMRC want to levy VAT on a purchase as it arrives in the country they have a chance to do so - the seller has no obligation to collect it on their behalf.

 

It does seem rather curious that Groundspeak wants to charge me 20% VAT if I buy a premium membership from within the UK but doesn't charge me the 6% PA sales tax if I buy it from Pennsylvania.

 

Your understanding of American online sales tax is accurate, at least for the time being. That could change in the near future. How well do you think Groundspeak would deal with this learning curve?

 

 

You are asking a loaded question. Base on what I am seeing on this forum, I got my doubts.

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I did get word that there are moves afoot in the US to require online sellers to charge sales tax depending on the buyer's location, which could end up with Groundspeak being expected to charge sales tax to all US customers depending on their state. If that's the case (and I don't have much in the way of details so could have missed the point) I wonder if it's an attempt to make sure Europeans don't get services for a lower price than Americans.

 

In the United States, the proposed change in law is an attempt to ensure that states are not losing out on taxes due to internet businesses and that local businesses are protected from internet dealers who are not subject to sales tax. A similar rationale spurred the electronic services VAT in 2003 -- in part, the rules were adopted to protect EU electronic service suppliers who were subject to VAT from being at a disadvantage against non-EU competitors.

 

I assume that at this point, ten years after the rules were adopted, that jurisdictional questions have been resolved with the e-services VAT -- in fact, in 2015 the same rules will apply to non-EU telecommunications and broadcasting. I don't think there is any real question that Groundspeak is subject to the VAT and that the "One Stop Shop" format that the EU offers is different from certain requirements for retail items.

 

I think Groundspeak entered into discussions with the EU to bring them into compliance because they became aware that there was a legal obligation to do so, not simply to make things as complicated as matters now stand or to find an excuse to raise prices. As the EU Taxation and Customs Union states:

 

"The reality is that legitimate business will want to operate within the law and satisfy audit obligations to ensure that their commercial rights are respected. Legitimate operators certainly do not want to give credence to the idea that Internet is a zone where laws do not apply - the role of voluntary compliance should not therefore be underestimated. Tax administrations must create an environment where compliant operators do not face unfair competition. Where businesses choose to operate outside the law, enforcement efforts must ensure that this is detected and rectified. . . . Tax laws are ultimately just as enforceable as any other laws or regulations affecting e-commerce."

 

How Groundspeak is implementing the VAT, identifying pricing on the web site, hedging their bets in terms of currency conversion (which affects their VAT payment) and what increases are justified in light of their obligation not to raise the prices for certain members. are all subject for questions and discussion. After Bryan's statement about the need to improve communication, I had hoped that Groundspeak would be more active in this thread. Given that the EU is not alone in charging VATs for electronic services imported by consumers, and that the US may soon be changing some of its interstate tax rules, the discussion may be just beginning.

Edited by geodarts
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When the price was raised, I sent a mail to Groundspeak. Today I got an answer.

 

quote:

Von: contact@Groundspeak.com [mailto:contact@Groundspeak.com]

Gesendet: Mittwoch, 24. April 2013 01:55

An: ,,,

Betreff: Update on Your Request {356072}

 

Hi Chapeman,

 

Thanks for writing in. The price adjustment occurred to include of the cost of VAT, account for fluctuation in currency and offer a consistent price in Euros. This is the first pricing adjustment in more than a decade. We thought long and hard before making the decision to add currencies, VAT fees, and coverage for currency variation.

 

Thanks,

 

Paige Edmiston

Community Manager

unquote

 

This is my answer:

 

quote:

Hi there,

 

this are still the same arguments, you posted in groundspeakforum and they are partly illegal and partly untrue.

 

1) If you want to include VAT, concerning to the german law, you have to mention your registrationno. on the website and to mention, how much this VAT is.

2) The fluctuation is on my side and not on yours. So this argument is completely off limit. Don’t take care of me. I can pay in USD without any problems.

 

Concerning priceadjustment. This is no problem for me! … if the whole world pays for it and not only the Europeanpeople.

 

So please, check again and try it with “Excuse” and “Truth”.

 

Thanks

 

“Just a cacher” and not a Community Manager

unquote.

 

Though Groundspeak is unable to be honest and fair. It is awfull, how they (you) treat the European Cachers. Maybe we cannot change anything by writing and posting ... but thats not our problem, thats yours. You show the lack of communication and fairness ... sad. But keep on posting nothing in this forum and la la la - posts in facebook. Shows how you handle this discrimination.

Edited by Chapeman
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Let's just assume, that GS wants to comply with the EU legislation for whatever reason (maybe this can be enforced somehow in the US, or they want to open premises on EU soil and thereby have to do so). In this case there are still problems with the new price sheme:

 

  • Why should European customers have to accept the additional 'buffer' you are calculating for currency fluctuations. This buffer will obviously always be in favour for GS, so this clearly discriminates European customers.
  • Why should a geocacher in Luxembourg (15% VAT) have to pay the same amount as someone in Sweden (25% VAT).
  • What advantage will it be for someone in Sweden paying in EUR? You can't really argue with currency conversion fees you want to save your customers from, since a customer in Sweden will still have to pay conversion fees from SEK to EUR. In this case the only one who will win is PayPal or the CreditCard company, since they'll get payed twice.
  • What if the EUR <-> USD rates change drastically? Do you really want to adjust the prices for PM each and every time? Becuase one way you may lose a lot of mone, or the other way your customers will complain big time.

 

So in the face of this new legislation probably coming to effect in the US itself, I think the best thing GS could do about this situation:

 

  • Get yourself an EU-VAT-number
  • Publish it on your website
  • Publish it on all your (European) invoices
  • In case you have to adjust the PM price, because you need more money and can't have it locked at the current level (which is more than understandable - just add up 10 years worth of inflation): Increase the price - for all customers worldwide - recurring or not (I guess everything else will lead to problems and more duscussions).
  • State on your website that the price for PM is XX.YY USD*
    *) excluding sales tax / VAT
  • When a customer buys a PM, charge XX.YY USD + applicable taxes for the country the buyer resides in
  • Sum up to a grand total in USD
  • State on your invoice, what the net price is, what the VAT rate was and what the VAT amounts to
  • Let the customer pay in USD. This saves you a lot of trouble and worries about currency fluctuations, and also gives us the good feeling that we aren't ripped off here. By the way: we are used to pay for things we buy somewhere outside of Europe in USD (or AUD, or CAD, ...). Let currency changes and conversion fees be our worries - not yours.
  • Oh - last but not least (and I assume probably hardest of all for you) - at least try to appologize for this situation. Think about the last time you upset your customers like this and were talking about "Let's make better mistakes tomorrow". I guess we do have "tomorrow" by now, so I assume it might be time to make "better mistakes" too.

 

I guess this is would be a solution most of us would be happier to accept. Nobody wants to have increased prices, but in case it has to be done, let it be transparently.

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If I order something from WA and have it shipped to PA I don't get charged sales tax; if I buy something from a PA supplier and have it shipped to PA I pay the sales tax; if I buy something over the counter I pay the prevailing rate of sales tax wherever it happens to be.

 

Just an FYI - We have a bill marching its way through Congress right now, that looks like is going to pass, that will change all that. It will allow states to collect sales tax on any internet purchase by anyone in their state. No physical presence required.

 

I've heard about that. At least if that passes it's still the US imposing laws on US businesses, rather than one country trying to impose laws on businesses in another country.

 

I have to wonder whether this isn't some misguided attempt to say that if Americans have to pay sales taxes then so should Europeans.

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I think Groundspeak entered into discussions with the EU to bring them into compliance because they became aware that there was a legal obligation to do so, not simply to make things as complicated as matters now stand or to find an excuse to raise prices. As the EU Taxation and Customs Union states:

 

"The reality is that legitimate business will want to operate within the law and satisfy audit obligations to ensure that their commercial rights are respected. Legitimate operators certainly do not want to give credence to the idea that Internet is a zone where laws do not apply - the role of voluntary compliance should not therefore be underestimated. Tax administrations must create an environment where compliant operators do not face unfair competition. Where businesses choose to operate outside the law, enforcement efforts must ensure that this is detected and rectified. . . . Tax laws are ultimately just as enforceable as any other laws or regulations affecting e-commerce."

 

How Groundspeak is implementing the VAT, identifying pricing on the web site, hedging their bets in terms of currency conversion (which affects their VAT payment) and what increases are justified in light of their obligation not to raise the prices for certain members. are all subject for questions and discussion. After Bryan's statement about the need to improve communication, I had hoped that Groundspeak would be more active in this thread. Given that the EU is not alone in charging VATs for electronic services imported by consumers, and that the US may soon be changing some of its interstate tax rules, the discussion may be just beginning.

 

This still doesn't answer the simple question of why Groundspeak has any legal obligation to follow European legislation. It's all very well talking of "legitimate operators" and trying to get rid of the idea of the internet as a no-rules place but buying from a US company online is really no different to buying from a US company when I'm in the US. Talk of wanting to "do the right thing" is just fluff to say "we want to take a cut out of everything even when we have no legal right to do so" and then using lots of flowery language to justify why people should line up to pay when they don't have to.

 

If my business were to operate outside the law and either not charge VAT where it was required or charge VAT and not pass it onto HMRC then I could look forward to a visit from the taxman to invite me to sort my affairs out. Since my company is based in the UK and I live in the UK I am clearly subject to UK laws, and my physical presence here gives HMRC the obvious opportunity to apply sanctions if I break the law. If the IRS decided that it wanted me to pay US taxes I would have very limited interest in their opinions - since my company is not based in the US and has no operations in the US, US laws do not apply to it. The US government and the IRS can say what they like about voluntary compliance and mandatory registration, the brutal truth is that they have no authority over me.

 

So if we cut through all the fluff from the EU, tax laws are just as enforceable as any other laws or regulations, which in the case of a US company would appear to mean no EU laws are enforceable because no EU laws apply. Uneven playing fields due to local taxation is a valid topic for discussion, but this thread isn't necessarily the place for it.

 

Since Groundspeak has been utterly silent as far as I can tell since their latest fudge that it's all a learning curve I'm finding it increasingly hard to believe they have any idea what they are doing at all.

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When the price was raised, I sent a mail to Groundspeak. Today I got an answer.

 

quote:

Von: contact@Groundspeak.com [mailto:contact@Groundspeak.com]

Gesendet: Mittwoch, 24. April 2013 01:55

An: ,,,

Betreff: Update on Your Request {356072}

 

Hi Chapeman,

 

Thanks for writing in. The price adjustment occurred to include of the cost of VAT, account for fluctuation in currency and offer a consistent price in Euros. This is the first pricing adjustment in more than a decade. We thought long and hard before making the decision to add currencies, VAT fees, and coverage for currency variation.

 

Thanks,

 

Paige Edmiston

Community Manager

unquote

 

 

(bolding mine)

 

So Groundspeak "thought long and hard" before deciding whether to comply with a rule they said they were required to obey? Interesting.

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So if we cut through all the fluff from the EU, tax laws are just as enforceable as any other laws or regulations, which in the case of a US company would appear to mean no EU laws are enforceable because no EU laws apply.

 

Correct. At least until an executive of the company sets foot in the EU, at which point he could potentially face an interesting talk with the customs people in the airport.

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Just got the "your PM is expiring" email. It includes this snippet:

 

If you currently pay via a recurring PayPal payment, please cancel this payment and renew your Premium Membership via the Groundspeak Premium Membership upgrade page

 

Am I correct in understanding that following that instruction would cancel the US$30 membership and replace it with a €30 membership?

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I'm not a recurring member in the first place, so it's moot for me - and I won't be renewing until Groundspeak have adequately explained their VAT shenanigans.

 

But it's certainly neither ethical nor honest business practice to try and trick people into paying more by using the excuse that "this directs your PayPal payments through the Groundspeak system so that we may better serve you."

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I'm not a recurring member in the first place, so it's moot for me - and I won't be renewing until Groundspeak have adequately explained their VAT shenanigans.

 

But it's certainly neither ethical nor honest business practice to try and trick people into paying more by using the excuse that "this directs your PayPal payments through the Groundspeak system so that we may better serve you."

 

As we do know by now G$ does not practice ethical and honest business the way we understand it.

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As an American ExPat living in Germany for almost 20 years I understand the frustration this is causing for the European PMs. I see this issue from both sides of the big pond. It is hard for me to believe that GS would intentionally attempt to profit off of the European PMs. None of us know what is happening at GS HQ but I am willing to wager working this all out is their top priority right now.

 

I am sure GS is trying to figure this all out so they can make a full and proper statement regarding the price increase. Yeah, they should have done this before hand but we all make mistakes and you have to admit that dealing with international tax law can be quite complicated. Heck, even dealing with domestic tax law can be daunting. At this point I am willing to give them the benefit of the doubt and am confident they will do the right thing. All the speculation that is occurring is doing nobody any good.

 

It is my humble opinion that we should maybe tone down the rhetoric and give GS time to develop and provide a proper solution.

Edited by Geo Jedimeister
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It's kind of too late to develop a proper solution once you've started charging your customers. They've putten the cart in front of the horse, ostensibly to comply with regulation that is a decade old. Surely they could have mulled it over a week or two more before going public with an astoundingly ill-considered "solution"?

 

We are in agreement that it's perfectly within Groundspeak's rights to shoot themselves in the foot. They just won't be doing it on my dime.

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[...]

 

It is my humble opinion that we should maybe tone down the rhetoric and give GS time to develop and provide a proper solution.

The problem with this is the [usual] lack of communication from GS. We don't know if they are still paying attention here or just ignore this thread. No information if they want to change something or this is set in stone.

No official statement (even one saying we'll be coming back to you with a longer official statement in 1 week) just leaves still more room for speculation and abuse.

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As an American ExPat living in Germany for almost 20 years I understand the frustration this is causing for the European PMs. I see this issue from both sides of the big pond. It is hard for me to believe that GS would intentionally attempt to profit off of the European PMs. None of us know what is happening at GS HQ but I am willing to wager working this all out is their top priority right now.

 

I am sure GS is trying to figure this all out so they can make a full and proper statement regarding the price increase. Yeah, they should have done this before hand but we all make mistakes and you have to admit that dealing with international tax law can be quite complicated. Heck, even dealing with domestic tax law can be daunting. At this point I am willing to give them the benefit of the doubt and am confident they will do the right thing. All the speculation that is occurring is doing nobody any good.

 

It is my humble opinion that we should maybe tone down the rhetoric and give GS time to develop and provide a proper solution.

 

It's all very simple.

When paying for PM, it's US$30.00

Depending on your location VAT is added.

Go through to the actual payment...

Done

 

If the Price must go up it US$ **.00

Depending on location VAT is added

....

 

In both cases, deliver a receipt that details PM fee, VAT and total.

 

Should be so easy that even a frog can do this. (The problem is, they don't)

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So if we cut through all the fluff from the EU, tax laws are just as enforceable as any other laws or regulations, which in the case of a US company would appear to mean no EU laws are enforceable because no EU laws apply.

 

Correct. At least until an executive of the company sets foot in the EU, at which point he could potentially face an interesting talk with the customs people in the airport.

 

In theory I imagine that's possible, but even that assumes the EU actually has any authority to require the US company to pay taxes in the first place.

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