Finland

[Changaco]

Email received two days ago:

Hello,

I'm a creator on Patreon, but I would like to use Liberapay as well (ideally I'd move to Liberapay exclusively, but at this point I'm not sure that's a good idea). The main problem with moving to Liberapay is that rewards to supporters don't seem to be allowed. I don't like rewards myself either, but the Finnish law doesn't allow individuals to ask for donations for themselves, so I need to sell something. On Patreon I'm selling early access to my monthly reports about my open source software development work (the reports are later published on my public blog).

Would Liberapay consider granting an exception for us poor Finns who have to suffer the silly law? At least when the reward is only a small token whose only purpose is to make the use of Liberapay not-obviously illegal. (I'm not sure the token reward actually makes my use of Patreon or Liberapay legal, but clarifying that would probably require a court case, and I don't expect anyone to have any incentive to sue me.)

My response:

Hi,

I'm sorry to say that there isn't much we can do right now. Even if we granted an exception to individuals from Finland our platform simply doesn't provide any way of rewarding patrons. Moreover allowing any kind of selling through Liberapay may not be legally possible without first implementing the collection of VAT from EU-based buyers, like Patreon does.

May I copy-paste your message to our public issue tracker for future reference? If not I'll summarize/paraphrase instead.

Their response:

Yes, you may use my message in any way you like.

The lack of support for rewards in the Liberapay UI should not be a problem in my case. I can instruct my supporters to contact me by email if they want the reward. I won't be able to verify that they are actually giving me money, but I don't mind.

If allowing rewards results in legal problems for Liberapay, then that's of course an understandable reason to not grant any exceptions.

[bisqwit]

I am not a lawyer, but I think one can skirt around the problem with Finnish law concerning uncompensated payments (donations) and the stringent regulation thereof by not explicitly asking or soliciting for donations. Rather, it is provided as a question-answer here-it-is style.

Note that token compensations such as badges and stickers still fall in the uncompensated fundraising category in terms of law. The issue with compensations is a different one, and raises questions about entrepreneurship (again, regulated), and indeed taxes as Changaco already mentioned.

[bisqwit]

I am not a lawyer, but I think one can skirt around the problem with Finnish law concerning uncompensated payments (donations) and the stringent regulation thereof by not explicitly asking or soliciting for donations. Rather, it is provided as a question-answer here-it-is style.

Note that token compensations such as badges and stickers still fall in the uncompensated fundraising category in terms of law. The issue with compensations is a different one, and raises questions about entrepreneurship (again, regulated), and indeed taxes as Changaco already mentioned.

[Changaco]

Clearly the problem on our side is VAT. If we could be reasonably certain that we're not obligated to collect it for the kind of transactions in question, then I would have no problem granting an explicit exception to individuals in Finland, and I assume the other co-directors would agree.

[Changaco]

Clearly the problem on our side is VAT. If we could be reasonably certain that we're not obligated to collect it for the kind of transactions in question, then I would have no problem granting an explicit exception to individuals in Finland, and I assume the other co-directors would agree.

[Changaco]

+1 from https://social.coop/@Stoori/99150103837842976

[Changaco]

+1 from https://social.coop/@Stoori/99150103837842976

[tanuk]

As @Stoori mentioned in that discussion, individuals with income less than 10k€/year don't need to pay VAT. That seems like a thing that could solve the VAT problem in most cases, although it might get messy if someone starts out with smaller income and then later surpasses the 10k€ mark.

Regarding the speculation that the law could be worked around by careful wording: this blog post (in Finnish) mentions a case where the highest court apparently decided that the lack of an explicit request for donations isn't sufficient for avoiding the need for a fundraising permit. I tried to search for more information about that case, but I didn't find anything.

[tanuk]

As @Stoori mentioned in that discussion, individuals with income less than 10k€/year don't need to pay VAT. That seems like a thing that could solve the VAT problem in most cases, although it might get messy if someone starts out with smaller income and then later surpasses the 10k€ mark.

Regarding the speculation that the law could be worked around by careful wording: this blog post (in Finnish) mentions a case where the highest court apparently decided that the lack of an explicit request for donations isn't sufficient for avoiding the need for a fundraising permit. I tried to search for more information about that case, but I didn't find anything.

[Changaco]

The VAT exemption for small businesses is not enough to rid us of the problem. If we were to fall within the criteria for mandatory VAT collection we would have to charge all EU-based patrons, using the tax rate of the patron's country, regardless of who is receiving the money (even non-EU based creators).

[Changaco]

The VAT exemption for small businesses is not enough to rid us of the problem. If we were to fall within the criteria for mandatory VAT collection we would have to charge all EU-based patrons, using the tax rate of the patron's country, regardless of who is receiving the money (even non-EU based creators).

[Changaco]

(Also note that the income threshold for VAT exemption is country-specific.)

[Changaco]

(Also note that the income threshold for VAT exemption is country-specific.)

[Changaco]

Relevant resources I found with a simple web search:

• VAT: businesses supplying digital services to private consumers - GOV.UK
• Telecommunications, broadcasting & electronic services - European Commission

[Changaco]

Relevant resources I found with a simple web search:

• VAT: businesses supplying digital services to private consumers - GOV.UK
• Telecommunications, broadcasting & electronic services - European Commission

[Changaco]

Also: How does VAT work on Patreon?

[Changaco]

Also: How does VAT work on Patreon?