News for hackers. Stuff that matters.
Re:Linux's GPLv2 licence is routinely violated (2015) by tsimionescu on Sunday February 20, 2022 @04:55AM (#30404556)
> By my understanding VAT doesn't work that way. Once a user pays VAT and starts using something, that's it. The taxes are done with, and VAT doesn't pass on to later users.

VAT works something like this: when you buy X, you pay VAT on X. If you then sell X, you reclaim the VAT on X from the government. The last "user", the one that didn't sell X to anyone else (or integrate it into a larger product that they sell to anyone else) is the only one that effectively pays any tax once you draw the line.

Re:Linux's GPLv2 licence is routinely violated (2015) by Dylan16807 on Sunday February 20, 2022 @05:44AM (#30404765)
I'm making a distinction between "user" in scare quotes and actual user.

If you did nothing but buy it, hold it, and sell it on, you didn't use the product. If you integrated it and sold it on, you didn't use the product.

Once you start actually using it, once it becomes a 'used product', selling it has no VAT and you cannot reclaim VAT. At least that's what google results told me. Were they wrong?

Re:Linux's GPLv2 licence is routinely violated (2015) by tsimionescu on Sunday February 20, 2022 @06:10AM (#30404858)
The whole point of VAT is that there is no such definition of "used product" or "end user". If you buy a book from a store, and have a receipt showing that you paid 1$ + 10 cents VAT, then you later sell the book to someone else for 2$, you owe the government 20 cents VAT on your sale - 10 cents which was already paid, so a total of 10 cents.

The exact law may be more complicated (you may have to pay the full 20 cents now and file for a 10 cents tax rebate; you may not be eligible for this if you are an individual and not a registered organization, etc.) but that shouldn't affect the basic principle.

For example, if you buy a computer for 100$+10$ VAT, and you then use that computer in you back office to keep your accounting, and you sell 1000$+100$ VAT worth of haircuts in the month where you bought the computer, you only owe the government 90$ of VAT even though you are an end user of the computer by any reasonable definition.

If you later sell the computer on to a refurbisher for 50$+5$VAT, and the refurbisher sells it on for 75$+7.5$ VAT, they will only owe the government 2.5$ VAT.

Re:Linux's GPLv2 licence is routinely violated (2015) by Dylan16807 on Sunday February 20, 2022 @01:13PM (#30407812)
Oh, I think this explains why I was being lied to: "There is VAT on second-hand goods if the seller is VAT registered. Generally, businesses are required to register for VAT with HMRC once their taxable turnover reaches a certain threshold, which for the tax year 2021/2022 is £85,000"

So normal people don't have to pay VAT when selling used things, but larger entities do.