Chestnut shipping


#41

Hi There,

your experience might suggest otherwise, but the EC commission has a very clear opinion on that (pdf file): https://circabc.europa.eu/sd/a/c9b4bb6f-3313-4c5d-8b4c-c8bbaf0c175a/836%20-%20VAT%20treatment%20of%20Crowd%20funding.pdf
See page 7 talking specifically about reward-based crowdfunding, given that you are even considering a refund, there is a clear link between your payment and the reward; and therefore taxes apply. The gist is (https://www.tax-news.com/news/EU_States_Agree_VAT_Rules_For_Crowdfunding____69706.html):

In its response, the VAT Committee has said it unanimously agrees that reward-based crowdfunding, where the person giving funds to a crowdfunding campaign (“the contributor”) receives in exchange for a contribution a non-financial reward in the form of goods or services from the person receiving funds from contributors through a crowdfunding campaign (“the entrepreneur”), shall constitute a taxable transaction for VAT purposes, provided that there is a direct link between the supply of goods or services and its corresponding consideration collected by way of crowdfunding, and that the entrepreneur is a taxable person acting as such.

If you look at your screenshots you can see that purism very carefully worded “shipping is free”, “no shipping costs” etc… which is technically not the same as VAT (and VAT collecting fees). We might have expected (or hoped for) something different, but they have only promised free shipping so far.

Merry Christmas and an exciting next year everybody!

P.S. the German reselling partner stated (in German) in April that it no longer resells purism stuff, so I don’t think they have a European base…


#42

I am a little confused about the approach of people here thinking that they should get the goods without paying tax. You don’t have to convince anyone who participates in this forum or anyone who works for Purism. You have to convince the relevant governing body.

Generally speaking, if there were simple ways of avoiding this type of tax then a) every company would already be doing it and b) the government would close the loophole very quickly!

It is said that the only two certainties in life are “death and taxes”. So assuming you live for another six months and get your Librem 5 then you should expect to pay tax on it (for those countries that apply this type of tax).

Longer term it probably is possible to avoid the VAT-collecting fees i.e. if Purism has a sufficiently high volume of sales in your country to make the effort to understand, register for, implement and collect VAT at the time of payment for that country.


#43

Even if it might look like self-explanatory that duty rate is zero, let me for a moment change title of this thread to “Chestnut receiving” in order to get who is doing what before someone pays for individual product (unit) VAT and finally receive pre-ordered phone (way out before starting to play any games on it). When receiving package to EU from non-EU country first of all we need to pay for customs duty rate (besides tax for package delivery amount). Just afterwards, on top of this calculation, is added particular country VAT percentage. This all (customs duty + CIF + VAT) needs to be payed on top of the product price when receiving new product within EU. At least, by simplifying, there needs to be specified TARIC number provided on CN23 customs declaration form, field Nr. (7). Anyway, shipping coordination in their whole parts should be clear (to all involved parties), in particular with electronic devices importing to EU. Bottom line here is to take into account that within EU exists, and needs to be taken into account, Calculation of customs duties:
To be able to calculate the customs duties to be paid when trading goods, three factors have to be taken into consideration.

  • The value of the goods
  • The customs tariff to be applied
  • The origin of the goods

“At present, the electronic customs tariff (Elektronischer Zolltarif-online - EZT-online) which is made available by the Federal Fiscal Authority, but only in German) and the TARIC (Integrated Tariff of the European Communities) can be accessed online for information free of charge in order to determine rates of duty.”


#44

Shipping window for Chestnut: December 3rd – December 31st of this year.


#45

What should I try to tell them? That Chestnut means developer device and that: “I’m not sure if it has some CE markings on it, but that I will, for sure, have phone’s cellular baseband kill switch always off.” Customs Office might destroy it anyway (no VAT to be payed, only garbage fee), is this what are you suggesting (in order to protect my investment)?


#46

OK. I assumed that not much would change between now and Evergreen. I don’t think Purism have really talked about what is going on behind the scenes with byzantine EU regulations etc.

Or keep your head down and pay your VAT?


#47

If i have to pay taxes i will, i’m not a thief and i don’t ask purism to cheat eu, but on campaign page it was wrote they will ship from eu, so i’m expecting to pay vat to them if the vat is needed by eu law, but i still whould like to receive the product from the eu


#48

Hi everyone,

Vielen dank Spaetz for these links you’ve provided. I’ve just read the pdf and I have to admit that I was wrong all along! Good lesson.

Also my apologies if I have annoyed and/or mislead any one of you. My mistake.

Good catch. Eagle eye, he? :slight_smile:

Could not agree more…

So, what now?

Are you all willing to pay these additional costs?


#49

I gave you a like on your post for your humility and recognition of your errors. That is a rare feature to observe in online forums. Congratulations to that. :slight_smile: (I am serious)

Regarding your question: Yes, I am willing to pay for these additional costs. I have done so for the Librem 15 and I will be doing so for the Librem 5.
If you think about it at as the investments are sunk costs which you can forget about (or as plain research and development costs, etc.), you pay the VAT to the customs agency to receive a brand new phone that no one else in the world possesses. Which could potentially start a new movement on top of that.

That’s how I see it.


#50

Thanks, no problem. Let me be honest, I am very much annoyed about the possibility that we might have to pay horrendous fees to DHL and had expected (and still expect that) Purism to ship from within the EU, so that I would have to transfer the tax to some bank account but not pay to DHL. I had to travel to Hamburg’s central DHL office once, just to pay VAT on another crowdfunded gadget, and it was not a nice experience. It took more than 4 hours.
So let us hope that they solve this before our shipment, and let us make sure they know about the hassle it would cause us…


#51

how is Purism Librem VAT + customs fees handled in regards to bulk orders ? is it cumulative or is there a reduction/deduction in fees after a certain volume or is that irrelevant ?


#52

Thank you @Debcool for your input! For me was, all the way, about insisting on putting TARIC number 8517120000 on the outside of the Purism’s package so that there is no need for any speculation about paying import duties more than 0% (related to direct/individual deliveries from USA before batch Evergreen). This TARIC number should be (it is must) visible on the outside of current Chestnut or Dogwood package (as hopefully it is the case already).

Evergreen will have all mandatory markings on it and as such be eligible for free circulation within EU Community. Yes, I’ll pay for the Librem 5 belonging VAT gladly, as expected. @kieran, you know already that I’m not always relaxed and just forgot to admit that is for myself self-explanatory to pay for the belonging VAT (for every product on order from Purism). Furthermore, my VAT cost addition is at the moment 19% and, as known, I continue to imagine (as customer/outsider) that buyers from our EU Community will pay German VAT rate as well. No need to repeat, but still as introduced by Purism CEO, EU VAT tax ID is what needed at the first place … from batch Evergreen, etc. Just like @spaetz said:


#53

No, it is not irrelevant. IMO, if EU VAT tax ID registered and you are receiving your bulk order from within EU than you are not having additional (sort of hidden) expenses. Yet, if it is about direct delivery from USA this might be expensive order. In short, I would not recommend receiving more than one Librem 5 from non-EU country.


#54

@reC, let me guess it might happen like this: If your package from non-EU country is having worth under 1000 EUR it will be delivered, as usual, from the side of postal carrier (DHL), but if worth of goods is above 1000 EUR it is likely, almost certain, that you will need to pick that package up directly by your nearby Customs Office. Hope this helps, but still no reduction/deduction, nada in terms of VAT. This assumption is based on this statement: “Generally speaking, the customs declaration is to be made electronically; written customs declarations will only be considered as an emergency measure if the computer system crashes. A verbal declaration may be deemed sufficient for goods with a total value under €1000”, for example.


#55

@reC Hmmm i am not sure that EU bureaucratic decisions apply here. Let us run another similar scenario. Assume for a moment that purism had separated the costs. Assume they were asking 300 for development and 200 for the actual device. I would transfer to them 300 for the development and 200 for buying the unit. At what point should I pay tax to EU? My 300 do not buy anything. What would I own after I transfer the 300? Actually I own nothing. I would own something if the software and phone design had a patent and I would have bought a permit to use it, as this would separate me from the persons who would not pay that and could not have a license.

But in free software we do not “own” in the traditional sense. So I think that there should be no tax for such activity.

For example, I have routinely and repeatedly send funds to US research institutions for researching about diabetes. I have never payed any EU tax for this and will never own their results as they will go public.

It is not the same with traditional goods. I do not think, as a consequence, it is ethical to pay tax for this. I know I will be forced to pay tax. but it shouldn’t be like that.


#56

@antonis, I see your approach/idea as good and as transparent one (to be considered … as such), if proofed through (EU) self-certification procedure (as mentioned above, equal to this SDoC) for the (their own) developed software! Theoretically (based on similar scenario approach), such invoice calculation might look like 300+7% for (open source) software and 200+19% for hardware (unit), equals to, if applicable, conversion of 59.00 USD to EUR of VAT for deliveries to Germany? @spaetz and other @EU-Customers, to me it looks like Purism is the only one that can ask (if not already), as a first step, and coordinate all needed, very particular things, bureaucratic ones, related to VAT by having direct contact to this tax office (by E-mail) in Bonn, but only if, for their logistics (office) is this the way/approach they are looking for. Nihil sub Sole novum as not being an expert, just, like others, sharing my opinion here (and looking for a way out of this thread).


#57

For this approach to work the current price of the hw should be $200. Then you can say the $300 were one-off investment (donation) which happened now (research) and became public domain.
However the cost didn’t go down by $300, quite opposite, went up by $300. Meaning you cannot separate these costs and they are essential part of product.
Edit: And now authorities may make another thought experiment and say - you’ve made an investment paying $500 and now receiving payback with dividends ($800). So you’ll be taxed by total product cost (800) regardless of your investment.
Disclaimer: I hate to pay extra 20%+ tax and would be glad to find legal way to decrease it but I hate cheating even more so hence if there is no formal way - so be it


#58

Other way in order to pay in advance (before actual delivery) your particular EU Member “current local VAT rate, based on the billing country your account is set to”, if Germany is not adequate choice (by not representing the whole EMEA region), than we might have Purism coordinating the VAT rates and shipments same way like Microsoft Ireland Operations Ltd. are doing this for their products (Office 365). This all might be related to “who knows”, and this is what @kieran already wrote:


#59

To think about this as cheating is as bureaucratic as EU wants it.

When Germany buys F16 from US, do you think that EU collects VAT?
Or do you think that Germany cheats EU by not paying VAT? Or it is just conveniently “tax exempt”? If you hate cheating then you should protest for tax exemptions. Which includes weapons, churches and religions, etc etc.

When I just went to myfonts.com and bought a couple of fonts, do you think that EU collected VAT? They got exactly 0 euros. Do you think that the proper behavior for me is to visit the local tax office and tell them I just bought 2 fonts and I have to pay VAT to you because I do not like cheating? Who will do that? Who will even care?

About hw price. Yes, the price must drop. The reason it increases is most probably the fact that the money from crowdfunding was not enough and puri.sm had to invest their money, and now they want it back.

And again, I do not care about the marketing problems. I clearly paid for two things by participating in the crowdfunding: development+hw. Give me the numbers for each.


#60

Oh, I forgot the strongest possible example: how many people buy items from ebay? You transfer funds to the Chinese guy and s/he sends you the goods you ordered, which freely pass through customs, and I have never paid a single euro for VAT and customs.

All these cheaters…blah. The cheating argument does not withstand logical scrutiny in our world. Maybe in another life…