I'm in danger of having to pay VAT twice

Hello,

so I get the whole Patreon VAT system, it collects VAT beforehand and passes it to the authorities before I see a dime of it. Now I’ve talked to my tax advisor and he talked with lots of other people, and we have this problem:

They need to connect the VAT collected in my name to some numbers where it has been paid to the German fiscal system. Basically

  • which tax office in Germany has the amount been paid to
  • which name and tax identification number has been used

…and this for every month. Basically, Patreon has to pay the VAT in a way that says “X € come from this guy, Y € come from that other guy”, it can’t be a bulk amount so there has to be some resolve somewhere. I know how to see how much € has been paid as VAT to Germany, France etc. in my account, but when Patreon pays the VAT, they’d need to list how that amount comes to pass as well.

If I cannot supply this information, I’ll have to pay VAT twice because someone on either end does not properly handle things. With the amount of money that I’m earning, this would be an insane amount of wasted money.

Any help?

3 Likes

ALL German creators have that Problem.
AND – additionally, … It is actually ILLEGAL at some point, to charge double… but as far as I know, we have no other possibility right now

That’s…so typical for Germany. Wanting to play Mr. Worldwide but not understanding progress comes with change. Well if all German creators have this problem, I won’t be a German citizen for much longer.

I think your accountant is in the wrong here.

Essentially speaking, your patrons have a legal contract with Patreon Inc. as an entity and not with you or your business, therefore Patreon pays the VAT (“for you”).

You on the other hand have a legal contract with Patreon Inc. The company pays you a certain amount of cash for bringing people to their platform. “Your” patrons are not YOUR customers. They’re the customers of Patreon - legally speaking.

I am German myself and self-employed. There is no problem at all. You just have to write an invoice (pro forma Rechnung) with Patreon Inc., USA with the remark "steuerfrei gem. § 4 Nr. 1b UStG; § 6a UStG and “Nicht im Inland steuerbare Leistung”.

At least my accountant told me that and we’re handling payouts just like this.

1 Like

Hey @mcflypg - thanks for surfacing this and bringing it to my attention. I’ve reached out to the team to see if we can provide any more context. I’ll let you know what I hear!

Hi mcflypg. Thanks for writing, and sorry to hear of this issue. Unfortunately, we have seen it arise a couple of times (within Germany, specifically). More unfortunately, it’s likely the result of there being little familiarity with interpreting a recent German law itself based on EU law.

Patreon Inc. is a US entity which is required to operate under EU Directive rules for Marketplaces. Specifically, from a German VAT point of view, Patreon’s model falls under sec. 3 para 11a VAT Act. Under this section, the service provided to Patrons i - for German VAT purposes - deemed to be rendered twice. First from you (Creator) to Patreon, who are involved in the provision of the service, and second from Patreon to the ultimate service recipient (Patron).

The first service (the digital service provided from you to Patreon) is rendered in a B2B context and therefore not subject to German VAT, as the service is subject to VAT at the place from which the Patreon conducts its business (the U.S.). The second service (Patreon to your patron) is provided at the location of the patron (Germany), and thus has local VAT applied and collected. Patreon Inc remits this VAT collections (and indeed all EU VAT collections) to Irish tax authorities through the MOSS VAT regime under registration ID EU372009942.

We’re working on the backend to clear this up with the relevant authorities, as well as improve communications on our site itself which authorities could reference. In the meantime, you should be able to create an invoice charging Patreon for your services (and evidencing zero VAT) to present to the auditor. Let us know if there’s anything else we can provide, or if you’d like to talk further.

Hope this helps,
Mike

1 Like