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DAC 7 and tax agencies. New law on sales.
Summary: The discussion concerns the new DAC 7 regulations related to sales and how to communicate with the tax authorities. The participants exchange opinions and clarifications on how these regulations will affect business operations and tax compliance. There appears to be an intense exchange of information to better understand the implications of the law.
Hello everyone. I’m a collector, and a very active one too; first and foremost I collect videogames and Masters of the Universe, but also vintage toys and action figures. Obviously, like all collectors, I buy and sell all the time. I’m not really clear on the system of the so-called fines from the tax agency if you exceed the thresholds of 2,000 euros in sales and 30 transactions. If, on the total of my sales, I make a loss or even just break even (my income, gross revenue, therefore it doesn’t actually give me a real profit, income net of costs). If I sell 500 items in a year and make 10,000 euros from them, if for these items I paid 5 euros in shipping + the real value of the used items, which I must have bought as well, why on earth should the tax agency calculate taxes for me on the total including expenses? Taxes, at least when I studied accounting, were calculated on profits, not on expenses or losses.
Let’s say that on 500 items I paid: 2,500 euros in shipping.
Let’s say that I bought, long ago or recently, at 10 euros per item: 5,000 euros.
Let’s say that I therefore made a profit of: 2,500 euros.
I could even pay taxes on those 2,500 euros if that’s what the law says, but what I don’t understand is: what does the total earned from sales have to do with it? There are costs in there too, and plenty of them. What the hell kind of law is this, and what’s the point of all this?
I’ve heard people saying: yeah, but you have to prove the value of the items, you have to prove the shipping costs.
They’re items, it’s normal that they had a cost, that’s natural, just as it’s natural that if I shipped them I had a cost; what am I supposed to prove? The amount maybe (and I’ve kept the figures above on the low side) but you can’t be required to prove something that’s obvious.
Please, also refrain from comments like: the tax agency doesn’t care.
It matters to us as Italian citizens and it should matter to us in any discussion on this forum. I think that, for a hypothetical fine, there should be a massive appeal, all together.
marioelegio
Mentore1 year agoThe DAC7 directive does not concern sellers, but only platforms. They are the ones who must report to the tax agency the names of sellers whose turnover exceeds certain limits.
Exceeding these limits does not automatically result in any fine.
It is perfectly possible to exceed these limits and remain a private individual without owing anything to the tax authorities.
The tax agency may (but is not necessarily required to) cross-check this data with monitoring of bank accounts to try to determine whether it is dealing with a private individual or an illegal trader.
The tax rules are the same ones that have existed for decades, so if taxes have to be paid, depending on the tax regime chosen, they will be paid on the actual profit (itemized regime) or on the profit presumed from turnover (flat-rate regime).
For the definition of collector, it is necessary to keep possession for a prolonged period of time; it is better to talk about years, and ideally there should be photos of the collection published on websites. If possession of the items is very brief, we are dealing with a trader (otherwise we could define an antiques dealer as a collector).
hello
mario
ilcollezionistadivideogames
OP1 year agoSorry for the mistakes and the incomplete sentences: I was correcting it but the message popped up saying "the time to edit the post has expired". Ebay, for God's sake, you too.
sika700
Mentore1 year agoHello,
I think the point of the DAC 7 is not being clearly understood; it is not meant to issue fines, but to track down illegal sellers.
If you buy things specifically to resell them, you are a trader and, as such, must open a VAT number.
If you are a collector and you occasionally and sporadically sell items you no longer want, you have nothing to fear.
In your case, 500 items in a year is equivalent to about two items a day, which is neither occasional nor sporadic activity and is therefore regular and ongoing.
As such, it would be correct to open a VAT number, even if they are used items.
As for the fines... if you want, you can keep us updated...
Have a good evening.
ilcollezionistadivideogames
OP1 year agoSika, I’ve seen a lot of your posts and I have to say you call anyone a tax evader, as if, if they didn’t sell items on eBay, they’d probably be a cop by profession. My question was legitimate because below a certain threshold of earnings (and not revenue), by law you don’t have to file any declaration, since you’re working below the poverty line at 690 euros a month. So, if you earn about 400 euros a month selling on eBay (subtracting shipping costs and a flat-rate value for the goods) and that 400 euros a month is your only income, by law you shouldn’t have to file any tax return and be subject to taxation even if you are not an occasional seller. The core of my post was therefore to understand why revenue is ever calculated and not earnings net of costs, at least shipping costs. That’s all. The forum is made for people who know the topic; they don’t have to reply to everyone indiscriminately, they should find another hobby. That said, I ask the people who understand this and have at least some sense, whether it’s possible that in the DAC7 check, the tax agency calculates the costs, and whether you have spoken with an accountant about it.
sika700
Mentore1 year agoNo, no dear... I call someone abusive when they have sales systems that prove it, and if you read the post you replied to carefully, it is clearly explained and seems crystal clear to me.
So don't put words in my mouth that I didn't say.
Besides that, you very likely don't know when a seller is abusive and when they aren't!
If you "earn" €400 a month with a continuous, well-organized sales system, you're abusive, whatever you sell, used or new.... and the poverty threshold has nothing to do with the sales system!
Have a good day.
ilcollezionistadivideogames
OP1 year agoShe understands finance about as much as she understands aerospace engineering. If you sell continuously, because you like selling and buying even if you lose a few pennies (because collectors do that and there’s little to discuss about it, just go to Legoland’s utube site and they’ll explain it to you), you have no margin scheme at all or a negligible and completely random margin scheme, you are not an abusive seller, you are a collector or someone who buys and sells out of passion. You are an abusive seller if, on the other hand, you buy a stock of 2,000 rolls of toilet paper at 1 euro each and resell it for 3 euros. As brand-new, store-bought, non-collectible items, bought obviously for the purpose of selling, then you are an abusive seller. I wrote this post hoping that collectors would speak up, but instead they all shut down their eBay profiles en masse. To make it clear to you, a brand-new vintage videogame cost 69 euros in 2005; I sometimes sell them for 3 euros, I have the faintest idea how much I bought them for ten years ago, maybe 5, maybe 10, maybe 3 euros, the fact is that today’s value is 3 euros and at that price I can sell it, otherwise I can’t sell it; in this case calculating a margin scheme is almost impossible. I have 3,700 items sold in 16 years on eBay, a tiny amount if you consider that I had a collection of PS2, PS3, PC, classic Xbox and Xbox 360 of 6,400 games (many of the rare pieces, of course, I keep) and that I have 345 Masters and two full bookshelves, 70s-80s toys etc.
You were the first to call me an abusive seller without understanding the subject I’m talking about.
You wrote "in your case, 500 items in a year equals about two items a day, not occasional or sporadic activity and therefore regular and continuous and as such you have to open a VAT number". Is that, or is that not, calling me abusive? Maybe it suits you for people to sell their used items because you’re registered as a professional seller and probably that’s why you seem to take joy in taxing the air we breathe, but I assure you that somehow, the freedom taken from others is freedom taken from you, from those with you and after you, near and far. We can’t talk in advance, but if the ADE (the acronym may not be accidental) goes after anyone without distinction and considers anyone who exceeds the limits an abusive seller without a careful analysis or a summons and on-site inspection (we are the financial police, show us your collection), then it will be a problem, a precedent will have been set, the free exchange of goods between citizens will have been struck. And then what else will they invent? What else will happen? That’s why I hope there is solidarity among people, because if even some poor soul wanted to sell junk to make 300 miserable euros to buy a loaf of bread, they should be able to do it since it’s a gain that is less than half the poverty threshold set by the EU. And the poor, you cannot and must not tax them, ever, because otherwise you are not democratic, you are fascist or even worse, since fascism still had social policies for the less well-off. The housewife who sold her 200 used books for 2,500 euros over the whole year and made 800 euros, less than 70 euros a month, you should not touch her, but I’m sure you’ll agree with me on this.
sika700
Mentore1 year agoIn fact, I’m neither a finance person nor an engineer... but I use common sense... something you clearly lack because you get fixated on talking about “monthly” and about what it sold and what it sells... I’m not interested.
If you are convinced that anyone who has a well-established, regular, and well-organized business as a private individual is compliant, I offer you my sincerest best wishes.
Good evening.
ilcollezionistadivideogames
OP1 year agoAnd she hasn’t understood that if tomorrow they tell her to stick a finger up her nose every day at noon and she doesn’t do it, for the State she’s not compliant, but that doesn’t mean she’s not right. You’re confusing rules with common sense. Italy was condemned by the international human rights court for violating fundamental human rights because of tax collection methods that allow ADE to act as it pleases, interfering in the private lives of every citizen; it was condemned last month. Despite everything, we keep endorsing this behavior like we’re suffering from Stockholm syndrome. The real tax evader is not the person scraping together 400 euros with their used clothes; you shouldn’t be nitpicking the dead broke. I still think that for you, like for many others, this witch hunt is convenient and that’s why you praise it. I could be wrong, but that happens to me rarely.
Good evening to you too.
sika700
Mentore1 year agoI’m Italian and as such I always try to respect Italian laws.
To me, you seem like the classic conspiracy theorist type, with the reasoning of “I don’t like this thing so it’s not right”... but that’s not how it works... in the event of a tax audit, tell the operator that too... let’s see if they don’t have a good laugh.
I don’t get anything out of it at all... but I guess if you don’t like Italy, why not consider the idea of changing countries?
Have a nice day.
ilcollezionistadivideogames
OP1 year agoAnd then eBay, good God, hire an accountant or something to explain to people what they should and shouldn't do in a dedicated section, may your shares crash over the next three years.
marioelegio
Mentore1 year agoUnfortunately, the legend of 5000 euros a year or 400 a month as the threshold for total exemption has spread.
Sorry to have to tell you that this is bullshit, that threshold has a completely different meaning and cannot be applied to your case.
hi
mario
ilcollezionistadivideogames
OP1 year agoI would also like to understand how a margin scheme is established on little used items that upstream, new, would cost at least 50 times more and whether there is, regarding VAT, a flat-rate calculation for used items for each category. If a new videogame cost 69.90 in 2005, if used it was sold for 3 euros, how can a margin scheme be established in this case for calculating VAT? How can it be demonstrated, in the case of a profit, that eight years ago I bought it for 2 euros and I had a revenue of 0.80 cents (1 euro minus 0.20 cents exempt because withheld by eBay)? Thanks.