9 ms·

I wonder why the EU is an afterthought when you need to spend millions on compliance for every new feature

nothrabannosir 8y ago
Against all my instincts, even though this post is unconstructive and snarky and flame bait, and even though I am European (or perhaps because of it), I have to upvote this. European people, those voting for representatives voting for representatives (!) making the laws, need to start feeling the negative feedback of the regulations. I’m not saying there are no benefits to consumer protection; there are, I am a massive GDPR fan, but we are too unaware of the opportunity price we pay for this. Be aware, fellow Europeans: there is a cost to all regulation. If you feel like a constant afterthought, maybe it’s because you are. (I know these are not necessarily specifically related to this Stripe product. It’s more of a cultural undertone. What I’m trying to say is: the parent comment has a point.)
- pwtweet 8y ago
  His opinion "I wonder why the EU is an afterthought when you need to spend millions on compliance for every new feature" is not backed up by any facts. If he had said that meeting the legal requirements in 28 different independent and sovereign countries adds too much cost then he would be correct. Remember the EU Single Market and Custom Union does not cover every aspect of commerce and industry across all 28 member states. Having said that, the Payment Services Directive 2 (PSD2) which applies to Stripe, will remove any remaining barriers and costs that still exist between member states when applied to the provision of electronic payments. If one was to add in the eIDAS directive then meeting compliance for identity, fraud, etc will soon be irrelevant.
  - RA_Fisher 8y ago
    Sure but the EU does levy rather large fines.
- luckydata 8y ago
  As a fellow European living in the US I feel divided about this: while the opportunity cost is high and the business environment is definitely stifled by regulation, the quality of life and health consequences of the lack of regulation in the USA are massive and there's very little recourse for the little people against the criminal misbehavior of corporations. There must be a happy medium between the two positions, I don't know that a country has gotten it right yet but the US is no paradise.
  - woolvalley 8y ago
    There is no lack of regulation in the USA, it's just the USA has some wrong regulations that creates horrible results you see sometimes. Most of it is from a lack of single payer healthcare and a public culture of infrastructure neglect with high amounts of waste compared to pretty much everywhere else in the world. I really think it comes down to legislation philosophy. In the english speaking countries, cost of compliance is something that is thought about for small businesses, so many regulations are small business exempt until you get to certain employee counts or revenue numbers. In the EU, that concept doesn't seem to exist and businesses of 1 are assumed to be $100M revenue businesses that can afford to do things like GDPR properly.
    - literallycancer 8y ago
      If you are a 1 man show, how about not collecting data you most likely don't need anyway? And the 4% global revenue fine the GDPR is famous for does exactly what you want -- scales with the means of the business.
      - eitland 8y ago
        Last I saw there was a minimum fine of x million Euros. Edit: had to verify. It seems a bit more reasonable: """Article 83 of the General Data Protection Regulation provides details of the administrative fines. There are two tiers of fines. The first is up to €10 million or 2% of annual global turnover of the previous year, whichever is higher. The second is up to €20 million or 4% of annual turnover of the previous year, whichever is higher.""" - https://www.gdpr.associates/what-is-gdpr/understanding-gdpr-fines/ https://www.gdpr.associates/what-is-gdpr/understanding-gdpr-...
- jakobegger 8y ago
  I don’t see your logic. Of course new features of a US company are going to be focussed on their home market first. And claiming that regulation in EU is stifling business is a bit naive. Regulation is everywhere. Have you ever tried to sell an app that uses encryption (like TLS or SSH) on the app store? The stuff you need to do in the US for „export compliance“ is ridiculous (even if it‘s an app that wasn‘t written in the US in the first place)
- FooBarWidget 8y ago
  The EU has been moving towards more standardization for quite a while now. The most prominent example is the euro coin. And although the GDPR may seem to many like another regulation to comply to, it's actually a unifying regulation because now you don't have to deal with separate privacy laws for each member state.
- IAmEveryone 8y ago
  I doubt that EU regulations are more onerous than their US counterparts. And, obviously, the EU is mostly just replacing country-specific regulations, making it about 16x easier to enter the European market. I'd also like people to name specific regulations they disagree with, yet any time I challenge s/o they slink away. In this case, a stripe rep in this thread posted a list of their todos for the EU. Note that literally "putting VAT ID numbers on invoices" makes their top 5! Can't be that bad after all: "localize the invoices, add EU specific payment methods to invoices, improve tax support, make default invoice templates EU compliant with VAT ID"
  - saryant 8y ago
    I lead a payments team. US requirements around what we put on invoices: 0 EU requirements around what we put on invoices: Still figuring it out The technical implementation is not difficult. It's dealing with all the lawyers and accountants who have to understand regulations of 27 different countries. There is a significant difference between "not regulated" and "regulated at all". The burden of understanding the regulation itself is a cost, even if the actual compliance turns out to be simple.
- lightedman 8y ago
  "even though this post is unconstructive and snarky and flame bait" No, it is raw truth, and I'm speaking as someone that does a ton of international business. If the truth hurts you and offends you, then you are not ready for the truth.
tzs 8y ago
From a tax point of view, EU is a lot easier to deal with than the US if you have to collect sales tax in the US. There are two big differences. Let's say I'm selling some digital good online. Consider three purchasers, one in the US in the state of Washington, one in Germany, and one in France. First, how much tax do I have to collect from each? For the German customer, that is easy. It is 19% VAT. I don't have to care where in Germany they live. For the French customer, that is easy. It is 20$ VAT. I don't have to care where in France they live. For the US customer in Washington...it is not easy. There is a state wide 6.5% sales tax, but there are also county, city, and other sales taxes that I have to collect. For example, if the customer is in the city of Seattle, I'm supposed to collect the 6.5% state tax, plus a 2.7% city tax, plus a 0.4% for something called the "Regional Transit Authority"...that's 9.6%. If that person is over in Bellevue instead of in Seattle, it would have been 10% (6.5% state, 3.5% Bellevue). For the US customer, I have to care where in their state they live. Also, tax boundaries are not guaranteed to line up with postal code boundaries, so to do that tax accurately I really would need to collect their full postal address (which since I'm selling a digital good I have no use for except for calculating taxes). Second, what do I do with the tax I collect? For the EU, I sign up for the VAT MOSS system in a single EU country. Then each quarter I have to file a simple form with the tax authorities in that single EU country that simply lists each EU country, what my total taxable sales were in that country, the VAT rate I used, and the amount of VAT collected. I turn the collected VAT over to that single country's tax authorities. Then they deal with distributing it to all the other countries. For the US...I have to deal with each state I collect tax for separately. Each has its own forms. Each has its own place to file them. Each has its own place to pay. If you have to deal with more than just your own state and maybe a handful of others in the US, you pretty much have to use a third party service that specialized in handling all of this. For companies in lines of business that are only barely profitable, this could be prohibitively expensive. If Congress ever decides to require online companies to collect tax for all states, instead of just those that they have a presence in, and they do not require that the states use something like the VAT MOSS system, and they do not require that each state has a single rate for out-of-state non-present sellers, it's going to be nightmare for small companies, and possibly drive many out of business.
- ovao 8y ago

Against all my instincts, even though this post is unconstructive and snarky and flame bait, and even though I am European (or perhaps because of it), I have to upvote this. European people, those voting for representatives voting for representatives (!) making the laws, need to start feeling the negative feedback of the regulations. I’m not saying there are no benefits to consumer protection; there are, I am a massive GDPR fan, but we are too unaware of the opportunity price we pay for this. Be aware, fellow Europeans: there is a cost to all regulation. If you feel like a constant afterthought, maybe it’s because you are. (I know these are not necessarily specifically related to this Stripe product. It’s more of a cultural undertone. What I’m trying to say is: the parent comment has a point.)

pwtweet 8y ago
His opinion "I wonder why the EU is an afterthought when you need to spend millions on compliance for every new feature" is not backed up by any facts. If he had said that meeting the legal requirements in 28 different independent and sovereign countries adds too much cost then he would be correct. Remember the EU Single Market and Custom Union does not cover every aspect of commerce and industry across all 28 member states. Having said that, the Payment Services Directive 2 (PSD2) which applies to Stripe, will remove any remaining barriers and costs that still exist between member states when applied to the provision of electronic payments. If one was to add in the eIDAS directive then meeting compliance for identity, fraud, etc will soon be irrelevant.
- RA_Fisher 8y ago
  Sure but the EU does levy rather large fines.
luckydata 8y ago
As a fellow European living in the US I feel divided about this: while the opportunity cost is high and the business environment is definitely stifled by regulation, the quality of life and health consequences of the lack of regulation in the USA are massive and there's very little recourse for the little people against the criminal misbehavior of corporations. There must be a happy medium between the two positions, I don't know that a country has gotten it right yet but the US is no paradise.
- woolvalley 8y ago
  There is no lack of regulation in the USA, it's just the USA has some wrong regulations that creates horrible results you see sometimes. Most of it is from a lack of single payer healthcare and a public culture of infrastructure neglect with high amounts of waste compared to pretty much everywhere else in the world. I really think it comes down to legislation philosophy. In the english speaking countries, cost of compliance is something that is thought about for small businesses, so many regulations are small business exempt until you get to certain employee counts or revenue numbers. In the EU, that concept doesn't seem to exist and businesses of 1 are assumed to be $100M revenue businesses that can afford to do things like GDPR properly.
  - literallycancer 8y ago
    If you are a 1 man show, how about not collecting data you most likely don't need anyway? And the 4% global revenue fine the GDPR is famous for does exactly what you want -- scales with the means of the business.
    - eitland 8y ago
      Last I saw there was a minimum fine of x million Euros. Edit: had to verify. It seems a bit more reasonable: """Article 83 of the General Data Protection Regulation provides details of the administrative fines. There are two tiers of fines. The first is up to €10 million or 2% of annual global turnover of the previous year, whichever is higher. The second is up to €20 million or 4% of annual turnover of the previous year, whichever is higher.""" - https://www.gdpr.associates/what-is-gdpr/understanding-gdpr-fines/ https://www.gdpr.associates/what-is-gdpr/understanding-gdpr-...
jakobegger 8y ago
I don’t see your logic. Of course new features of a US company are going to be focussed on their home market first. And claiming that regulation in EU is stifling business is a bit naive. Regulation is everywhere. Have you ever tried to sell an app that uses encryption (like TLS or SSH) on the app store? The stuff you need to do in the US for „export compliance“ is ridiculous (even if it‘s an app that wasn‘t written in the US in the first place)
FooBarWidget 8y ago
The EU has been moving towards more standardization for quite a while now. The most prominent example is the euro coin. And although the GDPR may seem to many like another regulation to comply to, it's actually a unifying regulation because now you don't have to deal with separate privacy laws for each member state.
IAmEveryone 8y ago
I doubt that EU regulations are more onerous than their US counterparts. And, obviously, the EU is mostly just replacing country-specific regulations, making it about 16x easier to enter the European market. I'd also like people to name specific regulations they disagree with, yet any time I challenge s/o they slink away. In this case, a stripe rep in this thread posted a list of their todos for the EU. Note that literally "putting VAT ID numbers on invoices" makes their top 5! Can't be that bad after all: "localize the invoices, add EU specific payment methods to invoices, improve tax support, make default invoice templates EU compliant with VAT ID"
- saryant 8y ago
  I lead a payments team. US requirements around what we put on invoices: 0 EU requirements around what we put on invoices: Still figuring it out The technical implementation is not difficult. It's dealing with all the lawyers and accountants who have to understand regulations of 27 different countries. There is a significant difference between "not regulated" and "regulated at all". The burden of understanding the regulation itself is a cost, even if the actual compliance turns out to be simple.
lightedman 8y ago
"even though this post is unconstructive and snarky and flame bait" No, it is raw truth, and I'm speaking as someone that does a ton of international business. If the truth hurts you and offends you, then you are not ready for the truth.

tzs 8y ago

From a tax point of view, EU is a lot easier to deal with than the US if you have to collect sales tax in the US. There are two big differences. Let's say I'm selling some digital good online. Consider three purchasers, one in the US in the state of Washington, one in Germany, and one in France. First, how much tax do I have to collect from each? For the German customer, that is easy. It is 19% VAT. I don't have to care where in Germany they live. For the French customer, that is easy. It is 20$ VAT. I don't have to care where in France they live. For the US customer in Washington...it is not easy. There is a state wide 6.5% sales tax, but there are also county, city, and other sales taxes that I have to collect. For example, if the customer is in the city of Seattle, I'm supposed to collect the 6.5% state tax, plus a 2.7% city tax, plus a 0.4% for something called the "Regional Transit Authority"...that's 9.6%. If that person is over in Bellevue instead of in Seattle, it would have been 10% (6.5% state, 3.5% Bellevue). For the US customer, I have to care where in their state they live. Also, tax boundaries are not guaranteed to line up with postal code boundaries, so to do that tax accurately I really would need to collect their full postal address (which since I'm selling a digital good I have no use for except for calculating taxes). Second, what do I do with the tax I collect? For the EU, I sign up for the VAT MOSS system in a single EU country. Then each quarter I have to file a simple form with the tax authorities in that single EU country that simply lists each EU country, what my total taxable sales were in that country, the VAT rate I used, and the amount of VAT collected. I turn the collected VAT over to that single country's tax authorities. Then they deal with distributing it to all the other countries. For the US...I have to deal with each state I collect tax for separately. Each has its own forms. Each has its own place to file them. Each has its own place to pay. If you have to deal with more than just your own state and maybe a handful of others in the US, you pretty much have to use a third party service that specialized in handling all of this. For companies in lines of business that are only barely profitable, this could be prohibitively expensive. If Congress ever decides to require online companies to collect tax for all states, instead of just those that they have a presence in, and they do not require that the states use something like the VAT MOSS system, and they do not require that each state has a single rate for out-of-state non-present sellers, it's going to be nightmare for small companies, and possibly drive many out of business.

ovao 8y ago