Twitter Blue breaks EU consumer law by showing prices without tax


81 points | by Macha 12 days ago


  • Havoc 12 days ago
    That must surely be willful? Seems hard to believe a company operating on a global scale wasn't aware of EU 101...
    • mnd999 12 days ago
      More likely cutting corners and not doing proper analysis. Seeing how Musk operates if they don’t throw the book at him he’ll do it again.
    • LinAGKar 12 days ago
      Musk probably laid off the guys who were aware of it
  • therealmarv 12 days ago
    To be fair: Many companies do not respect that. I've also seen European based companies doing the same thing many times.

    It's also a little frustrating (for small companies) if you sell across the whole EU single market (and also beyond like e.g. UK and many other countries) and have a very dynamic price frontend depending on user's country detection.

    Btw. does anybody know if I can sell with fixed pricing for whole EU and cut my profit dynamically depending on user's country VAT rate? E.g. I charge 10 EUR for everyone in EU but I deduct 19% VAT in the backend for Germany, 21% for Spain etc. and basically make a little more profit with a German customer ?

    • BrentOzar 12 days ago
      > can sell with fixed pricing for whole EU and cut my profit dynamically depending on user's country VAT

      Technically, yes - some selling platforms like Teachable give you that option. You (they) still have to break out the correct VAT on the inside and receipt to the customer, but this approach just lets you delay calculating VAT until after they've put in their country during the checkout process, while still keeping the same apparent price to the end user.

      • therealmarv 12 days ago
        Sweet, thanks for the answer. Yes I know the right VAT has to be detected/chosen/calculated at the very end with right receipt but at least the more static frontend and more fixed charging does not violate EU laws.
    • eterm 12 days ago
      Price discrimination is illegal in the EU:

      You have to have a single price for goods across the EU, so you shouldn't have a "very dynamic price" depending on their country.

      Unfortunately this doesn't cover "licensing", at least not yet.

      • therealmarv 12 days ago
        I think you are missing an important detail here:

        "When you buy goods online in the EU, prices may vary from country to country or across different versions of the same website, for example due to differences in delivery costs. However, if you buy goods online WITHOUT cross-border delivery you should have access to the same prices and special offers as buyers living in that EU country"

        So when cross-border delivery is done (this is fulfilled by electronic submitting even) I can charge different prices for different countries. All people with IP from country X get the same price. Country Y can have a different price.

        Same price among all countries in Europe cannot be true... you even have different prices on Amazon stores in Europe like on same goods from the very same warehouse etc.

        Other example Netflix or Youtube Premium subscriptions, they are also not the same price among whole EU (for example Denmark vs. Bulgaria)

      • somenameforme 12 days ago
        I am fairly certain that you're misreading that, though as with all regulations - having a legal team on standby is practically a requirement. It's talking about literal in-country discrimination. For example many touristy locations will have a price for locals and a price for non-locals at places like e.g. zoos. That would be illegal in the EU. By contrast it explicitly states that:

        "When you buy goods online in the EU, prices may vary [their emphasis, not mine] from country to country or across different versions of the same website, for example due to differences in delivery costs."

        A nice rule of thumb for translating legalese is to translate "may" to "will" (except when it would benefit you), and to strip off examples. So for instance: "We may share your data, for instance with trusted partners or in response to legal obligations." translates to "We will share your data with whoever we want." And here too you can translate it to simply, "Prices will vary from country to country."

        • eterm 12 days ago
          The example they give is someone from Denmark buying something in Spain, so I'm not sure where you've got the idea of it being an "in-country" rule from.
          • somenameforme 12 days ago
            The point of the regulation is to prevent things like charging foreigners more products or services that will be consumed in-country. The example covers the scenario of "Well what if I'm in a different country than a vendor making a purchase (in which case it is okay for the vendor to charge more), but what I am purchasing will be obtained/'consumed' in the country of the vendor (in which case it is not okay for the vendor to charge more)?" And in that case it's also against the regulations to charge more.


            Rule: "However, if you buy goods online without cross-border delivery – such as when you buy something online which you intend to collect from a trader or shop yourself – you should have access to the same prices and special offers as buyers living in that EU country."

            Example: "Hilda from Denmark wanted to book a hire car in Spain for her summer holidays. She chose the car she wanted to book on the website of a Spanish car rental company. However, when she entered her address to finalise the reservation, she saw that the total price for her car rental increased by EUR 140. [This action is against the regulations.]"

    • ClumsyPilot 12 days ago
      > I've also seen European based companies doing the same thing many times.

      I have this from B2B companies that do not expect to deal with consumers, as businesses do not normally pay VAT

      • zeckalpha 12 days ago
        If the businesses are in a consumer's supply chain, wouldn't VAT apply?
        • RedShift1 12 days ago
          Businesses that do both b2b and b2c will either have a toggle to show prices with or without VAT, show both, or only show price with VAT.
          • Xylakant 12 days ago
            A separation in the registration/login flow is pretty common - you only see the prices without vat if you’re a registered business customer, often they require either a VAT-ID or other proof you’re a business customer.
        • ClumsyPilot 12 days ago
          Businesses reclaim any VAT they pay. You file a monthly/ Quarterly/Yearly report to the taxman either to Pay VAT you collectes or to rexlaim VAT you paid

          Only the end consumer pays VAT.

          • zeckalpha 11 days ago
            That sounds like Sales tax rather than VAT.
    • wdb 12 days ago
      Doesn't it depend whether the company is targeting a customer or a business entity? For the latter it is fine.
    • themitigating 12 days ago
    • LightBug1 12 days ago
      "To be fair: I'll break a law I don't respect". Got it.
      • therealmarv 12 days ago
        Never said that. Everyone should respect and follow it (and it seems it's not enforced across many international companies). But this law is not without its practical problems for selling digital services B2C on the Internet across EU.

        The article leaves the impression as if only Twitter doing it which is clearly not the case here.

  • lapcat 12 days ago
    There are only ~290K Twitter Blue subscribers in the whole world, ~110K outside the US.

    You could say that Twitter Blue is a "small business" in Europe.

    • Xylakant 12 days ago
      Small business or not doesn’t matter here. Twitter blue does charge VAT, they just don’t include it in the sticker price they show up at the beginning of the sales process. The law stipulates that consumer prices must be advertised with VAT included, small business or not.
    • Macha 12 days ago
      Nice try, but no. The EU is much stricter on attempted word games than the US.

      Otherwise we could subdivide businesses up arbitrarily, imagine a hardware store chain claiming their M3 screw line is a small business and therefore deserving of more lenient treatment.

      • lapcat 12 days ago
        > Nice try, but no.

        I wasn't trying anything, except perhaps a joke.

        But seriously, this may be why the EU hasn't prioritized the issue.

  • rlt 12 days ago
    Surely there are more interesting/important things to write about than minor violations of EU law, but gotta harvest those anti-Twitter clicks I suppose.
    • TimPC 12 days ago
      This is more than minor. After not displaying the taxes properly which is already against the law at checkout they aren’t charging the correct VAT including charging 20% in a country with 19% VAT according to the article.
      • DANmode 12 days ago
        Probability this simply turns into a weeks-long debate (of course, ON Twitter) about whether or not the tax structure is too difficult for even large firms to easily comply with?
        • Xylakant 12 days ago
          Fun thing: there are a few, easy to integrate services that will give you all the information you need to remain compliant. You just need to integrate them in your checkout workflow - and then actually report the taxes and pay, which is the much more onerous part.
        • Macha 12 days ago
          US companies need to comply with an even more complicated tax structure (due to the existence of state and city taxes). The only difference with the EU is they need to show it in the upfront price, rather than only in the final billed price.
        • justsomehnguy 12 days ago
          Which is solved everywhere, except US, by showing the end price to the customer and eating/calculating the taxes "under the hood".
    • zorak8me 12 days ago
      It’s newsworthy! The current story being told in tech is that we can lay off significant parts of the workforce with no impact. Following this, the resulting failures are generally hidden or otherwise non-obvious.
    • AlecSchueler 12 days ago
      Enough people found it interesting for it to be written about, get published, then get voted to the front page of Hacker News for discussion.
      • sieabahlpark 12 days ago
      • frankfrankfrank 12 days ago
        • cedilla 12 days ago
          Maybe don't begin with the assumption that everyone that has a different opinion must be an idiot. And then continue with gathering facts - like the fact that every receipt must by the same law indicate exactly how much VAT is included in the price. Then you might not come to such obviously nonsensical conclusions.
    • Fire-Dragon-DoL 12 days ago
      To a European consumer this would be a huge surprise that they could even overlook at checkout, given they are not used to look fir sudden price changes at checkout
    • the_third_wave 12 days ago
      Chalk it down to MDS - Musk Derangement Syndrome. There is something in Elon Musk which triggers people to start acting irrationally just like there is something in e.g. Donald Trump which does the same. It is probably related to the way they - Musk and Trump and others like them - act like they are not bound by the laws which keep others from attempting the types of ventures these often undertake as well as their lack of humility about them. Some are awed by their boldness and become fanboys, others are disgusted by their lack of humility and failure to abide by the standards and fall victim to some form of 'derangement syndrome'. When Musk started gaining successes with SpaceX and Tesla there were many articles posted by the 'fanboy' section of the crowd while those who started to suffer from DS were just waiting for him or his companies to trip somewhere, somehow so they could torch the man. His purchase of Twitter as well as the underwhelming performance (compared to the claimed capabilities) of Tesla's 'fully self driving' system have given them ample fuel just waiting for someone to put a match to.
  • continuational 12 days ago
    OpenAI seems to do that as well. Says ChatGPT+ costs 20 when it's actually 25.
    • KeplerBoy 12 days ago
      That's the thing. It's not 25€ everywhere, as VAT depends on the country.
      • continuational 11 days ago
        Yes, you're supposed (and I think required?) to show the price including local VAT, based on the location of the user.
  • mgbmtl 12 days ago
    Are there any good resources to understanding VAT as a non-EU company? So many resources out there just want to sell their VAT-related services or assume we're a megacorp, but I've never had an EU client complain that we're not charging VAT (small shop, b2b only).

    edit: thank you for the responses!

    • vacooom 12 days ago
      I don't have a good resource that summarizes the various rules, but high-level this is the mechanism:

      For B2B: 1. If the seller is extra-EU, and the buyer in EU, no VAT is charged 2. If the seller is in one EU country, and the buyer is in a different EU country, no VAT is charged by the seller, but the buyer has to do a "VAT reverse charge" (it still nets to 0€ paid, but there is extra paperwork involved) 3. If the seller and the buyer are in the same EU country, they charge the regular VAT rate

      For B2C things are a lot more complicated for cross-border transactions, and there is a difference between selling goods and services. For digital goods, as a seller, you would need to charge the VAT of the country of the _buyer_, and gather two pieces of evidence about the country the buyer resides in, then remit the taxes through the VAT MOSS system. Not fun. That's why Paddle & co are popular.

    • riffraff 12 days ago
      Selling services B2B cross border should not charge vat, so you should be good.

    • masklinn 12 days ago
      > b2b only

      That’s be why. Only the retailer charges VAT, though you may want to be really sure you’re only dealing with companies (ianal and ianac, no idea how case law handles individual padding themselves as companies).

    • Thlom 12 days ago
      When a business buy anything from a foreign seller they should buy it without VAT and calculate and pay VAT on their own.
    • jacquesm 12 days ago
      It all depends on where the service is rendered.
      • mgbmtl 12 days ago
        Part hosting, part consulting.

        For Canada this causes weird situations: we have to charge our province's taxrate to clients in other provinces, and their taxrate if it's consulting.

        However, we don't have to charge taxes for US customers for either (to my non-accountant understanding).

        • jacquesm 12 days ago
          Hosting services are provided where the servers are located, consulting services are provided where the service is performed, for instance if you are consulting 'on site' then it might be construed that you are delivering the service in that location. This can get pretty tricky. Our company is lucky in the sense that the report that we write is clearly sent to the customer which has nothing to do with on-site interviews, there is a very good chance the customer and the target are in different countries (or even on different continents). So we have a very clear tax situation which is just based on the location of the customer and not on the service rendered or where it was rendered because we don't actually work for the target company.

          But in many cases it is not that simple. The best thing you could do if you want to avoid long term risk (up to 7 years where we legally reside) is to ask a tax lawyer for their legal opinion. It will still not absolve you from the responsibilities but it will give you much more support in case there is a problem.

  • orwin 12 days ago
    I do not care for small companies. If foundry VTT do not show prices with tax included, and that's fine. It's a niche product without a ton of money.

    I'd be cross if Steam did the same.

  • thejackgoode 12 days ago
    .. as does Zoom, Patreon and any number of US based companies
  • lclc 12 days ago
    Abolish VAT. It's an anti-social tax, targeting the poor and making business for small businesses more bureaucratic and more expensive.
    • vmilner 12 days ago
      I’ve never understood why left leaning governments don’t get rid of it. Or why the EU is so pro it.
      • magicalhippo 12 days ago
        What's the alternative?

        Income tax doesn't work well since the rich can ensure they have low or even zero taxable income.

        Wealth tax doesn't work because the rich just move to Switzerland or similar.

        At least with VAT, when the rich go buy their fancy goods and have dinners at restaurants (VAT on services here), they pay proportionally more in VAT.

        This might be a dumb question, I'm not an economist by any stretch.

      • arlort 12 days ago
        > why the EU is so pro it

        It's mostly a non issue in european politics tbh, the debate tends to be at the National level on the specific rate. But abolishing it outright is not something that is really discussed

        > why left leaning governments don’t get rid of it

        Because if you cut taxes you need to also cut benefits?

        VAT is easy to apply and makes tax evasion harder. What's there that would make left-leaning legislatures remove it?

        • Macha 12 days ago
          Sales tax is a regressive tax which affects the poor more, so operating on pure ideology a left wing government would want to cut sales tax and replace with higher income tax.

          However even the left wing EU governments that exist don't have unlimited time and goodwill, so most of them will leave that alone rather than get the bad PR from raising more visible taxes or cutting services to compensate.

          • arlort 12 days ago
            Referring to VAT as a less visible tax is ... a take, consumption taxes are around 20% of total tax income in the OECD, you'd have to tax income a lot more to make up for that, it's not really viable. (Income and profit taxes currently make up 33% for comparison)

            And the effects on lower incomes gets mitigated by transfers and support programs and that tends to be good enough for left leaning legislatures

          • vmilner 12 days ago
            Yes - certainly the Uk experience in the Thatcher era was to reduce income tax by increasing sales taxes. (The overall tax burden for the average family increased slightly over Margaret Thatcher’s administration). Subsequent labour governments didn’t/couldn’t reverse the process.
      • Macha 12 days ago
        The EU doesn't mandate any rate of VAT, just how it gets applied if you do have it. Governments are free to exempt classes of goods from VAT (except on the basis of national origin, as that would go against the EU free trade rules), and could even set the headline rate to 0 if they wanted.
        • masklinn 12 days ago
          That’s not quite true, the PVD very much intends to set a minimum rate of 5%, zero-rating is considered an exemption / derogation, and usually only allowed for continuing pre-EU zero rating.
      • sokoloff 12 days ago
        A sales tax of any form has the property of catching and taxing almost all economic activity. That’s a major advantage to fund government spending.

        This broad taxation is bad when it taxes staple food items. It is good when it taxes spending sourced from the underground economy. If you want to cover for the first case, I’d rather see us give direct cash transfers to the poor and then let them (and everyone else) pay the tax.

      • cinntaile 12 days ago
        You pay tax based on your consumption, it makes a lot more sense than paying income tax if you ask me...
        • masklinn 12 days ago
          It’s a highly regressive taxation scheme putting the burden on those who can east afford it: the lower your discretionary income compared to disposable income, the more you sink into VAT.
      • bobcostas55 12 days ago
        The distortionary effect of VAT is much better than taxing income. If you're worried about its relative impact on poor people you can just redistribute more (which EU countries obviously do).
  • nprateem 12 days ago
    I wonder if they can go after AirBnB and all manner of other sites that hide service fees, etc. until the checkout page too.
    • alborzb 12 days ago
      Airbnb does show full fees when showing prices on search pages in certain locations in Europe (and also Australia too).
  • flappyeagle 12 days ago
    Why are we all cops now? I see no hackers here.
  • l5870uoo9y 12 days ago
    Twitter breaks EU agency's rules for its latest product and gets free publicity in return. Wonder to what extend this is deliberately practiced by companies?
    • Macha 12 days ago
      I know there's the common view that "any publicity is good publicity" but I struggle to think who would view this article while unaware twitter and twitter blue are things.
  • t2hrow 12 days ago
  • zoklet-enjoyer 12 days ago
    Haha so what? If I ran an online business I wouldn't attempt compliance with foreign laws
    • jacquesm 12 days ago
      That's why you're not running an online business.
      • zoklet-enjoyer 12 days ago
        That's not why. I did run an online business many years ago and disregarded laws in other countries. Not my country, not my problem.
        • jacquesm 12 days ago
          Periodic reminder not to take legal advice from HN.
    • joaonmatos 11 days ago
      It’s okay if you don’t want to change your frontend for a foreign country, you just can’t do B2C business with a market of half a billion people :)