Alternatives to ShareIt/MyCommerce/Digital River

[barteko]

If companies have a dispute over an invoice - for example where one company can't be bothered to pay their debts to the other - then no actual law is being broken. It'a a civil matter. Not something the police can get involved with.

The company that wants to be paid has to sue the other through the courts. Once the court decides then police or balifs can get involved.

Basically until you sue and a court makes a decision in your favour then DR are not breaking any law and can't be stopped.

Sure, but if a company (DR) disputes debt towards every company it had an agreement with, does it in a planned way, lies, as it knows it goes bankrupt and still does business, while their financial operations look like a Ponzi scheme... well, then Prosecutor Office should be interested.

Also, DR is the institution that sells physical and digital goods on behalf of others. They collect VAT and sales taxes and are supposed to payout those to the destination tax authorities. If they do not pay it, it's no longer a civil case. If they do pay it, the amount is "somehow" calculated on some transactions that did in fact happen... then how can they dispute the same fact with businesses as us?

I wonder when is the VAT collected by DR due to EU member states. Is it monthly, or maybe quarterly, like in case of VAT MOSS (which is suitable only for electronic goods). If monthly, well, they must have paid it already at least twice.

DR is Merchant of Record ("As merchant of record, we take on the financial and legal liabilities of selling internationally"), not a carrot reseller. Even if a carrot reseller cheated on you, you can go to civil court, but if he also cheated on tax authorities... well, that's a completely different story.

[barteko]

They even acquire new merchants - this video was uploaded 10 hours ago:
...

Somebody wrote an interesting question several pages back... do the recent problems affect only clients of Digital River GmbH?

My first thought when I read about $100 monthly fee and $2500 minimum payout back on September
16th was - they want to get rid of small companies and do business only with the big ones. Of course back then I couldn't suspect they will not payout anybody on September 30th.

[grujicd]

I also tought they want to get rid of small players. But then the question would be why? All processes are automated (right?), it's not like they need x more people to handle x more vendors. Once you're set up, it's mostly autopilot. In most cases you were contacting them on behalf of end users. So support burden scales with number of end users, i.e. number of sales, and not with number of vendors.

[DrOli]

I think that only option to get m-o-n-e-y will be to sue them and that as a joint process of as many as possible affected parties. I would not be surprised that value will go into millions (I think that I saw companies affected with 200k; for us it is more than 60k).

Would somebody be interested? Any idea how this can be triggered or if somebody already started something how can additional parties be connected?

We can continue to write here and time is just passing which is reducing probability that we will get anything.

[DrOli]

Btw. do refunds work in last days? I am tending to trigger refunds and hope that customers will pay over new payment processing partner (if they get m-o-n-e-y).

[Syncsro]

We have triggered hundreds of refunds, on Monday, only one customer confirmed he got the money. But it's too early, and another thing is that many customers don't read our emails

[grujicd]

I can confirm that yesterday's refunds got processed but still don't know whether money will actually get back to customer's accounts.

And I'm refunding lightly, since it's immediately displayed as a negative balance for the current month. I don't want to trigger some "too much negative balance" rule to get me locked out. I assume if you're locked out all funds will be frozen for 180 days and then it's game over. We don't know whether it's still a game, but we're playing

[fuseaudiolabs]

Hi barteko,

I wonder when is the VAT collected by DR due to EU member states. Is it monthly, or maybe quarterly, like in case of VAT MOSS (which is suitable only for electronic goods). If monthly, well, they must have paid it already at least twice.

Depending on which of their companies collect the money from the customers, they might still be paying VAT due to EU member states. I.e. I don't know who our customers' contractor is when they buy our software via DR. Probably not the MC/DR GmbH but an entity which is still good and able to pay out VAT.

Btw. MOSS VAT is collected every 3 months as far as I'm aware.

DR is Merchant of Record ("As merchant of record, we take on the financial and legal liabilities of selling internationally"), not a carrot reseller. Even if a carrot reseller cheated on you, you can go to civil court, but if he also cheated on tax authorities... well, that's a completely different story.

That's the ironic part: Since we do proper bookkeeping the two statements we received for July and August have been booked already and thus we have to pay the respective VAT to the authorities, which we, of course, did. In other words, we paid VAT for money that we never received and that we might get back in 2025 or god knows when once MC's bankruptcy is official.

Best,
Ray

[yps]

That's the ironic part: Since we do proper bookkeeping the two statements we received for July and August have been booked already and thus we have to pay the respective VAT to the authorities, which we, of course, did. In other words, we paid VAT for money that we never received and that we might get back in 2025 or god knows when once MC's bankruptcy is official.

Same here.

But if the payment from DR never happens, we will be able to claim the VAT.

Technically, it we could claim it even now, by disputing the credit note from DR. (They state you have 30 days to do so, but legally, you can dispute any reverse invoice within three years.) In that case, the invoice is void, you can claim back output VAT, and they must pay back any input VAT they may have deducted from it. And if they don't, it will be tax fraud.

[IaES]

That's the ironic part: Since we do proper bookkeeping the two statements we received for July and August have been booked already and thus we have to pay the respective VAT to the authorities, which we, of course, did. In other words, we paid VAT for money that we never received and that we might get back in 2025 or god knows when once MC's bankruptcy is official.

Same here.

But if the payment from DR never happens, we will be able to claim the VAT.

Technically, it we could claim it even now, by disputing the credit note from DR. (They state you have 30 days to do so, but legally, you can dispute any reverse invoice within three years.) In that case, the invoice is void, you can claim back output VAT, and they must pay back any input VAT they may have deducted from it. And if they don't, it will be tax fraud.

In the UK we can handle VAT invoices in two ways. We choose one method and stick to it. We can change method but obviously not often and obviously not abuse the system to minimise tax. We have regular VAT inspections and they do check the books to make sure you are correctly using whatever method you chose.

Method 1. Pay and claim back VAT based on invoices. For example we generate an invoice to customer and we must pay the VAT even if we didn't get paid. Also invoices from suppliers where we claim back the VAT on invoices from supplier even if we haven't paid the supplier yet.

or

Method 2. A scheme called "Cash Accounting" usually used by smaller business that don't buy much. This is where VAT is only paid or claimed back when the payment is received or made. So I generate an invoice to a customer but only pay the VAT when the customer actually pays me. I can also only claim back the VAT when I actually pay the supplier.

A company is not allowed to switch from one method to the other. They have to choose a method and stick to it. Whichever method is chosen has to be used for both input and output tax.

I always did the cash accounting method. Although, in the case of DR, I was never billed for any VAT anyway. And, as I said, tax inspectors come to your office and inspect your accounts system to make sure you're doing it right. They're actually quite nice people and I never had a problem with them. No I didn't sneak a 50 quid note under his biscuit.

[yps]

In Germany, this is called "Sollversteuerung" (VAT paid in the month the invoice is generated or received, or the services/goods are delivered), and "Istversteuerung" (VAT paid when the actual payment is received).

We are a GmbH, and Sollversteuerung is mandatory for us, unfortunately.

PS: And in the case of the DR credit notes (for German vendors), we are not billed VAT, but they give us the (output) VAT on top of our payments, and we forward it to our tax office. And DR claims it back as input VAT in their tax returns.

In other words, if we dispute the credit note and claim the VAT back, they are obliged to refund their tax office as well.

[IaES]

In Germany, this is called "Sollversteuerung" (VAT paid in the month the invoice is generated or received, or the services/goods are delivered), and "Istversteuerung" (VAT paid when the actual payment is received).

We are a GmbH, and Sollversteuerung is mandatory for us, unfortunately.

I'm a LTD. Basically the same as a GmbH. We can still choose which method. The taxman obviously prefers invoice accounting but we can still choose cash accounting if we want. I can't remember if there's a threshold on value of sales where invoice accounting is compulsory. If there was I never reached it. My sales were always less than 100K per year and my costs are pretty much zero so I just didn't want to expand anyway.

[yps]

I think there is such a limit here as well, but it is rather low, so it doesn't fit for most GmbHs.

Anyway, if they don't pay, we'll claim back to the VAT. Simple as that. It's just another bad debt.

[IaES]

This forum is really strange isn't it.

I'm a member of a few other forums. A car forum, a software dev forum and even a garden pond forum.

But all of us here have been brought together because we're all in the same boat with DR. We might have no common interests outside of DR but this here seems to be a nice group of people.

I wonder if in a few month's time when all of this DR stuff is behind us will some of us still come back here to talk about . . I don't know. The weather maybe. Or even just keep giving feedback on the best MoR or trends in OnLine payments.

[tom2024]

We might have no common interests outside of DR but this here seems to be a nice group of people.

Our common interest is getting paid for our hard work, isn't it? And I have great respect to people who work hard. It is not easy to be small ISV. Governments do everything to make it harder for ISV to conduct small business by implementing absurd VAT/GST regulations. Back in 2000 things were so much easier...