VAT not shown on pricing page and billing page

Kernic

When I go to pricing page or in my profile to billing page, I get the prices shown without VAT.
This isn't legal in Germany for sure and I think in whole of EU. Pricing must always be shown with local VAT. I checked German law and it's not enough to do this in checkout - it must already be visible on pricing page.

All price listings will show final price including VAT.
There must (legally at least in Germany) be two means of pinpointing the location of customer. It would be okay to use IP adress and provide a dropdown where the customer could change the location if IP pinpointing wasn't correct.

kirkmc

Kagi is not in Germany, so they don't have to abide by those rules. I have never heard of a country that requires that user location be taken into account. If Kagi did do this, they would need to have a menu with every country in the world, and the appropriate VAT/sales tax for that country.

They do say "plus sales tax," on the pricing page, and I've already suggested that that should change, since VAT is not technically sales tax, which is the term used in the US.

xx

kirkmc Being outside Germany or outside the EU does not automatically exempt a company from EU law. If a company sells digital services to EU consumers, it generally has to apply VAT based on the customer’s location and show the final VAT-inclusive price upfront, not just add it later at checkout. That is the same general reason non-EU companies still have to comply with GDPR when they serve EU users.

Kernic

kirkmc They are doing business in Germany, aren't they? I was able to subscribe to Kagi with German adress and German bank account.
They even use a payment provider from Netherlands (NL is part of EU too) to process payments on EU market - so they are actively targeting EU citizens as customers. Consequently they must follow the laws in the markets they are doing business.

carl

xx Only if the people who are "EU consumers" are considered property of their respective government or of the EU. But why should other nations take any heed to such ideas?

Women from Saudi Arabia aren't allowed to wear bikinis according to the law of their country. But if a Saudi woman wears a bikini in Germany, should the Polizei arrest her and charge her accordingly?

Kernic

carl You see this wrong. When a German woman goes to Saudi Arabia, she also isn't allowed to wear a bikini. Because you have to follow local rules.
To make it more clear: Would you think an US company is allowed to sell porn to Saudi Arabias citizens? Or can I, as a German, sell beer to US citizens below 18 (in Germany beer can be bought from age of 16)?

So when Kagi is doing business in Germany and the EU - what they are doing - they have to follow the local laws.
Because of this, many US/non-EU companies also have to follow the GDPR, the moment they do business with EU citizens.

kirkmc

Kernic No, they're doing business from the US. They have no legal presence in Germany, or any other country, regardless of who their payment provider is.

Kernic

kirkmc But they are doing business IN Germany, as I'm IN Germany. The service is provided to me IN Germany. Even in German. They even have servers in Europe.
EU law must be followed by anybody doing business in EU, as this is the case in most other countries of the world when you do business in it. Even US has laws that apply to companies not based in US.

But let's bring you some examples, that you may understand how international business and law works:

You aren't allowed to sell cars in EU that aren't up to EU standards, even when you are a non-EU company.
You aren't allowed to sell drugs that are allowed in your country in the EU, when they are forbidden there.

And the other way round for me as German:

I'm not allowed to sell e-books that are banned in the US to US citizens.
I'm not allowed to sell digital erotic movies that are allowed for 16+ in Germany to US citizens under 18, when it's 18+ there. Example would be the movie The Dreamers (2003).

So Kagi has two options: Comply with the law in the market they are doing business in OR stop doing business in these markets.

xx

kirkmc Kagi still has to follow EU law to offer products to EU consumers.

It's the same way US companies have to follow GDPR regulations to serve customers in the EU. Yes, US companies can technically tell you to buzz off but it's it's not allowed if you want to follow EU law.

Is it worth putting a target on Kagi's back for potential fines when they can just comply? It's not like this is a government overreach like age verification.

kirkmc

carl

@Kernic

I would be careful in concluding that foreign laws apply to Kagi.

If you think about it, then Kagi would have to adapt to every law in every country in the world they serve. Including blocking search results which disrespect German politicians, since it is illegal to insult the Chancellor in Germany. They would also have to block all results which goes against the ideology of the Chinese Communist Party, since that is law if you want to do business in China. As well as block gambling websites to follow the law in Brazil, results that insult the monarchy in Thailand, and so on.

While I agree that it's a good idea for Kagi to present prices with taxes included, or with a dropdown country selector, threatening a company in the manner which you are doing is never a good way to get your feedback heard.

When a customer starts talking about "illegal" and the law in this way, that is understood as very hostile and most businesses will cut contact with you then and there and refer you to speaking only to the lawyers. Because you're talking like you're going to sue them or like you're about to file a report against them with the Polizei.

In practice, no country tries to go after foreign sellers. The responsibility is put on the purchaser within their jurisdiction. They don't go after sellers of physical goods, much less digital services.

Kernic

carl they do, may not after small ones like Kagi, but bigger ones already got troubles.
And I do no threatening anybody, I just like to help Kagi here. Any competitor could report them and then this must be prosecuted.

It’s up to Kagi, but it should be rather easy to implement, so why not go compliant? IP geolocation check and a drop down, behind a database with VAT, dynamic price calculation. Done

kirkmc

carl They do go after foreign sellers, but only the biggest ones. Like Germany and Twitter, Facebook, and other social media providers regarding certain elements of the past. Many countries have similar restrictions on the big social media services, but as far as I know, they don't have the same restrictions on search engines, which are only serving as databases, and not actually serving illegal content.

But this thread was started about VAT. Most services I see do as Kagi does, specifying a price, plus saying that there is sales tax where obligatory. Because what do you do, geolocate people based on their IP address? If they're using a VPN, they may appear to be in a different country. Or what if someone is traveling, and not in their home country? The only way to know is when they submit a payment method, which is linked to their country.

Kernic

kirkmc In my experience most services show me as German the final price. Some go the most easy way: Have a fixed total price and deduct the fitting VAT then. So it's always 10 USD, but in some countries more is left then in others.
I think Notesnook does it that way.

But have you examples, where it is not the final price?