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Thread: Death and Taxes...

  1. #1
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    Death and Taxes...

    Before we get into the nitty-gritty details, let me reintroduce myself to the newer community members as I have stayed in the shadows for quite a while. I'm one of the founders of this project, and my main contribution was developing the foundations of the current server core. As the project grew and taxation obligations arose, my main focus moved away from the actual development. I chose to start the non-profit company in Hungary that helped us going forward in this situation, which leads up to today's topic.

    Recently as part of a regular process, the Hungarian tax authority decided to review our company and they found an issue with how we paid for a specific provider.

    In 2013 we started using services from a US-based company Softlayer to provide servers for our systems. When we set up the account, Softlayer asked us for our VAT ID, and I offered it without fully understanding the implications. The VAT ID is a number used in the European Union to track transactions between companies to manage taxation. I did not realize that by providing this VAT ID that Softlayer would start invoicing us from an EU based company (instead of the US) and in the EU this makes the buyer responsible for the taxes on the goods and services delivered. I didn't know this was an issue, and our accountant did not notice it either. Because of that, we did not report these VAT transactions nor did we pay the related taxes, because, as far as I knew we were a "tax-exempt non-profit" company.

    There is still time to correct the filings and pay the missing taxes without any additional fees. Had I originally paid Softlayer’s US entity we would have paid $6,237 (8,5%) more than what we did pay. Sadly because we can’t go back in time and pay the Softlayer US entity we now have to pay an estimated $10,068 USD in EU back-taxes. In the end this mistake cost us $3,831 USD. The bigger issue is we have to catch-up with these costs now and I feel horrible because my lack of knowledge of the arcane tax codes has put our project at risk.

    I feel doubly conflicted even sharing this situation with you because in October it got out that the project was in financial trouble because donations were lower than our monthly operating expenses. The amazing part that shocked me was that the community reacted quickly and people donated $8,510 in one month. This extra inflow of cash should have put the project in a great place with the ability to continue the way we are with a comfortable pad for unexpected expenses and other yearly costs (e.g., accounting and legal). However now we need to make up for the back taxes and balance that against keeping enough cash to keep the project moving.

    We have always been transparent and open about the financial details of this project because we value the community's trust above all. We're not asking the community for more help, we will use $5,000 USD of the funds we already have, and handful of the staff and myself will pitch in to help me cover the remaining $5,068 USD. This will leave about one month of operating cash in the company and if donations stay at our current goal we should be able to continue the project barring unforeseen circumstances.

    I'm really sorry for the whole mess and take full responsibility for what has happened here. I have always cared for the good of this project and will continue to find ways to keep it going as long as people are interested in it.

    In the end we feel we can navigate this speed bump and get back to our original mission. Above all I felt it is essential to maintain your trust that we share the details of this situation with you.

    May the force be with you,
    Oru

    UPDATE:

    tax balance sheet: https://drive.google.com/file/d/18ay...fN1WYflUh/view

    UPDATE 2:

    tax inspection report: https://drive.google.com/open?id=1qm..._D7zTx4Lo25wJ9
    Last edited by Vlada; 12-22-2018 at 03:18 PM.
    Oru
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  2. #2
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    reserved for future updates
    Oru
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    oru@swgemu.com | www.swgemu.com
    SWGEmu is a non-profit, open source community project.
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  3. #3
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    Oru
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    SWGEmu is a non-profit, open source community project.
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  4. #4
    Junior Member sithrosex's Avatar
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    Taxation is theft :/
    love the emu you helped co-found btw
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  5. #5
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    Quote Originally Posted by Oru View Post
    Before we get into the nitty-gritty details, let me reintroduce myself to the newer community members as I have stayed in the shadows for quite a while.

    The amazing part that shocked me was that the community reacted quickly and people donated $8,510 in one month.
    I have no doubt WE shall rally together and come through once again. Whatever it takes.

    I've already begun reaching out to everyone (in the shadows too, using an alias, since I know how much You & the others hate me 'Nee' ) the moment i saw your OP, just like i assured Vlada we'd do back in October.

    And I'm certain people like Mobyus1 will be doing the same on social-media, not to mention the slew of Vets still lurking about the forums & side-servers after all these years.

    Despite everything, I thank you for the honesty & details... and I'll just leave you with this collective sentiment:

    Last edited by nee2earth; 12-15-2018 at 12:02 PM. Reason: original vid

  6. #6
    Thanks for the detailed explanation. I should have something up by Sunday night to help spread the word.

  7. #7
    Dedicated Misk Brebran's Avatar
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    While the yearly statements do let us know of the financial details of the project, I for one greatly appreciate the openness you have displayed in letting us know the financial situation. Thanks!!

    ;]

    —-break, break—-

    Ladies and gents,

    Lets keep this thread moving to the top for vis along with whatever Mobyus has planned (I miss poking SWIPErs when they stopped in NIKA for a rest).

    Cheers and Merry Christmas Emu!!
    Last edited by Misk Brebran; 12-15-2018 at 04:08 AM.
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  8. #8
    Member Serrabell's Avatar
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    Thanks for letting us know what is going on, it is greatly appreciated! I also will spread the word where I can.
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  9. #9
    Thank you for the continuous transparency and genuine sincerity. I will contribute something next paycheck!

  10. #10
    *Whips out Wallet* "It will be done"


    Merry Christmas everyone!

  11. #11
    Junior Member Mauriac's Avatar
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    Not understanding the intricacies of international tax regulation? UNACCEPTABLE! /s

    Just glad to hear we're still moving forward and that this won't have a detrimental effect. My regular donation will come out this month as usual!

  12. #12
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    The game has given to me, therefore I give back to the game. Don't sweat it, we all make mistakes.

  13. #13
    Addicted Walking carpet's Avatar
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    Dealing with our own countries laws is already something , can only imagine what it should be for you dealing with those international trading laws, Mistakes are made by everyone in this world so please Oru dont put it too hard on yourself , your not alone , where all here and caring for this project and its staff no matter how silent they can be at times , we know they are there, doing there jobs like they should and doing it professionally keeping the focus on end goals.

    The community will respond to this youll see and everyone will spend the holidays with warm in there hearts
    Moby let me know when your video is done so i can share it to all NRN medias
    happy holidays everyone keep faith *S*
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  14. #14
    Senior Member Qui-larek's Avatar
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    /makeitso

    Oops wrong game

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  15. #15
    The Vlada Vlada's Avatar
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    While we are grateful for the sudden influx of donations, I feel like i need say that this thread wasn't posted with that intent at all. Oru and the rest of the staff just wanted to keep the community in the loop. Yes we had some trouble with Hungarian tax authorities, yes we did have some unexpected expenses, but it was all covered and we're moving forward. I think LK said it best:




    On a more personal note, your concern, your dedication as well as your donations are humbling and deeply appreciated.

    Thank you for being awesome.

    The Vlada


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