Yeah the post didn't seem to be clear, so let me repost my reply to someone here, hopefully it'll make more sense:
So having to deal with VAT is one thing I'd like to avoid, yes.
But the real issue for me is overshooting the magic barrier for my type of s.p.
Right now, I'm taxed 4% on all my revenue, no matter the actual expenses (I have near-none apart from paying animators and electricity). But that flat rate is limited to a max revenue. If I would to go over that max revenue in the past year/past two years of the business, I'd no longer be allowed to be this type business, I'd have to enter the normal progressive tax scheme, and by calculations, would have to pay nearly 3x as much in taxes.
Example. I make 60k€ this year, 80% of that is deducted as expenses (even if it sits in my bank account), 20% of the remaining 12k€ is my tax for the year, meaning I have to pay 2.4k€ as tax. That's awesomely low, is it not?
Now, going over that 60k, to say, 61k earned, that forces me into a progressive tax scheme:
Below €8,755: 16%.
€8,755–25,750: 26%.
€25,750–51,500: 33%.
€51,500–74,160: 39%.
Over €74,160: 50%
With those, I then have to pay 18k€ tax for earning just 1k more.
That's an effective tax rate of nearly 30% (vs the 4% I'm in at the moment).
So in my mind... I earn 60k, get to keep 57.5k~ But if I earn 61k, I get to keep 42k~
By my calc, I would have to earn closer to like 90k€ to keep the same amount as I do now in the current setup.
Granted I could whittle that down a bit by inventing expenses, but I'd never get it down to 4%.
This is a bit simplified as I did not include monthly payments that I have to make as a business here in slovenia, which are currently at about 600€/mo for me, and would have to be made in any case (so the actual effective rate tax is a bit higher for both versions). Concerning VAT, even though I noticed that Patreon is automatically deducting VAT from my gross, I don't actually have to add VAT to prices here until I go over 55k€ yearly revenue.
This is all Slovenia based information.
I don't know about other countries. I hope I made my predicament clear, I'm pretty new to this business stuff and lingo so I'm trying my best here.
