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Stripe Tax

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Re: Stripe Tax

#51

Post by Ndymium »

I have a nano sized business to cover some server costs in Finland. Here are the EU rules as I understand them:

* Selling goods

  - If selling to private persons in European Union fiscal territory (EUFT), add 24% (Finnish VAT).

  - If selling to businesses in EUFT, no VAT.

  - If selling to anyone outside EUFT, no VAT, but you may be liable to collect and pay VAT to the customer's country's tax authorities.

  - Note that there are separate customs rules!
* Selling electronic services

  - If selling to private persons in EUFT, you need to register to the customer's country's tax authorities and add the customer's country's VAT, and then pay it later to the customer's country's tax authorities. EXCEPT if you only have an office in one country and you are selling to another EUFT country, and you only sell
Now I'm not a tax lawyer, so this is all just my best understanding based on our tax authority's website. I just wanted to get some money back to pay for my ~20 €/mo server costs, and I had to learn all of this. I will be very interested in what this Stripe Tax can do to remove my headaches. :) Of course, since my revenue is so tiny (and thus the money I bring to Stripe), I can't access all of their services AFAIK. And I'm mostly one chargeback away from losing major revenue due to the 15 € penalty. :D

EDIT: Turns out I have no idea how to format lists on HN.

Re: Stripe Tax

#52

Post by Vespasian »

Do they offer a way to set a final price including taxes?

In many jurisdictions your advertised price (e.g. for German users on your german page) needs to include taxes.

Re: Stripe Tax

#53

Post by opheliate »

Ah man, I’m so glad this exists. One of my biggest concerns in monetising side-projects has always been running afoul of sales tax law, and this should hopefully help to assuage some of those concerns.

Re: Stripe Tax

#54

Post by tjpnz »

Side question but what solutions exist for managing withholding? That presents a huge barrier to entry for certain business models, even more so when you have users living in multiple tax jurisdictions.

Re: Stripe Tax

#55

Post by hardwaresofton »

dagw wrote: post #40
hardwaresofton wrote: post #31

A few questions I think are interesting: Does Stripe do well in a world where governments provide efficient and easy online payments? Places like Sweden with Swish. Does Stripe do well in a world where governments provide simplified/near-zero-work tax calculation mechanisms? .

Stripe and Swish solve different problems. Swish is mobile phone based direct bank transfers, Stripe is credit/debit card transactions. The big problem with Swish is that it only works if you have a phone with a Swedish SIM card and a Swedish bank account in a supported bank (which admittedly is most of them). With Stripe you can take money from anyone with a Visa or Mastercard

> Stripe and Swish solve different problems. Swish is mobile phone based direct bank transfers, Stripe is credit/debit card transactions.

At a higher level of abstraction, these are are the same problem -- conveniently and safely paying money to another entity (whether person or business). If we assume that normally someone has a phone at the same time they have their credit/debit card, then the how isn't really that important is it?

> The big problem with Swish is that it only works if you have a phone with a Swedish SIM card and a Swedish bank account in a supported bank (which admittedly is most of them). With Stripe you can take money from anyone with a Visa or Mastercard

This is why I asked inside countries like this -- if you're in Sweden and (I saw a documentary on DW a while back about how cash is actually becoming so rare that handling it is starting to be disincentivized -- ATMs disappearing, banks not wanting to hold cash because of relative liability, etc), let's assume you have a phone with a Swedish SIM card and a Swedish bank account and a phone.

Swish in Sweden is just the only good example I know of, but I think that after a while something that looks like it will be everywhere (US, EU, UK, etc). Cashless economies are generally welcomed by governments and most businesses, most people don't even know the usual privacy/accessibility/etc talking points (opposite from the usual HN reader).

So again, in a situation where it is very likely that you could use Swish with ~0 fees or Stripe, do people continue choosing Stripe?

Or a better question -- how easy would it be to compete with Stripe (without having to offer the key lower parts of the stack that Stripe initially solved)?

BTW Stripe also does ACH -- I use it for larger payments when dealing with clients and it works very well.

Re: Stripe Tax

#56

Post by Naga »

That looks great, but that's a ridiculous pricing scheme. If you invoice $100k in a year, you're paying $4000 to Stripe to manage your sales tax.

A lot of the issues with sales tax are not knowing your regulatory requirements and set up. I'd say that's probably worth $4k, but then going forward you still have to pay them that amount. I'd say it would be more worthwhile to pay an accountant to do that for you, and save the ongoing fee. You will have to pay an accountant anyways to do your tax returns. I'm an accountant and my firm often does sales tax returns for our clients. Now, if you're making $1 million a year, that's $40k you need to pay Stripe for the privilege of not worrying about sales tax, compared to a few thousand you'll pay your accounting firm to do it.

The API and integration options are great and I hope Stripe is successful. Really, if they are, it means I can just charge more for my services.

Edit: As others have pointed out, I'm bad at math. I'm going to leave my shame up here but I realize it's $400, not $4000. Just goes to show you that accountants are just like regular people, and that you shouldn't rely on your accountant doing things off the top of their head not using Excel. The order of magnitude difference really shifts my opinion of it.

Re: Stripe Tax

#57

Post by porker »

MichaelApproved wrote: post #46
blntechie wrote: post #39

Stripe makes such complex products appear so simple. Their product pages are art of work. Amazing company.

Like, every single time. Their execution is amazing. Serious question, have any of their products had a poor rollout? I’m not asking about a feature you’d prefer that’s missing. I’m asking about something being buggy, poorly documented, or having a confusing marketing page.

> Serious question, have any of their products had a poor rollout?

Yes. Payments with SCA2. Very poorly documented when rolled out, and TBH the docs aren't much easier to navigate now once you get off their "do everything immediately client-side" happy path.

I've never known them to be buggy, but in this space there isn't room for bugs.

Re: Stripe Tax

#58

Post by codehawke »

I've been using Stripe for years for my website, codehawke.com. Once you get over a certain amount of revenue and or sales transactions, they file 1099-K directly with the US IRS, they won't miss your failure to report that. I'm not sure if this is new, or I reached some new threshold? They are definitely in communication with the IRS at this point. PayPal does the same thing.

Re: Stripe Tax

#60

Post by tehwebguy »

Naga wrote: post #56

That looks great, but that's a ridiculous pricing scheme. If you invoice $100k in a year, you're paying $4000 to Stripe to manage your sales tax. A lot of the issues with sales tax are not knowing your regulatory requirements and set up. I'd say that's probably worth $4k, but then going forward you still have to pay them that amount. I'd say it would be more worthwhile to pay an accountant to do that for you, and sav…

I think it would be $400?
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