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Stripe Tax

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Re: Stripe Tax

#211

Post by robertlagrant »

kmoriarty wrote: post #114
scubakid wrote: post #98

Earlier quoted context omitted.

With this new Stripe solution, do you still have to register for licenses to collect tax everywhere and remit the sales tax to various US states and foreign governments? Unless I misunderstand, that still sounds prohibitively onerous for anyone working as a solo dev or very small team..

Good question! Today you would still need to register yourself, however we tried to make this as easy as possible in two ways: 1) We monitor your transaction and compare them to local thresholds so you know where/when you may need to register: https://stripe.com/docs/tax/set-up#monitoring-your-obligatio... 2) We provide documentation/links to the exact sites to register: https://stripe.com/docs/tax/registering#list-o…

This is a really useful toolkit. Going much further might make you into the actual legal entity, which could have consequences I don't fully understand (but is perhaps Stripe's plan?)

Re: Stripe Tax

#212

Post by spoonjim »

rriepe wrote: post #207

Taxes are bad. Governments absorb wealth. They don't create wealth. No government has ever created wealth.

LOL. I wonder what kind of information diet one would have to construct, and how long one would need to adhere to it, to get oneself to a place where they sincerely believe this.

Re: Stripe Tax

#213

Post by yardstick »

rriepe wrote: post #207

Taxes are bad. Governments absorb wealth. They don't create wealth. No government has ever created wealth.

Didn’t DARPA essentially create the Internet? Lot of wealth has been created here thanks to them.

Re: Stripe Tax

#214

Post by pier25 »

vvoyer wrote: post #5

I was lucky to be part of the beta for my SaaS ( https://turnshift.app ) and I must say this new feature simplifies things A LOT. Especially as a EU business owner, I previously had to sync every VAT tax rate possible, use a complex workflow to know if a customer needed to pay taxes or not, link tax rates to customers, and create taxes reports for my accountant. Stripe tax does all of that automatically, based on the…

So what are the advantages of Paddle?

Re: Stripe Tax

#215

Post by Silhouette »

sudhirj wrote: post #192
Silhouette wrote: post #129

Earlier quoted context omitted.

Here's some current Stripe UK pricing, confirmed on their site today. Baseline of 2.9% + £0.20 for international card payments. (It's reduced to 1.4% + 20p for European cards.) Add 2% for currency conversion. The exchange rate used is stated as "the daily mid-market rate provided by our service providers". Add 0.5% for Billing if you're using subscriptions. Add 0.5% more if you're using this new Stripe Tax functional…

The tipping point is the 2% for currency conversion, but keep in mind that this is happening either way on Paddle as well, just not going to Paddle. Paddle takes 5%, then the entity that converts from USD to your currency (Payoneer / wire transfer bank) takes the 2% or more. Stripe calls it out clearly and gives you your money in your own currency.

If you're selling a B2C service (so the really horrible tax rules apply) for say £10/month, that extra £0.20 is another 2%. Stripe's total cut for an international sale with currency conversion is then nearly 8%, even if you don't use any of their other services with their own extra costs and you never have any refund or chargeback costs to amortize.

Stripe is crazy expensive these days.

(There are other parts in the fees charged by other services as well, but those also aren't like for like comparisons. I'm just saying that 5% as a baseline wouldn't necessarily be that high compared to services like Stripe.)

Re: Stripe Tax

#216

Post by rriepe »

spoonjim wrote: post #212
rriepe wrote: post #207

Taxes are bad. Governments absorb wealth. They don't create wealth. No government has ever created wealth.

LOL. I wonder what kind of information diet one would have to construct, and how long one would need to adhere to it, to get oneself to a place where they sincerely believe this.

It's usually just tax forms when you turn 18

Re: Stripe Tax

#217

Post by kmoriarty »

corentin88 wrote: post #190
theflyinghorse wrote: post #171

The feature is of course very nice, but the pricing is steep at 0.5% of your transactions. So I'm giving away 0.5% of my revenue (provided all of my revenue comes from sales) for the privilege of having my taxes calculated? That's on top of the 2.9%+30c per transaction that I already pay stripe?

That’s also on top of Stripe Checkout (0.5%) and on top of Stripe Radar (0.5%). Stripe cuts about 5% of every SaaS in the end. That’s a lot of money.

Hey! Kelly from Stripe here: Just to clarify, there's no additional cost for using Checkout, and Radar is per small per transaction fee (or included free with Stripe if you're just starting out!), not a variable 0.5% fee.

Re: Stripe Tax

#218

Post by R0b0t1 »

comex wrote: post #185
kevin_thibedeau wrote: post #178

Earlier quoted context omitted.

You don't have to collect tax for states you don't have a presence in. They have no jurisdiction outside their borders.

That used to be the law, but is no longer as of 2018: https://en.wikipedia.org/wiki/South_Dakota_v._Wayfair,_Inc .

A bad ruling. To let it stand, the more reasonable interpretation is that the purchaser has to remit sales tax to their own state. But it may not stand on further challenge. For example, why should the state the items are leaving not be entitled to sales tax?

Re: Stripe Tax

#219

Post by pimterry »

Silhouette wrote: post #204
pimterry wrote: post #127

Earlier quoted context omitted.

I use Paddle, they do file 99% of your taxes for you. In effect, they sell the product to customers, and handle all the tax on that side, for every tax regime in the world. Meanwhile you act as a company with a single B2B client and one invoice a month (covering Paddle's net sales minus 5%) instead of N invoices. They send you an email every month with your 'reverse invoice'. As accountancy goes it's extremely easy,…

How do you find working with Paddle? They've been on our shortlist for a new project and we've heard only positive things from people who actually use them. However, their terms could make any lawyer or company officer who actually read them visibly wince, and so far that has prevented us from engaging with them despite their clear advantages over the traditional payment services.

Are there some specific terms in their legal bits that you're concerned about?

Personally, they've mostly been very good. The product works, it was very easy to set up and it does everything out of the box, and it's made sales tax & accountancy almost completely disappear.

I have occasionally run into issues or bugs, and their API is a bit of a mess, but nothing show stopping and their team has been reasonably responsive and sorted everything out very reliably. That's noticeably got better & faster recently, I think they're beefed out their support team a lot in the last year or so.

If you're selling a new product as a substantial business, I think they're good but there are other options to look at too and there are tradeoffs (5% is high, you could probably do your own customer accountancy etc in house).

If you're a solo dev/small indie, or just getting started though I think it's a no-brainer. It's just so much quicker & easier than doing everything yourself.

Re: Stripe Tax

#220

Post by kmoriarty »

jerrre wrote: post #75
Ndymium wrote: post #51

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 the…

There are also a lot of thresholds that might apply to your situation. More rules to look up, but could simplify it to having less administration if your revenue is under a couple K's

Good point! And with Stripe Tax we'll monitor how close you are to those thresholds too, so you'll know when and where you need to register as your business grows or sells into new markets.
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