What if you just…did nothing. What would happen?
Ask HN: How do you handle VAT / Sales Tax accounting as B2C SaaS?
11–20 of 89 posts
Re: Ask HN: How do you handle VAT / Sales Tax accounting as B2C SaaS?
#12I happen to use Paddle. Happen because Stripe isn’t available in my country and Lemon Squeezy wasn’t around / was very new back then. It’s OK but it really irks me that they don’t really fight chargebacks. (I haven’t had many but the fee they throw on you automatically is so hefty for a B2C.) Their V1 API (not Paddle “Billing”) is…not the best I’ve used.
AFAIK fees are put by banks not the Paddle/Stripe. Stripe also 'charges' $15 for any dispute, even if won.
Re: Ask HN: How do you handle VAT / Sales Tax accounting as B2C SaaS?
#13i think this matter is confused because it contains two distinct things: a.) accounting for the VAT owned to dozens different countries and b.) "remitting": actually paying the VAT to the tax agencies of dozens different countries many services help with part a.), but i haven't found a single one that helps with part b.) - you can only circumvent the issue by selling on a platform (like the different app stores or "F…
Can you elaborate on your bad experiences with Paddle?
Re: Ask HN: How do you handle VAT / Sales Tax accounting as B2C SaaS?
#14I happen to use Paddle. Happen because Stripe isn’t available in my country and Lemon Squeezy wasn’t around / was very new back then. It’s OK but it really irks me that they don’t really fight chargebacks. (I haven’t had many but the fee they throw on you automatically is so hefty for a B2C.) Their V1 API (not Paddle “Billing”) is…not the best I’ve used.
Agreed on the chargeback fee they really dont give a shit. I have learned to deal with their V1 API, it has a lot of weird quirks. Kinda wish they offered a better upgrade path to the new billing.
Re: Ask HN: How do you handle VAT / Sales Tax accounting as B2C SaaS?
#15We use Sphere ( https://www.getsphere.com ), and it’s the only good solution I know of for international VAT that handles everything end-to-end (registration, calculation, filing, and remittance). We use Stripe Billing, and we actually use Anrok for US sales tax compliance. They’re solid domestically, but they don’t do international registration, filing, and remittance; they only do calculation. There are also firms…
Hey, just curious, since you actually might know about this. My country (Norway) has extremely strict import rules. All items must have the VAT paid on them, and if they don’t, you have to pay the VAT plus an administrative fee in order to pick up the item. However, there have been plenty of times where I paid VAT to the store, but then I still get charged VAT upon pick up. According to the postal service, this is because “the company didn’t register their VOEC number electronically for the shipment” and then they tell me to get the company to refund the VAT, and I guess go fuck myself for the administration fee.
Leaving aside the utter garbage that is the Norwegian postal system, do you know what that means? Is that something that just happens as a matter of course when using Sphere? Is that a common feature among platforms that offer the service? I have no clue how unique Norway is or isn’t in this regard, but I imagine countries in general want to collect VAT for imports.
Re: Ask HN: How do you handle VAT / Sales Tax accounting as B2C SaaS?
#16One of the most horrible aspect of the tax system is that individuals are held responsible for ensuring that they calculate and pay the correct amounts. It's kind of messed up that not only we have to pay tax, but the government doesn't even have the responsibility of telling us how much we owe it or what specific work which it did is covered by the payment.
Every other entity on this planet who wants to obtain money from another entity needs to tell them exactly how much is owed and exactly what goods and services are covered by that payment.
But the government not only doesn't have to report what work it did to warrant the payment, it doesn't even need to tell us the specific amount which we owe it; it's on us to figure that out... Figuring that out is complex and sometimes expensive too; many people can't afford. The gig economy is creating complex tax situations even for poor people. If we calculate incorrectly, then we suffer consequences. It's oppressive.
I know some people will read this and think I'm off on a wild tangent... But my friend, I'm actually addressing the core of the issue here. It's you who is on a wild tangent addressing superficial edge cases. The superficial cases aren't worth discussing; VAT, GST, CGT, income Tax and all other acronyms... Just don't participate in this system. Sell your business, change countries, go on unemployment benefits or whatever until this issue is fixed. How can a rational person operate in this environment? I can't believe some people work for fun. It's the most rigged, boring game ever.
Re: Ask HN: How do you handle VAT / Sales Tax accounting as B2C SaaS?
#17EU SaaS solo owner here (about 10 years so far). I gave up on B2C entirely. It's just too much hassle. My accountant starts screaming in horror whenever I mention VAT MOSS. Whenever I looked into the rules, I saw a snake pit with moving snakes.
Additionally, B2C has tight margins, so eating into those hurts a lot.
Whenever I looked at companies like Quaderno, they looked great, but when I actually tried to use them, it turned out that their solutions are far from perfect and often incomplete or simply incorrect (e.g. I would not comply with local laws in my country). This is a common theme: even B2B invoicing, which is far simpler, is not implemented correctly by companies that say they do "invoicing". For example, Stripe invoicing won't do JPK_FA or KSeF in Poland (SAF-T reporting), which pretty much makes it a no-go. Many service providers are also incapable of producing bi-lingual invoices.
I ended up using Braintree (don't make that mistake) and now I'm migrating to Stripe — but for payments only. I have my own subscriptions and invoicing, and I use a local (Polish) company that has an invoicing API to produce JPK_FA/KSeF data.
If I were to even look at B2C, I wouldn't even consider doing anything on my own. I would go with Paddle, carefully considering my margins.
I realize this is not the answer you were looking for but it's a real-life data point.
Re: Ask HN: How do you handle VAT / Sales Tax accounting as B2C SaaS?
#18At risk of high-jacking this thread, some Merchants of Record (i.e. Paddle) require biometric authentication of company majority owners, which I find too invasive. Are there any Merchants of Record that don't?
Sure, they handle taxation amongst many other conveniences. But despite their assertions of security and safety, we identified dumps for sale on the darknet of such biometric DB data exfiltrated from (continuing the Paddle example) Onfido. It left a sour note in our mouths and a lingering feeling of distrust, especially after we were recently the target of a spearfishing campaign using data obviously sourced from such auth providers.
Re: Ask HN: How do you handle VAT / Sales Tax accounting as B2C SaaS?
#19How about using Paddle/etc, but just for new subscriptions and just in regions where it's relevant, and handling migration later (or wait for churn to slowly whittle away at it for you)?
I've also used https://payproglobal.com/ quite successfully, which nobody else has mentioned here as a merchant of record option. They're less polished than other options, but they've been a godsend for selling outside the EU + Anglosphere markets: they've managed card fraud far far better, and have a very impressive breadth of the local payment methods that you'll 100% need if you want to sell in those markets.
Also seen some enthusiasm for https://www.creem.io/ recently as an MoR option although I haven't tried them myself.
Oh, and it's worth noting that using an MoR isn't just helpful for sales tax. It's also significantly easier for your own accountancy and local tax filings more broadly: it effectively turns N invoices into 1. Very very easy to handle, process & document.
Re: Ask HN: How do you handle VAT / Sales Tax accounting as B2C SaaS?
#20i think this matter is confused because it contains two distinct things: a.) accounting for the VAT owned to dozens different countries and b.) "remitting": actually paying the VAT to the tax agencies of dozens different countries many services help with part a.), but i haven't found a single one that helps with part b.) - you can only circumvent the issue by selling on a platform (like the different app stores or "F…
In case someone thinks this stuff is simple and you can go with country codes for VAT: have you heard about countries like AX (Åland Islands, part of Finland)? Do you remember that GB used to be within the EU VAT zone, but now isn't? How about handling XI (Northern Ireland) and the migration of customers from GB to XI? Or (one of my favorites) — do you realize that parts of ES are not within the EU VAT zone (for example, Canary Islands)?
This stuff is crazy. B2B sales are relatively simple, but B2C is a nightmare.