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Ask HN: How do you handle VAT / Sales Tax accounting as B2C SaaS?

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Re: Ask HN: How do you handle VAT / Sales Tax accounting as B2C SaaS?

#81

Post by encoderer »

omnimus wrote: post #76
encoderer wrote: post #65

Earlier quoted context omitted.

It’s not America’s fault that Europe strangles their companies with red tape. The main thing is to just get started, start growing, and then you can figure all of this stuff out.

Its not Europes fault Americans want to sell there without respecting local laws.

I’m not saying you should never pay taxes, but are you seriously worried about little guys making under a million a year? Internet based companies are not using your roads or calling on your firefighters or getting protection from your police, and since the time I wrote that post the largest companies in the world have saved like a billion dollars using Irish tax shelters.

Let little guys be. The deck is stacked against ever hitting a million+. They are not a threat to your way of life.

Re: Ask HN: How do you handle VAT / Sales Tax accounting as B2C SaaS?

#82

Post by randyrand »

I sell a physical product from the USA worldwide.

VAT and all other relevant taxes are entirely handled by the person importing it, before the product is released from customs. I don't even think about it.

Perhaps SAAS people just should physically send a "activation code" in the mail? Then the person importing it can just handle it.

Re: Ask HN: How do you handle VAT / Sales Tax accounting as B2C SaaS?

#84

Post by CER10TY »

dinkblam wrote: post #61
jflessau wrote: post #13

Earlier quoted context omitted.

Can you elaborate on your bad experiences with Paddle?

the possibility of just blocking your account without warning or reason - if you only have the single payment provider you are fucked. after they did obviously the #1 priority was replacing them and making sure to have multiple providers. did you also notice how they just deleted their github project because it contained so many comments by their angry customers?

This happened to plenty of people with Stripe as well.

Doesn't mean Paddle isn't a good place to start - but as you get bigger, you should probably look at other solutions as well, to de-risk your payments infra. It's just that at the start it's too expensive, even in B2B, to think about multiple payment providers to spread risk.

Re: Ask HN: How do you handle VAT / Sales Tax accounting as B2C SaaS?

#85

Post by alexanderchr »

rnewme wrote: post #78
alexanderchr wrote: post #60

Earlier quoted context omitted.

Be really careful with this unless you know what you’re doing. Setting up a foreign entity that only collects revenue and pays royalties is a known trick and will be looked at very closely by tax inspectors. Worst case they will consider the foreign entity artificial and tax it as if it was a local company. My recommendation would be to keep things simple with a local company, and start worrying about complex structu…

But the local bureaucracy is the problem, not the tax. I would actually pay more tax in my scheme, but not have to deal with complex tax tracking, remitting etc..

Yeah I understand where you're coming from. I'm just saying that the tax authorities might not see it that way, and you can end up in really tricky situations unless you have sveral layers that cover you from responsibility. Hence my recommendation to keep the company structure simple even if it means more bureaucracy.

Re: Ask HN: How do you handle VAT / Sales Tax accounting as B2C SaaS?

#86

Post by rnewme »

alexanderchr wrote: post #85
rnewme wrote: post #78

Earlier quoted context omitted.

But the local bureaucracy is the problem, not the tax. I would actually pay more tax in my scheme, but not have to deal with complex tax tracking, remitting etc..

Yeah I understand where you're coming from. I'm just saying that the tax authorities might not see it that way, and you can end up in really tricky situations unless you have sveral layers that cover you from responsibility. Hence my recommendation to keep the company structure simple even if it means more bureaucracy.

I appreciate your advice, and you're right.

Re: Ask HN: How do you handle VAT / Sales Tax accounting as B2C SaaS?

#87

Post by Nicholas_C »

senordevnyc wrote: post #11

What if you just…did nothing. What would happen?

If you ever want to sell your company the purchase price will be discounted by the amount of sales tax liabilities you have (source: have seen this happen). It's easier to get ahead of it and start collecting and filing sales taxes now so there isn't a growing sales tax liability.

That said, depending on how big OP's company is it might be below sales tax thresholds in most/all jurisdictions.

Re: Ask HN: How do you handle VAT / Sales Tax accounting as B2C SaaS?

#88

Post by Nicholas_C »

>It's my understanding that solutions like Stripe Tax, Alavara, Quaderno, etc. only help collect the necessary data (which I consider the easier part, at least for digital goods), but do not handle the registration & filing (though I've learned that Quaderno will support filing Sales Tax in the US on your behalf soon).

That's right. Stripe recently acquired TaxJar which you can use to connect to Stripe Tax and file U.S. sales taxes. In my limited experience implementing sales tax I found that Avalara did not work well with Stripe right out of the box.

Re: Ask HN: How do you handle VAT / Sales Tax accounting as B2C SaaS?

#89

Post by Chyzwar »

jwr wrote: post #17

EU 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,…

What company do you use for Polish invoicing?
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