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?
Stripe Tax
171–180 of 383 posts
Re: Stripe Tax
#172The 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?
Correct. But that's not what you're paying for of course, you're paying for the fact that you don't need to pay an accountant to double check these numbers: if they are wrong and the tax man comes after you, you get to hold Stripe accountable for any and all repercussions. You are paying Stripe--if you so choose--to take on the legal responsibility of getting it right.
Re: Stripe Tax
#173That 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…
Nope, if you have $100k transactions in a year, it will be $100,000 * 0.005 = $500 not $4,000 (And 0.4% is when you make more than $50,000 in a month) I too made the mistake of doing amount*0.05 when they provided me the pricing in beta. This is why I went with them, if I can't do a simple percentage computation I'd rather not do the taxes myself. And if you're making $1M a year, it will then be $4,000. And I guess t…
When I saw this announcement, I had fully expected these new features to be included as standard - I was a bit surprised when I saw they were charging for them.
That said, I think the pricing is well worth it if you're selling B2C. EU VAT is complicated, and I presume state-level sales tax in the US is too.
If you're selling B2B in the EU however, then all you really need to do it collect and validate VAT registration numbers. Now, the EU API for this is pretty crappy, and has a ridiculously low rate limit - but still, it's not difficult to do. Indeed, I did it in a few hours when I was setting up Stripe for a B2B micro-ISV one or two years ago. I actually think that VAT ID validation should be included as standard - not chargeable.
Re: Stripe Tax
#174Honest question: can somebody enlighten me about Stripe's appeal? I am not an user (until recently they weren't even available in my country) but I used ShareIt (now Digital River) 20 years ago and Avangate (now 2checkout soon Verifone) in the past 15 years and they both: - had a much larger international presence, with localizations and everything - had sales taxes, VATs etc computed from day one - had cart (not sur…
Stripe's documentation and API integration was so simple compared to Paypal and others.
I believe that. But on the other hand you had to implement sales tax - that seems to me a few orders of magnitude more complicated. Was it worth the tradeoff maybe?
Re: Stripe Tax
#175Earlier quoted context omitted.
Literally all companies pay other people (accountants, lawyers) to do their taxes and in many cases they are third parties so no, that is not the case. https://www.irs.gov/businesses/small-businesses-self-employe...
Not literally all. I can name several small businesses which do their own taxes.
-—> small <—-
Re: Stripe Tax
#176The 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?
Correct. But that's not what you're paying for of course, you're paying for the fact that you don't need to pay an accountant to double check these numbers: if they are wrong and the tax man comes after you, you get to hold Stripe accountable for any and all repercussions. You are paying Stripe--if you so choose--to take on the legal responsibility of getting it right.
> if they are wrong and the tax man comes after you, you get to hold Stripe accountable for any and all repercussions. You are paying Stripe to take on the legal responsibility of getting it right.
Where exactly is this stated? As far as I can tell, all this does is say what taxes you should be collecting, and then collect them. It doesn't even handle (at this point) remitting payment to the appropriate jurisdications.
I see no evidence that if your taxes are collected wrong, Stripe will do anything other than say "Your accountant should have caught that, sorry." I see no evidence that by using this product, Stripe will indemnify you against tax issues (which yes, would go a long way to justifying the cost)
Re: Stripe Tax
#177The 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?
Correct. But that's not what you're paying for of course, you're paying for the fact that you don't need to pay an accountant to double check these numbers: if they are wrong and the tax man comes after you, you get to hold Stripe accountable for any and all repercussions. You are paying Stripe--if you so choose--to take on the legal responsibility of getting it right.
This is specially valuable if you are selling your product across multiple countries, which may have different taxes.
Re: Stripe Tax
#178Earlier quoted context omitted.
Not sure how it works in the US but in the EU you don't have to register anything. Just keep tabs of what VAT you collected for what country, and then pay accordingly afterwards. No licenses needed.
Last time I looked into this, it seemed to me like in the US you would need a separate license for each state you collect sales tax in (before collecting any tax)... and naturally, each state has a different licensing process, and some charge fees to register. For small independent projects, it seemed like kind of a nightmare.
You don't have to collect tax for states you don't have a presence in. They have no jurisdiction outside their borders.
Re: Stripe Tax
#179Earlier quoted context omitted.
Stripe's documentation and API integration was so simple compared to Paypal and others.
I believe that. But on the other hand you had to implement sales tax - that seems to me a few orders of magnitude more complicated. Was it worth the tradeoff maybe?
Sales tax is not a "I need this at launch" feature. Many companies start out in a single market where you can just hardcode the tax rates if you want, and worry about that later (and then the engineering hours to add sales tax etc. are probably not a threat to your existence).
Re: Stripe Tax
#180Really interesting!
I have a very small video game business (emphasis on small) and I already use Stripe to handle non-EU digital purchases. I specifically avoid taking money from EU customers because I briefly looked into the tax requirements and it seemed onerous. The registration process for really small businesses that did online sales was very weird, and unlike Canada or the US, the threshold question seems to be hard to answer (I think you have to pay taxes from day 1 even if you sell 50 euro per year?)
Anyways, I am glad stripe is adding this product, and I've signed up to join, but I am still wondering how complicated and expensive the whole process of registration for vat OSS was. I doubt I'd get more than 50 euro total per year in sales (yes, I mean 50 euro. not kidding).