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Stripe Tax

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Re: Stripe Tax

#341

Post by iudqnolq »

briandear wrote: post #256
gamblor956 wrote: post #248

Earlier quoted context omitted.

The law already was that the purchaser should remit use tax to the state for purchasers from out-of-state vendors. But compliance was basically non-existent; most people didn't even know that they owed use tax on such sales, much less what rate would apply. Sales tax is basically use tax, but with the burden of compliance placed on the seller. As for why the sellers' state is not entitled to sales tax: in the old-tim…

> But compliance was basically non-existent; most people didn't even know that they owed use tax on such sales As a business owner, I would ask myself “how is this my problem?” If a stare has a problem with residents not complying with a tax, I am not sure why a business in another state should care. If I buy a product from China, are they required to collect sales taxes for Montana? Of course not. So not sure why a…

> If I buy a product from China, are they required to collect sales taxes for Montana? Of course not. So not sure why a business located in a sovereign US state has any obligation to follow laws of some other state in which they don’t operate.

Actually the same rules apply to both. See https://blog.taxjar.com/international-sellers-deal-sales-tax...

Re: Stripe Tax

#342

Post by lemming »

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.

I've been using Paddle (and thus not worrying about VAT) for years now. They're mostly pretty good, although I use a very limited subset of their functionality, I basically just use them as a payment gateway. Their support is responsive and helpful, especially in the last year or so, and I haven't had any downtime to speak of. They don't accept all the payment methods that Stripe does, but enough for me.

There are a couple of pain points. Their invoicing is just a hot mess, if invoicing is a requirement for you I'd evaluate that very carefully. And they don't really have any sort of proper test system, which is pretty unbelievable. I do most of my testing in production using discount coupons, but 100% discount coupons can only be used with orders for a single item, so I can't test orders for 10 licences in any very useful way.

I dealt with their contract conditions by just ignoring them and crossing my fingers :-)

Still, all that said, there's nothing in this offering from Stripe that would tempt me to change. I'm also lucky in that I managed to negotiate a good rate from them when their model was switching to B2B (from Mac app sales, which the App Store killed). If you have any further questions, feel free to email me.

Edit: one other thing I like is that they use Currency Cloud to transfer funds to me, which give a much better exchange rate than a simple bank transfer and means that my local banks don't stiff me to receive a foreign transaction.

Re: Stripe Tax

#343

Post by lemming »

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.

Paddle uses Currency Cloud for that, which charges a true mid-market rate and a very low transaction fee. It's what Transferwise uses behind the scenes.

Re: Stripe Tax

#344

Post by ttoinou »

drexlspivey wrote: post #77
ttoinou wrote: post #24

Earlier quoted context omitted.

Seems very fair pricing compared to competitors

Why does it have to be a percentage of your revenue? It’s doing exactly the same thing for a $100 invoice and a $10000 invoice, why does the latter cost 100x more?

Why not ? If you have small transactions you end up not paying a lot, and the more you make money the more you pay Stripe. If you make so much money that you can have your own tax system, good for you ! Implement it and don't pay Stripe :)

Fixed price schemes would be less fair for small businesses that want to grow. Stripe helps you to grow, so that your company becomes the one big enough to "subsidize" the small ones after benefiting this pricing in the first stage

Re: Stripe Tax

#345

Post by lemming »

pier25 wrote: post #279
yannoninator wrote: post #19

Earlier quoted context omitted.

YES, considering the only best competitor in this space Paddle takes 5%. Taxes is the reason why in the past most EU/UK businesses go to Paddle. Stripe's Tax feature now saves people who were considering Paddle a lot of time now.

What about invoicing to the customer? AFAIK Paddle solves that too but Stripe doesn't.

Paddle does have a solution to this but it is what I would consider to be in eternal alpha - it's functional (barely) but it drives me insane every time I have to use it.

Re: Stripe Tax

#346

Post by R0b0t1 »

gamblor956 wrote: post #328
R0b0t1 wrote: post #294

Earlier quoted context omitted.

This is my point. It happens with brick and mortar stores, too. The MO/KS border has a large population buildup. It's totally normal to shop in the state that has the best tax rate for your goods. If you apply the ecommerce logic to this, you need to have people show ID at stores so the store can apply the right tax rate. It seems to me the seller's state has just as much claim to sales tax as the buyer's. The seller…

No, you guys are both misunderstanding how the sales sourcing works: it's the address where the sale is deemed to have taken place. For brick-and-mortar sales, that is the physical location of the store: you will be taxed the appropriate rate for the address of the store. Note that this includes includes online orders picked up from a store location, and in-person orders even if the goods are not actually physically…

I understand the current rulings. I am saying they are erroneous. We (who I replied to and myself) understand what is going on. It is not consistent.

Re: Stripe Tax

#347

Post by ad8e »

nickpp wrote: post #148

Honest 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…

If I want to know how much Stripe will cost, I can visit Stripe's webpage and see all the fees laid out. It doesn't tell me "Talk to sales", which is common in the payment/tax calculation business.

Re: Stripe Tax

#348

Post by Silhouette »

lemming wrote: post #342
Silhouette wrote: post #204

Earlier quoted context omitted.

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.

I've been using Paddle (and thus not worrying about VAT) for years now. They're mostly pretty good, although I use a very limited subset of their functionality, I basically just use them as a payment gateway. Their support is responsive and helpful, especially in the last year or so, and I haven't had any downtime to speak of. They don't accept all the payment methods that Stripe does, but enough for me. There are a…

Thanks, there's lots of useful info there.

Re: Stripe Tax

#349

Post by plantain »

realityking wrote: post #320
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…

I believe the currency conversion charge can be avoided by only charging your customers in your own currency or another currency you have a bank account for. I rarely see a small merchant that takes more than one or at best two currencies. That'd leave you with 20p + 3.9% (international) / 2.4% (European). Compared to Paddle's 5% + $0.50 that could be a good deal depending on how much of your volume happens in Europe…

Except for the vast majority of countries supported by Stripe, you can only be paid in your local currency.

Australian companies can only get paid in AUD. I've been getting killed on this for years, Stripe keeps saying "soon" :(

Re: Stripe Tax

#350

Post by plantain »

gingerlime wrote: post #302
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…

Stripe also offers interchange plus pricing, but you’ll have to badger them for it… if you’re selling in Europe it can work out much cheaper, but it depends (eg amex would cost you much more). Also the exchange rates can be avoided by setting up bank accounts with different currencies (eg transferwise —- now wise). This alone saved us a bundle.

Only true for EU-domiciled companies - https://stripe.com/docs/payouts#supported-accounts-and-settl...
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