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Stripe Tax

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Re: Stripe Tax

#91

Post by ArkanExplorer »

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…

You don't need to charge VAT unless you hit these thresholds:

https://www.avalara.com/vatlive/en/eu-vat-rules/distance-sel...

Which at the lowest end is € 35,000 per country.

Countries like the UK for example have a VAT threshold of £85,000 for businesses located inside that country.

This is one of the problems of online marketplaces - they have VAT added to them, even when the individual (small) business doesn't need to pay it.

VAT is a big compliance burden for small businesses which is why every country has revenue thresholds under which you don't need to charge it.

Re: Stripe Tax

#92

Post by kmoriarty »

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…

I just wanted to mention, our invite-only starts today, but we're working on making Stripe Tax available to all very very soon!

Either way, we will be reviewing and onboarding users as quickly as possible after you submit your interest!

Re: Stripe Tax

#93

Post by mchusma »

kmoriarty wrote: post #37
admissionsguy wrote: post #3

Very happy to see this, it is such a necessary feature. I was recently looking for an option to enable VAT calculation in Stripe and couldn't believe it wasn't there. Now it is, and it looks very well done as Stripe's features usually are. But 0.5% fee per transaction is.. steep.

Thanks for the feedback! Completely understand your reaction to pricing. For a bit of context, we’ve spent the past year listening to users and trying to understand the best way to price. In finalizing our launch pricing, we made sure there are no fixed upfront costs or contracts, nor are there any per transaction fixed fees either. We tried to find a price point that ultimately was not prohibitive for small business…

My honest feedback on pricing was "expensive but we would only want to apply it on non-US users." Also, we wouldn't want to have to pay for invoicing, which is honestly much much worse of a value prop. For someone with a 20% margin business, the combination of these and payments products is about 4%, or 20% of all profit.

While this is the first product since payments I have liked (so good work there) it would be nice to see Stripe work on reducing the transaction costs, particularly on the payments side. Right now for me I consider Stripe a part of the "credit card processing tax cabal". Payment processing fees are a huge tax on the world, and if stripe could help solve that and genuinely reduce it to the level it should be (nearly free marginally), I would have the utmost respect for them. I honestly think this should be the main company focus if they actually want to help customers.

Re: Stripe Tax

#94

Post by manigandham »

kmoriarty wrote: post #37
admissionsguy wrote: post #3

Very happy to see this, it is such a necessary feature. I was recently looking for an option to enable VAT calculation in Stripe and couldn't believe it wasn't there. Now it is, and it looks very well done as Stripe's features usually are. But 0.5% fee per transaction is.. steep.

Thanks for the feedback! Completely understand your reaction to pricing. For a bit of context, we’ve spent the past year listening to users and trying to understand the best way to price. In finalizing our launch pricing, we made sure there are no fixed upfront costs or contracts, nor are there any per transaction fixed fees either. We tried to find a price point that ultimately was not prohibitive for small business…

> "nor are there any per transaction fixed fees either"

Why not? Wouldn't fixed fees be preferable to a relative basis for something like this?

Re: Stripe Tax

#95

Post by mgkimsal »

Naga wrote: post #81
maccard wrote: post #68

Earlier quoted context omitted.

> If you invoice $100k in a year, you're paying $4000 to Stripe to manage your sales tax. The pricing on the page says 0.4% - that's $400/year not $4,000 > Now, if you're making $1 million a year, that's $40k It's $4,000 by the above. > compared to a few thousand you'll pay your accounting firm to do it. It's not _just_ the money you pay the accountant to do it once, you need to get all of the data about where the cu…

Yeah, you're right, my coffee hasn't kicked in yet. For the amount I thought you would pay for Stripe to do that, you could have hired an accountant to figure all of that out for you on an ongoing basis, but for the actual price that's a pretty good deal to not have to think about it. My opinion on accounting services has always been that it's nothing that a business owner can't do themselves since it's not really th…

> you could have hired an accountant to figure all of that out for you on an ongoing basis, but for the actual price that's a pretty good deal to not have to think about it.

Even if you have accountants on tap, they may disagree. I did some work on a project where we were needing to deal with tax calculations (was using taxjar). At least one of the questions was about when we should be charging tax on certain 'extras', like... shipping. Their accounting firm said "no, you don't charge tax on shipping". Taxjar was automatically making that charge, and throwing off the expected numbers. After some digging, I found, at least in their primary state, they should have been collecting tax on shipping, but I don't think it was uniform across all the other states.

So... they had an accounting/books person on staff, and this question went up to their 'tax person'. I think it was either a general attorney or a tax specialist or something - this was their 'oracle/decision maker', and they were just flat out wrong.

This probably wasn't the case 20 years ago, when they were putting all their records in to an electronic system the first time, but... rules change. Keeping up with them is not a trivial thing, and when millions of dollars are on the line... you can make expensive mistakes.

Re: Stripe Tax

#97

Post by yannoninator »

Fraaaank wrote: post #69
yannoninator wrote: post #12

This is absolutely HUGE . If you're an indie hacker, or solo founder taxes are extremely important and you cannot ignore them if you go over a certain amount. In the past taxes, VAT and all of that is a pain in the backside for most EU / UK businesses and most go with Paddle because of this. I am so elated that this is now available (although through an invite), and saves a TON of time, unnecessary annoying scripts a…

Isn't the EU B2C tax burden solved by the introduction of the one stop shop per July 1st of this year? https://ec.europa.eu/taxation_customs/business/vat/oss_en

You still have to calculate all taxes from Stripe from these EU regions and then do that. For those using Stripe before this announcement it was a huge time sink.

Re: Stripe Tax

#98

Post by scubakid »

yannoninator wrote: post #19
toomuchtodo wrote: post #17

Earlier quoted context omitted.

Do you feel like the value is worth with the fee Stripe is charging?

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.

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..

Re: Stripe Tax

#99

Post by [deleted] »

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…

[deleted]

Re: Stripe Tax

#100

Post by throwokay »

yannoninator wrote: post #19
toomuchtodo wrote: post #17

Earlier quoted context omitted.

Do you feel like the value is worth with the fee Stripe is charging?

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.

I thought Avalara was the leader in this space. What is their pricing, I can't find it on the site.
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