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>A truly underrated value you get is the fact that payment processors deals with all those issues around taxes, VAT, etc. I signed up for Stripe thinking it wa

>A truly underrated value you get is the fact that payment processors deals with all those issues around taxes, VAT, etc. I signed up for Stripe thinking it was the case but it turns out they don't handle VAT and taxes and I have to find something else (looking into Paddle and I would be grateful for suggestions and ideas). How are people here dealing with VAT and taxes for their SaaS in 2021. Company is in France, Europe. Clients could be anywhere. I wanted a one stop shop and thought Stripe did that.

mjmasn 5y ago
I think Stripe does now have a tax product. Not sure what the features/limitations are but it seems to be saying it handles VAT for you. Can't offer anything deeper than that as I haven't used it but thought I'd mention in case it was helpful! https://stripe.com/tax https://stripe.com/tax
- Jugurtha 5y ago
  Thank you. I had recently looked at that quickly but I'll be more thorough soon.
Silhouette 5y ago
If you want a service that does all of the VAT admin on sales, including reporting and remittance to government authorities in all relevant jurisdictions, you might want a "merchant of record" service. You mentioned Paddle, who seem to be popular and getting positive reviews among my network, though they aren't the only MoR available now. Given how much pain governments are increasingly inflicting in this area, and the EU more than most, I expect that the market for these services will grow and using a merchant of record will become the dominant mechanism for accepting online payments, at least for smaller online businesses with significant international or inter-state sales. (I'm not sure this will be a good thing for various other reasons but it's what I expect to happen if current trends continue.) The tax products offered by Stripe and a few specialist providers seem to offer little more than tracking some VAT rates and doing some simple calculations. I don't understand who the target market is supposed to be for these services today. Anyone with the resources to handle reporting and remittance properly everywhere surely doesn't need to pay the extra fees just for a bit of tracking and arithmetic. Anyone who doesn't have those resources might prefer to outsource everything (including responsibility for compliance) to specialists who offer a comprehensive service.
- Jugurtha 5y ago
  >If you want a service that does all of the VAT admin on sales, including reporting and remittance to government authorities in all relevant jurisdictions, you might want a "merchant of record" service. You mentioned Paddle, who seem to be popular and getting positive reviews among my network, though they aren't the only MoR available now. That was my understanding after becoming aware of this, and Paddle seems to be popping up a lot. >using a merchant of record will become the dominant mechanism for accepting online payments, at least for smaller online businesses with significant international or inter-state sales. That's our case. It wasn't much of a problem for our consulting activities (mainly mid six-figure contracts with a few clients, mainly in Europe, often repeat business). However, we launched a product and it's surprisingly more straightforward to charge someone 250k than to charge many a few hundred bucks here and there. At least for now. VAT on a large invoice, bank-to-bank and accounting firm, it's just part of business. VAT on SaaS for a few hundred euros via a credit card? Something else, but I digress. We've been learning. >The tax products offered by Stripe and a few specialist providers seem to offer little more than tracking some VAT rates and doing some simple calculations. I don't understand who the target market is supposed to be for these services today. Again, you hit the nail on the head as to our situation. I had looked at Stripe "Tax" before, but I couldn't understand it really: it appeared like a landing page with a calculator behind, but that is unfair because I haven't looked at it closely and haven't tried it yet. The impression was that it was less fully-fledged than Paddle, but I'm more than willing to be wrong because it would mean that I'll only use Stripe for everything (for now, then I'll handle the problem of the eventuality of them shutting down our account or something like that and figure out contingencies / payment hot-swapping). >Anyone who doesn't have those resources might prefer to outsource everything (including responsibility for compliance) to specialists who offer a comprehensive service. That's my case. If you have a few contracts per year for large amounts, I can do that easily: we use an accounting firm, simple invoices, bank transfers, everything is neat. But for a large number of small amounts, I want to buy the option of not doing accounting. That desire is so deep, that it even influenced our product. It's a machine learning platform that lets people train, track, package, deploy, and monitor machine learning on their Kubernetes clusters.[0] Why their Kubernetes clusters? Because it's a good way to charge a flat rate instead of counting beans: if we provide compute, we'll have to meter it, or charge a flat rate and play the large numbers game (many using it less subsidize those who over use it). We wanted to have nothing to do with that metered billing, especially on infrastructure costs, and we just let users do things on their own clusters and data. - [0]: https://iko.ai https://iko.ai

mjmasn 5y ago

I think Stripe does now have a tax product. Not sure what the features/limitations are but it seems to be saying it handles VAT for you. Can't offer anything deeper than that as I haven't used it but thought I'd mention in case it was helpful! https://stripe.com/tax https://stripe.com/tax

Jugurtha 5y ago
Thank you. I had recently looked at that quickly but I'll be more thorough soon.

Silhouette 5y ago

If you want a service that does all of the VAT admin on sales, including reporting and remittance to government authorities in all relevant jurisdictions, you might want a "merchant of record" service. You mentioned Paddle, who seem to be popular and getting positive reviews among my network, though they aren't the only MoR available now. Given how much pain governments are increasingly inflicting in this area, and the EU more than most, I expect that the market for these services will grow and using a merchant of record will become the dominant mechanism for accepting online payments, at least for smaller online businesses with significant international or inter-state sales. (I'm not sure this will be a good thing for various other reasons but it's what I expect to happen if current trends continue.) The tax products offered by Stripe and a few specialist providers seem to offer little more than tracking some VAT rates and doing some simple calculations. I don't understand who the target market is supposed to be for these services today. Anyone with the resources to handle reporting and remittance properly everywhere surely doesn't need to pay the extra fees just for a bit of tracking and arithmetic. Anyone who doesn't have those resources might prefer to outsource everything (including responsibility for compliance) to specialists who offer a comprehensive service.

Jugurtha 5y ago
>If you want a service that does all of the VAT admin on sales, including reporting and remittance to government authorities in all relevant jurisdictions, you might want a "merchant of record" service. You mentioned Paddle, who seem to be popular and getting positive reviews among my network, though they aren't the only MoR available now. That was my understanding after becoming aware of this, and Paddle seems to be popping up a lot. >using a merchant of record will become the dominant mechanism for accepting online payments, at least for smaller online businesses with significant international or inter-state sales. That's our case. It wasn't much of a problem for our consulting activities (mainly mid six-figure contracts with a few clients, mainly in Europe, often repeat business). However, we launched a product and it's surprisingly more straightforward to charge someone 250k than to charge many a few hundred bucks here and there. At least for now. VAT on a large invoice, bank-to-bank and accounting firm, it's just part of business. VAT on SaaS for a few hundred euros via a credit card? Something else, but I digress. We've been learning. >The tax products offered by Stripe and a few specialist providers seem to offer little more than tracking some VAT rates and doing some simple calculations. I don't understand who the target market is supposed to be for these services today. Again, you hit the nail on the head as to our situation. I had looked at Stripe "Tax" before, but I couldn't understand it really: it appeared like a landing page with a calculator behind, but that is unfair because I haven't looked at it closely and haven't tried it yet. The impression was that it was less fully-fledged than Paddle, but I'm more than willing to be wrong because it would mean that I'll only use Stripe for everything (for now, then I'll handle the problem of the eventuality of them shutting down our account or something like that and figure out contingencies / payment hot-swapping). >Anyone who doesn't have those resources might prefer to outsource everything (including responsibility for compliance) to specialists who offer a comprehensive service. That's my case. If you have a few contracts per year for large amounts, I can do that easily: we use an accounting firm, simple invoices, bank transfers, everything is neat. But for a large number of small amounts, I want to buy the option of not doing accounting. That desire is so deep, that it even influenced our product. It's a machine learning platform that lets people train, track, package, deploy, and monitor machine learning on their Kubernetes clusters.[0] Why their Kubernetes clusters? Because it's a good way to charge a flat rate instead of counting beans: if we provide compute, we'll have to meter it, or charge a flat rate and play the large numbers game (many using it less subsidize those who over use it). We wanted to have nothing to do with that metered billing, especially on infrastructure costs, and we just let users do things on their own clusters and data. - [0]: https://iko.ai https://iko.ai