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97 points throw_1VJ51pMb | 4 comments | | HN request time: 0s | source

Hey! I run a B2C SaaS and I use Stripe for all of my sales (subscriptions).

I am looking to learn how others handle their VAT / Sales Tax filing.

I know that the standard answer would be to use Paddle / LemonSqueezy / Polar.sh, but I already have a lot of subscribers on Stripe which makes quick migration non-trivial.

I am especially looking for some reliable accounting companies / accountants that can register and file Sales Tax across US, UK, Canada, Australia, etc. (It does not have to be a global solution).

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).

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Some jurisdictions are relatively easy to handle (for example, one can handle whole EU by uploading a simple CSV [1] once a quarter and the CSV is easy to generate from Stripe's records).

But unfortunately there are tons of others that are much more complicated and scattered -- for example, due to the economic nexus laws in the US, I now have to file Sales Tax in each individual state where I am over the threshold (and many states have thresholds in low hundreds of transactions, so it's not hard to reach).

[1]: https://www.elster.de/bportal/helpGlobal?themaGlobal=osseust_import

[2]: If you do not feel comfortable commenting here, you can also reach out at z2qmk@pekoi.com (temporary email)

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andrewrea ◴[] No.43339664[source]
Lot of folks suggesting / commenting on solutions. Wanted to add some nuance on 1. MORs (Merchant of Records) vs global sales tax providers (StripeTax/TaxJar, Avalara, Anrok) and 2. the risk / reward of actually handling these taxes at different stages of your business.

1. Merchants of record can make sense for smaller B2C companies with lots of international revenue that don't want to handle taxes or chargebacks/fraud. But the fees are extremely high and often your company would only be remitting in a few jurisdictions if you were handling this independently. Respectfully, a lot of the MORs are selling fear more than something you actually need for a lot of sellers. If you're already on Stripe, I'd stay there vs going to a Paddle. Prob not worth the fees. StripeTax is good but very expensive and you'll need something else for filing, registration remittance. A bunch of new startups have hit the space in the last couple years (several of which have been mentioned here) that can help with US and/or international calcs, filings, remittance.

Just do your diligence and don't get sold something that's overkill for what your business needs.

2. On that point, not legal advice but from a risk management POV, below a certain amount of revenue ($500k-1M in ARR), it's probably fine to temporarily punt on these taxes or to just collect & remit in your home state / country. You probably won't have nexus in most jurisdictions early on anyway. Additionally, many VAT countries don't tax B2B software so if you primarily sell remotely to other businesses (sounds like you are mostly b2c so not relevant to you) you might not need to worry about VAT in most countries, just US sales tax. Additionally, if you're based in the US, you're probably at higher risk of enforcement here than you are abroad. Washington or New York is more likely to catch up with you than a country in the EU (or vice versa if you're based internationaly). tl;dr - get PMF. And then handle your home country / states first. Don't freak out about this at a lower volume of revenue.

Full disclosure I'm the co-founder of Taxwire.com and we're a startup in this space. We do registrations, filings, remittance, and calculations in Stripe, QBO, and other billing/payment platforms for the US and recently launched VAT as well. So obviously I have some bias on solutions but hopefully the above is helpful.

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rnewme ◴[] No.43339784[source]
Ta wire looks interesting. Let me pick your brain here for a moment, my wife is looking to start SaaS soon, she is based in EU but intends to open both EU and Wyoming llc. Wyoming llc would sell B2C, EU llc would then invoice Wyoming llc monthly so she and her future employees can get paid. Since the eu country doesn't have tax agreement with USA the anon llc would be practically invisible to EU, and additionally as foreign owned llc with no employees I believe there is no tax in USA either? What do you think about this approach? Does your advice still hold; start with stripe, do the minimum to have llc working?
replies(1): >>43343762 #
1. alexanderchr ◴[] No.43343762[source]
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 structures once you have enough revenue for it to make sense.

replies(1): >>43349513 #
2. rnewme ◴[] No.43349513[source]
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..
replies(1): >>43353564 #
3. alexanderchr ◴[] No.43353564[source]
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.
replies(1): >>43359009 #
4. rnewme ◴[] No.43359009{3}[source]
I appreciate your advice, and you're right.