Dealing with VAT outside of the European Union?
Hey Indie Hackers!
I am currently looking at the best solution for dealing with VAT/sales taxes outside of the European Union for a subscription based product/service.
I have a few questions about that:
What do you use to report taxes internationally?
Did you automate this using a tool?
Is it worth it to use Gumroad or Paddle instead of dealing with taxes yourself?
How do you report your Gumroad and Paddle revenue to your tax office inside the European Union? Do you need to pay extra VAT?
A little update
I've contacted Paddle and they told me they report and pay all the VAT. Seems like the way to go.
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Hey Stann, totally feel your pain international tax is a beast.
We built VATFix Plus for the EU side of things, it’s a fallback VAT validation API that handles VIES downtime or lets you skip dashboards altogether. It doesn’t report or remit like Paddle does, but if you’re using Stripe Billing (or rolling your own invoicing), you can plug VATFix Plus in to validate VAT numbers automatically and build compliance logic yourself.
If you're outside the EU but still selling into the EU (especially B2B), it can help with validating buyer VAT numbers to zero-rate correctly.
Not a full replacement for Quaderno or Paddle — but if you need just the validation piece for split logic or custom invoices, it might keep your stack lean.
Would love to hear if that fits your setup. No dashboards, just backend power.
We use Paddle for DB Fiddle (https://www.db-fiddle.com/), it's pretty good and certainly simplifies the whole tax handling problem provided that your billing integration is simple enough.
From my understanding, Paddle essentially act as a reseller and so it is their responsibility to report and remit any taxes to their relevant countries/tax authorities. From your point of view, you are essentially only doing business with a single Irish customer, which is Paddle.
For LexasCMS (https://www.lexascms.com), our billing integration was much more complex and so we opted to use Stripe Billing instead of Paddle. This does put a bigger burden on us for handling international tax, but we've integrated with Quaderno (https://quaderno.io/) to keep track of things like tax rates, thresholds, remittence etc.
International tax handling is a very large topic, but hopefully this small amount of information helps somewhat :)
Disclaimer: I'm not an accountant so you'll probably want to check all of this with a professional ;)