Stripe and TAX

Stripe is not a tax managing system.

You would need to calculate the tax yourself which is not hard. For Node.js, for example, there is an npm package called node-sales-tax where you can set your origin country and then calculate the VAT rate for your customer. In the checkout, you need to have a country selector of course. A basic writeup can be found here: https://blog.checklyhq.com/managing-eu-vat-with-stripe-for-saas-is-not-that-hard/

I have also used this in my side project :)

Let's asume, that you sell an article for 100€ without taxes.
That's quite a complex field. Inside of the EU it depends on the staatus of your customer.

• If your customer is a company, he has a valid VAD number, then you don't need to add the tax. Just charge 100€.

• If your customer is not a company, don't has a valid VAT number, then you must add the curresponding VAT of his country. For example if the user is from Germany, then you must add 19 % and charge 119€. And to make things more complicated, you must tell every countries tax office, how much taxes you did receive. But you can tell it also to the danish tax office. Have a look here: https://europa.eu/youreurope/business/taxation/vat/vat-digital-services-moss-scheme/index_da.htm

• If your sales, without taxes, are bellow 10.000€ per year, so you sell not more then 100 products. Then you can choose to add the danish tax quote with 25% and charge 125€.

• If the customer is outside the EU you charge 100€ and thats it.

BUT I'm not an expert for taxes, I have this knowledge only because I will have these problem soon too. So do your self a favour and call your local tax office, they will tell you haw to handle it.

Generally, you should not add VAT between EU to US transactions. (This is very different to transactions between countries inside EU brief overview: https://www.chargebee.com/resources/guides/understanding-eu-vat-guide/ ). However, every country has specific rules, so I strongly suggest to consult with your local accountant.

Is that 25% VAT? Because if the customer is from the US and the transaction is B to B, then I don't think VAT applies.

Stripe Billing has received some significant updates which make it reasonably easy to stay on top of your tax game https://stripe.com/blog/billing-eu. I checked out all of the other solutions (from Paddle to Quaderno), none of which convince me.

I also struggled a lot with this when starting out. You have the option to use one of those tax platforms that work with Stripe: https://stripe.com/en-ca/partners/apps-and-extensions?n=tax-calculation.

However I decided to build my own solution because my situation isn't that complicated. You have 2 different questions: Who has to pay what tax? This is something you should ask an accountant who knows the online space. This will provide you with the most reliable answer.

The second question is how do you handle it? Stripe doesn't support it out of the box (yet) but you can just ask the client for their country and then look up the tax amount on your server for that country and add it to the stripe invoice.

Although I'm not familiar with tax details for EU to US transactions, but perhaps a solution like Taxjar: https://www.taxjar.com/ that provide an API for tax calculation could be helpful.