What sales tax or VAT to collect?
Hello guys,
I am on the verge of launching a platform that sells both digital products and services. However, I am having difficulty with collecting VAT or sales tax in different countries using Stripe. Currently, my payment process takes customers directly to the Stripe checkout page.
I have no experience with taxes and I'm not sure what I should be collecting from my customers. If anyone can help me understand what tax I should collect, and how to do so (especially if a customer has a VAT number), I would greatly appreciate it.
I am unsure if I need to worry about collecting VAT at this point, or if there is a certain threshold of revenue that I need to reach before VAT becomes an issue.
I want to launch it with as little hassle as possible as of now, so any guidance on this topic would be greatly appreciated.
Thank you!
There is no definite answer, because it depends on both your own area of business as well as on the locality of every single customer that you have (plus if it's a business or private customer).
Stripe has it's tax product (https://stripe.com/tax) to help you collecting the right amount, or you can use a service like Paddle (https://www.paddle.com/), wich will act as the "Merchant of Record" and deal with taxes themselves. The latter is probably still much simpler in the beginning.
thanks for response
my business is registered in UK , should i really think about at starting because being a solo creator still so much things to do, if it can be handled later or can added later on the platform because according to govt. site i don't need to register for vat if revenue under 85k
Personally, I'd just do it wrong rather than not doing it. In case you make a lot of profit, you might run into a lot of headache with your accountant at a later point of time, potentially going through each and every transaction or accepting potentially higher cuts by applying a max VAT rate to all your transactions.
That sounds cumbersome and not like a good advice even, but imho it's better to make sure you get profitable first than concerning yourself with this stuff in the beginning, just to find out nobody would buy anyway.
Thanks @mxmzb i will figure this out later thn you are right i shouldn't involved right now unnecessary headache without being profitable or getting my first customer
Or even convince seller to list their items on my platform
Will look forward to other things first
Thanks for advice buddy 😊