(Paddle and Gumroad already do a version of this)
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Asking a small business to collect and remit sales taxes to dozens of different government entities is ridiculous. The result? Tons of non-compliance. It’s just too much work for most companies.
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Small companies don’t have an accounting department. They don’t have a legal department. They don’t have the resources to wade through the regulations and make themselves compliant. 3rd party services that do tax compliance are just a bandaid.
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If I was the EU, I would mandate that
@stripe collect and remit VAT immediately. My guess is 80% of Stripe’s USA customers aren’t collecting and remitting VAT. It will be a huge burden lifted off the shoulders of small businesses.Pokaż ten wątek -
Another thing: I’m not against taxation (or privacy laws), but the EU really needs to look at how hard they’re making it for small businesses. The compliance is going to kill EU based startups, because companies in the USA are going to be able to move faster.
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For a perfect illustration of the confusion around VAT for US-based startups, look no further than this Reddit thread. https://www.reddit.com/r/startups/comments/enmh6n/saas_companies_tax_evaders/ …pic.twitter.com/Fl7NEsIDtN
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To me, it feels like we’re duplicating effort where we don’t have to. It doesn’t make sense to have millions of businesses collecting, remitting, and doing the paperwork, when the EU could deal with a small group of entities (Stripe, Paddle, Gumroad).
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I don’t think I like even more eu refs also the US has this same exact issue. Most legs SaaS now collect US state sales taxes (but small ones don’t for reasons you mention). I’d rather see them just make the process simpler. If you sell online the rate is X
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* large not legs heh
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and there’s one place to remit it. Small biz can collect (maybe stripe helps there) but the issue is remitting. Paying 40 diff eu countries or 50 states all w diff rates is the haters part.
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