Btw, I was at the Stripe offices 2 years ago and it was an amazing experience. I really like what Stripe has done over the years. Keep it going and thanks!
Btw, I was at the Stripe offices 2 years ago and it was an amazing experience. I really like what Stripe has done over the years. Keep it going and thanks!
Agreed.
Ahem, Stripe team. May I have your attention?
Could you please, please, please do something about helping your customers with calculating, charging, and tracking VAT to EU countries? It is currently a glaring omission from your services.
I know it's in the main Stripe API, but if I'm going to have to roll my own integration, I'm just going to go use PayPal. PayPal has much cleaner API for non-card payments.
With Stripe I need two different codepaths for bank payments and cards....
On the UI side, mind shooting me an email at eduardo@stripe.com? I can share some stuff we're working on!
Be aware, fellow Europeans: there is a cost to all regulation. If you feel like a constant afterthought, maybe it’s because you are.
(I know these are not necessarily specifically related to this Stripe product. It’s more of a cultural undertone. What I’m trying to say is: the parent comment has a point.)
Remember the EU Single Market and Custom Union does not cover every aspect of commerce and industry across all 28 member states.
Having said that, the Payment Services Directive 2 (PSD2) which applies to Stripe, will remove any remaining barriers and costs that still exist between member states when applied to the provision of electronic payments. If one was to add in the eIDAS directive then meeting compliance for identity, fraud, etc will soon be irrelevant.
There must be a happy medium between the two positions, I don't know that a country has gotten it right yet but the US is no paradise.
I really think it comes down to legislation philosophy. In the english speaking countries, cost of compliance is something that is thought about for small businesses, so many regulations are small business exempt until you get to certain employee counts or revenue numbers.
In the EU, that concept doesn't seem to exist and businesses of 1 are assumed to be $100M revenue businesses that can afford to do things like GDPR properly.
Edit: had to verify. It seems a bit more reasonable: """Article 83 of the General Data Protection Regulation provides details of the administrative fines. There are two tiers of fines. The first is up to €10 million or 2% of annual global turnover of the previous year, whichever is higher. The second is up to €20 million or 4% of annual turnover of the previous year, whichever is higher.""" - https://www.gdpr.associates/what-is-gdpr/understanding-gdpr-...
Also the GP post, there is more than 'avoiding collecting data'. If you have text field comments form and a 3rd party puts 'personal data' in that, then that is GDPR liable! You also need audit logs and and list of other requirements that needs multi engineer teams to implement properly.
As a result, most small businesses with email are probably not going to be properly compliant on some level and you can prosecute anyone. Just like the new-ish VAT laws, large stores are going to be compliant because they can afford it, while some petty bureaucrat will prosecute the small online shops instead.
(counter-intuitively)
=max(whatTheJudgeThinks, max(10mEUR, 0.02*turnover))
And claiming that regulation in EU is stifling business is a bit naive. Regulation is everywhere. Have you ever tried to sell an app that uses encryption (like TLS or SSH) on the app store? The stuff you need to do in the US for „export compliance“ is ridiculous (even if it‘s an app that wasn‘t written in the US in the first place)
I'd also like people to name specific regulations they disagree with, yet any time I challenge s/o they slink away.
In this case, a stripe rep in this thread posted a list of their todos for the EU. Note that literally "putting VAT ID numbers on invoices" makes their top 5! Can't be that bad after all:
"localize the invoices, add EU specific payment methods to invoices, improve tax support, make default invoice templates EU compliant with VAT ID"
US requirements around what we put on invoices: 0 EU requirements around what we put on invoices: Still figuring it out
The technical implementation is not difficult. It's dealing with all the lawyers and accountants who have to understand regulations of 27 different countries.
There is a significant difference between "not regulated" and "regulated at all". The burden of understanding the regulation itself is a cost, even if the actual compliance turns out to be simple.
There are two big differences.
Let's say I'm selling some digital good online. Consider three purchasers, one in the US in the state of Washington, one in Germany, and one in France.
First, how much tax do I have to collect from each?
For the German customer, that is easy. It is 19% VAT. I don't have to care where in Germany they live.
For the French customer, that is easy. It is 20$ VAT. I don't have to care where in France they live.
For the US customer in Washington...it is not easy. There is a state wide 6.5% sales tax, but there are also county, city, and other sales taxes that I have to collect. For example, if the customer is in the city of Seattle, I'm supposed to collect the 6.5% state tax, plus a 2.7% city tax, plus a 0.4% for something called the "Regional Transit Authority"...that's 9.6%. If that person is over in Bellevue instead of in Seattle, it would have been 10% (6.5% state, 3.5% Bellevue).
For the US customer, I have to care where in their state they live. Also, tax boundaries are not guaranteed to line up with postal code boundaries, so to do that tax accurately I really would need to collect their full postal address (which since I'm selling a digital good I have no use for except for calculating taxes).
Second, what do I do with the tax I collect?
For the EU, I sign up for the VAT MOSS system in a single EU country. Then each quarter I have to file a simple form with the tax authorities in that single EU country that simply lists each EU country, what my total taxable sales were in that country, the VAT rate I used, and the amount of VAT collected. I turn the collected VAT over to that single country's tax authorities. Then they deal with distributing it to all the other countries.
For the US...I have to deal with each state I collect tax for separately. Each has its own forms. Each has its own place to file them. Each has its own place to pay.
If you have to deal with more than just your own state and maybe a handful of others in the US, you pretty much have to use a third party service that specialized in handling all of this. For companies in lines of business that are only barely profitable, this could be prohibitively expensive.
If Congress ever decides to require online companies to collect tax for all states, instead of just those that they have a presence in, and they do not require that the states use something like the VAT MOSS system, and they do not require that each state has a single rate for out-of-state non-present sellers, it's going to be nightmare for small companies, and possibly drive many out of business.
Fortunately, there’s almost no enforcement at all with respect to small- to medium-sized businesses collecting and reporting interstate sales tax. Do the best you can with it.
Is there anything like it in Germany?
It's not as hip and fashionable as Stripe, but does work fairly well. They do subscriptions, but I had to take care of invoicing myself.