Charging real money is one of the problems with hobby businesses. Segmenting the market to exclude people who can’t pay real money is another. Because neither is just plain fun (because both are business decisions).
A hard lesson: building an unsuccessful business is hard work. About as much as building a successful one but with the added stress of failing.
It's an extra 5% or so, but well worth it to avoid all the work and hassle of learning about and then paying sales tax in every country and region.
If you ever move beyond the "beer money" phase, you should be able to afford the experience required to do all this correctly using Stripe.
If you’re doing international sales and not trusting a MoR service you’re 100% committing tax fraud in multiple jurisdictions.
As I see it now, I have to intentionally (and sometimes through a lot of hurdles) restrict people from buying it from some countries. And then what if they use a VPN? Or I use an MoR who keeps up with all of these tax laws just because our governance is based on geographical when the internet blurs away geographical borders.
MoR just seems like a workaround for not having global governance of a global space, but maybe that's the best way for now.
Now they have two problems.
All the time you have spent in this thread, could have been spent figuring out how to make enough money to make the problem go away. Money solves all business problems.
My advice: Segment the market to avoid problems you can't afford. Because avoiding problems is the easiest way to solve problems. If you can't afford to solve the VAT problem, avoid it.
I think, though that in this case @seabass may have suffered from information overload by subscribing to too many Stripe services. IMHO he got this notification about UAE tax and somewhat panicked. Frankly, the best thing to do was to be grateful for this customer and to move on instead of shooting himself in the foot by rushing to manually register for tax in a country he knows nothing about over a $5 sale. He didn't really have a problem, IMHO.
For most businesses that’s most people.
The mistake is only charging $5. If it were $5000, the overhead of accountants fees, would be covered. At $50k, the fine would turnout fine.
It’s a thing successful companies do. Think of all the Japanese electronics sold only in Japan.