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Comment by localfirst | Hacker News Reader

I find the whole aspect of having MoR a fear mongering tactic to get you to pay extra transaction fees

99% of SaaS won't reach the MRR needed to justify MoR

Of the 1% those breaking through 7 digit MRR can simply hire in house to manage tax remittance and not confuse their customers with invoices labelled with MoR's branding

All in all this seems like the fear campaign has worked beautifully for Paddle and Lemonsqueezy but some of us saw right through it and never really felt the need to pay 5%~11% (!!)

Looks like Stripe will shut down MoRs one by one

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As an Australian, I kicked the tyres on a few of these products and quickly realised that I didn’t care.

Didn’t care about my supposed tax liability in Saudi Arabia. I think I owe those guys $7. Come and get it.

Or in Serbia. Or the EU, more broadly. Or in the province of Saskatchewan. All of which I theoretically owe sales tax.

I’m registered for GST in Australia. I live in Australia. I will slavishly follow Australian law and submit my GST on time.

The rest of it? For a one-person business? Utterly unfeasible.

The problem with the ostrich argument is always that it works until it doesn't. Governments have talked about more international cooperation on tax reporting and collection forever. One of these days they're going to start including serious measures for these things as a routine part of trade deals or other big agreements. They have increasingly easy targets as so many online sales now go through a relatively small number of payment systems like Paypal and Stripe that are distributed enough that they could effectively be compelled to cooperate with any new reporting obligations. Then it's going to be a case of small businesses selling internationally commit an average of N offences per day somewhere in the world because it's impractical not to so if you're the unlucky one they decide to make an example out of then that's going to really spoil your day.

As someone who wants to do the right thing but would also like their business to actually do something useful and not spend 95% of its time doing admin work this is the kind of thing that stops me sleeping well at night. It's also why I've become something of an advocate of MoRs and a critic of basically all other traditional payment service providers. I fear the reckoning is a matter of when and not if and so passing the buck to an organisation that actually has a fighting chance of complying may be the only reasonable survival strategy. Of course then I lie awake worrying about the lack of competition in the MoR space - not helped by today's announcement in all honesty - and the dangers of being so heavily integrated with a specific third party service that can't easily be replaced and yet is critical to the sales process. What a time to be running a business in a world where this kind of international sales should be thriving.

When that happens, I’ll start to care (because I’ll have to).

Until now, please, friend, this isn’t something you need to lose sleep over. Assuming I’m not talking to the CEO of Unilever.

often problems that impact a small segment is blown out of proportion and this is a classic marketing strategy. throw in anonymous social media handles and boom you created the illusion a need for a problem you dont have or likely have

but the reality is if you dont have 1M ARR from EU there really isn't enough on the table to matter. So you owe 1k in Hungary or UAE, they are not getting INTERPOL to bust down your door especially if you dont live in EU or have legal entity in EU.

It's amazing how rampant crowd thinking is among software engineers and its exploited constantly by a gaslighting crowd who show up to spread the fears until it becomes just accepted as a real risk.

I don't consider failing to meet legal and tax obligations to be merely a "problem that impacts a small segment".

It's true that realistically SMEs have a degree of shielding from the consequences because there are plenty of large enterprises to go after first and they have bigger wallets for the tax man and his limited resources to chase.

But those enterprises also have armies of lawyers and accountants to defend themselves and the scale to treat any lost decisions and resulting penalties as just a cost of doing business. To a small business the cost of responding to a formal audit by the tax man alone can be a major expense and have a deep and long-lasting personal impact on the people running the business. Ask anyone in the UK who's been the wrong side of an IR35 investigation - even one they "won" after several years of fighting with HMRC.

As I said before - the trouble with the ostrich argument is that it works until it doesn't. The argument people are making against mine here is essentially that it's OK not to do your taxes if you can get away with it. If software engineers are excessively risk averse in this then maybe entrepreneurs are excessively risk tolerant. We probably never hear about the acquisition that never happened because of something that showed up in due diligence or the startup that never got that far because it did get bogged down in red tape when something went wrong and never recovered.

The real point here is that it's crazy that anyone even has to have this discussion. Governments should get their acts together and reach agreements where international trade below some reasonable de minimis threshold doesn't incur any international compliance or tax obligations at all and only businesses big enough to be turning over significant amounts of money in a particular area need to do anything special. There should be no need for merchant of record services to exist - at least not from the point of view of ensuring tax compliance for small businesses.

> The argument people are making against mine here is essentially that it's OK not to do your taxes if you can get away with it.

For clarity, this is not the argument that I am making.

My argument is that it is obviously impossible for me, a solopreneur, to meet my global tax ‘obligations’.

As in, literally impossible. It’s not that I’m just choosing not to. It would be impossible for me to run a business while registering for and remitting tax to all of the global authorities who, since I sold a $20 PDF to someone in their country, believe that I owe them taxes.

And so if that’s against the law, well so be it. Let them come. There’s nothing I can do short of shutting down my business.

Because whose law, by the way? Serbia’s tax law? I’ll tell you now, sitting in my kitchen in Australia, Serbia’s tax law is not high on the list of things that I fear.

Maybe this works well for anyone outside EU or maybe it is country specific, but in my country I have to report the invoices and if they are from inside EU or outside EU.

In case of invoices from EU as I am living in an EU country and the business is registered in an EU country I have to take into account collecting or not VAT and what percentage of VAT needs to be collected. There is OSS VAT and some other facilities, but all this takes days per month from my time to handle. And I prefer to spend those days coding something.

Moreso if they are inside EU there is a mechanism to cross-check if the other side reported the invoice (either sent or received) so to be compliant if you sell to multiple countries you have to report invoices.

The same goes for selling to US specially in case of ebooks - there are treaties in place that define royalty percent when the final customer is an US citizen.

So maybe if you are small and have the business registered in EU, the fiscal authorities will not come for you, but if they come the penalty is big enough to get me out of business. Thus I use MoR where for the income I get one or two invoices per month from LS and that is the only thing to report. Better as they are registered in US the reporting is simpler :)

I think it's an aspirational purchase - startups are naturally aiming to be in that 1% one day.

I don't get your argument that most startups won't reach the MRR to justify MoR. Could you clarify?

what is the threshold

=> 1M ARR from EU

if you make close to or more than this from EU countries you can afford to hire

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