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Any European solopreneur using Stripe directly?
Hi all,
I am really curious, but if I would use Stripe as a solopreneur I would basically have to move over all my invoices to my accounting software and deal with tax on them, no?
This is the reason I am always thinking about merchant of records (even if partial, at least handling EU). Otherwise it just looks like a lot of accounting work for me.
But I wonder, if you are like me and actually use Stripe, how do you deal with it? Am I overthinking it?
I am really curious, but if I would use Stripe as a solopreneur I would basically have to move over all my invoices to my accounting software and deal with tax on them, no?
This is the reason I am always thinking about merchant of records (even if partial, at least handling EU). Otherwise it just looks like a lot of accounting work for me.
But I wonder, if you are like me and actually use Stripe, how do you deal with it? Am I overthinking it?
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I would not worry about it until you get like 1mln in yearly revenue
I keep seeing this answer, can you please elaborate why?
I am using akso Stripe directly but I don't get it because I do have to pay taxes on my country
Yes it's a weird advise. One visit from tax office and I am in big trouble for not paying VAT.
yeah, hell no, I wont risk either fuck that :-)
That's a very wrong thing to do. I am official VAT registered and payer. This could be very messy and costly.
I do so - depends a bit on your customer base and where they are from + how much revenue you are making
How do you bring all Stripe invoices to your accounting software?
I use Zoho Books x Stripe.
I used to when I still ran a business in Europe.
For EU customers buying high-priced products (e.g. sponsorships) I'd make sure to get their VAT ID so there's no tax.
For EU customers of lower priced products (like $20/mo subscriptions, etc), I would just pay the VAT myself. That way I could charge everyone exactly the same amount. For example, for a German customer where I'd need to charge 19% VAT, I would make $16.20 the base amount and $3.80 as tax.
Of course some customers would see it and say "hey I'm a business, I shouldn't have to pay tax!" in which case I would need to explain that I'd happily create a new invoice for them without any tax, but they'd be charged a $20 base amount. 😄
TLDR it's a mess, even if you try to simplify and eat the VAT yourself.
Oh interesting idea, thanks for sharing. Yeah it's a mess. We need this to be better in EU :( where are you based now?
I moved business operations to Singapore
ever tried another solution?
I don’t think merchant of records were a thing then. But even if they were, I believe there’s some drawbacks to those too
Yeah, I think I would love to do the same. How did you researched it? Or did you hire some agency for that?
I haven't done extensive research on it because it's not relevant to me anymore. But one drawback I remember is that MOR's are always required to pay VAT, whereas if you'd take care of it through your own (smaller) business you might be exempt in some cases. So you'd end up paying more VAT.
There was some indie maker on Twitter with an axe to grind against MORs, but I forgot who. But he had a lot of interesting comments 😅
Sorry I know drawbacks about MoR, I plan to use Paddle. Just recently I was thinking of maybe establishing a company in Singapore and use plain Stripe... since I see many people go this direction.
Oh right. Yeah I would definitely check with your local tax advisor. You typically can’t simply incorporate in another country to minimize taxes while remain living and working in your current country.
I think you can register elsewhere just might need pay some taxes. I am not trying to pay 0% eu taxes I am trying to find a way from possible accounting hell :) You really moved out of EU?
Hmm I’m not sure it works that way. I really advice you to talk to tax advisor.
And yes I did give up my Dutch residency (not nationality). You’re required by law if you’re less than 183 days a year in the country.
Thanks! Can you share if you have a residency somewhere or not at all? Btw you can always own foreign companies, it would be a bit weird if you couldn't (from the point of my country preventing me owning something somewhere).
right, but if you charge 19% for a German then you also need to deliver that tax to the German tax authorities. as far as i know that holds true for every. single. EU. country. 😕
there is a case where you charge local VAT to other EU customers when value creation is local (e.g. analyse foreign lab sample domestically) but that does NOT work with digital services.
EDIT: just learned about the MOSS scheme making it pretty easy with digital goods. still you need a tax advisor for that, i guess.
Yeah I used MOSS to pay taxes to all EU countries in one go. Didn’t need a tax advisor for that. Maybe once to explain it but after you can do it yourself.
But eventually as your business grows you want to delegate all tax stuff anyway
I wrote a post about this recently which you might find useful: ben-makes-stuff.beehiiv.com/p…
And I read it! But you are American ;)
Qonto integrates with Stripe to collect all relevant invoices for your accountability. Very effective!
Never heard of them, are they smth like Revolut?
It's a Bank specialized for businesses from France but I think they operate in all Europe. qonto.com/en
Here in portugal you need to use government authorized tax software for all invoices. Stripe invoices are not valid.
I found one that has an integration with the stripe api, but finding accountants that use it is another battle.
Frustrating how it's so complicated to just follow the law
yes :(
Wow that's next level
holy shit that‘s wild. but this is only true for portuguese businesses writing the invoice, right?
In a podcast with @domdom he spoke about using Paddle instead of Stripe for HelpKit. Maybe it worth looking into it.
That's a way to get around it. Have used them in the past, works fine.
You can direct all EU customers to Paddle, and the rest to Stripe.
I know them both. In fact
#businessclass started like an exclusive Paddle-based kit. But the question is about Stripe.
The short answer is that you should talk to an accountant who can give you actual advise for your circumstances. It’s either that or MOR if you’re in EU. I am using Stripe and would not want to figure this all out by myself or based on info on the internet. I know this doesn’t really help but it’s the only answer.
I plan to use MOR just thinking if I could still pull it off with plain Stripe
I am using it but I decided to not to worry in this current phase because the revenue is well below that needs to be reported in my country
I see, I am already registered VAT payer...
Tried to translate response from my accounting company about similiar question. Here's short ChatGpt translation/summary (I'm in Poland):
While Stripe's transaction list is helpful, you need to determine if the recipient is an individual or a company and their country of origin. This determines the applicable sales documentation:
This is a complex matter, and I recommend consulting with a tax advisor. Unfortunately, our accounting office does not offer these specific services.
Summary of VAT Rules for Services and Sales
For Businesses:
Polish Companies (PL): Invoice for domestic sales of goods/services, VAT charged in Poland.
EU Companies:
With EU VAT Number: No VAT charged, reverse charge applies (art. 28B).
Without EU VAT Number: Services outside Poland, no VAT charged.
Non-EU Companies: Services outside Poland, no VAT charged (reverse charge applies).
For Individuals:
Polish Residents (PL): Invoice for domestic sales of goods/services, VAT charged in Poland.
EU Residents: Generally treated as domestic sales unless for electronic, telecom, or broadcasting services. Requires OSS VAT registration if applicable.
Non-EU Residents: Check applicability of IOSS for imported goods under €150.
OSS/IOSS Procedures:
OSS (One Stop Shop): For EU-wide sales of services/goods above €10,000/year (€42,000 PLN). Registration via VIU-R form before the 10th of the following month after the first transaction.
IOSS (Import One Stop Shop): For sales of imported goods ≤€150 to EU individuals. Registration via VII-R form before the first transaction.
It's one big mess, my app earn me few euros, fortunately from Polish individuals, so it was the easiest option :)
Thanks a lot for sharing, I am generally speaking aware of these differences in taxes. The hard part is how to reasonably collect it and manage it. I can imagine it can be a big mess. I am from CZ.
As others have mentioned, it's best to seek advice from an accountant in the country where your company is registered.
For example, I run a French company, and all invoices are processed through Stripe. I have a separate Stripe subaccount for each service and one for the company itself.
Accounting is handled by a service called Dougs (www.dougs.fr?r=nDclTF7J7l). They offer two options: either they integrate with Stripe to pull transactions and invoices automatically, or you manually create a "ventilation" (accounting breakdown) each month for each sales channel (i.e., service). When I tested the Stripe integration, it didn't work well when receiving payments in multiple currencies, so I opted for the accounting breakdown.
In my case, Dougs handles all my tax declarations for France and help with MOSS for EU. For non-EU countries, Stripe tracks thresholds that vary by country and notifies you when you need to register for taxes and start collecting taxes in a given country. For example, I did this with the UK. However, for non-EU countries, I have to manage tax declarations manually, though I automate some processes with a script. As others have said, it can be a headache, and there doesn't seem to be a truly affordable global solution yet.
Thanks for sharing