I don't use Stripe Tax, but when I was incorporated in the Netherlands I would just charge everyone the same amount (e.g. $100), and then retroactively decide what percentage was VAT.
So if the customer was in the Netherlands (e.g. based on their credit card country + IP address), I would do $100 / 1.21 = $82.64 as base price, and the remainder as VAT.
The one issue I ran into this, is that whenever someone would ask for a proper invoice, I'd need to generate it with the above calculation. I think Quaderno did this for me.
But then if the customer was a business in say Germany (where I'd take the same approach, but 19%), they might then later provide their VAT ID and ask for their paid VAT back. As technically they don't need to pay it.
I'd need to tell them that if they provided their VAT ID, the base price would be $100 again (and so they didn't gain anything). Bit hard to explain to people 😅
This is probably the right answer, confirmed by some online searches and opinions from other communities. The downside is (at least here in Spain) it is really bureaucratic and painful to be a small business.
I'm using Stripe Tax and Stripe Checkout, which calculates the tax and generates the invoices + receipts. It works nicely. Need to do a followup call with my accountant to discuss it further.
I don't use Stripe Tax, but when I was incorporated in the Netherlands I would just charge everyone the same amount (e.g. $100), and then retroactively decide what percentage was VAT.
So if the customer was in the Netherlands (e.g. based on their credit card country + IP address), I would do $100 / 1.21 = $82.64 as base price, and the remainder as VAT.
The one issue I ran into this, is that whenever someone would ask for a proper invoice, I'd need to generate it with the above calculation. I think Quaderno did this for me.
But then if the customer was a business in say Germany (where I'd take the same approach, but 19%), they might then later provide their VAT ID and ask for their paid VAT back. As technically they don't need to pay it.
I'd need to tell them that if they provided their VAT ID, the base price would be $100 again (and so they didn't gain anything). Bit hard to explain to people 😅
Where are you incorporated now? I'm having to think about this as I will have to start charing users for jobsinenglish.dk soon.
Judging by my invoice for WIP.co membership, it's incorporated in Singapore.
Singapore. Typically you want to incorporate where you do (most) of your work.
This is probably the right answer, confirmed by some online searches and opinions from other communities. The downside is (at least here in Spain) it is really bureaucratic and painful to be a small business.
Same in the Netherlands and I think the rest of Europe. It's one of the reasons I moved out.
I'm using Stripe Tax and Stripe Checkout, which calculates the tax and generates the invoices + receipts. It works nicely. Need to do a followup call with my accountant to discuss it further.
What's the reason he wants you to charge tax where Stripe Tax dictates zero?
I’m not sure we need to look into it together more, they have experience with other PSP but not Stripe yet
Stripe charges a fee for invoicing, you can use this tool instead zenvoice.io/
Thanks I’ll check it out