Sales and value-added tax calculations and billings can be a nightmare for merchants to handle, especially for online, cross-border transactions. Stripe Tax is the payment platform’s just announced service that will appear on a merchant’s website that simplifies the process. Merchants will save much time and angst taking advantage of this feature.
The following excerpt from a CNBC article reports more on the topic:
- Stripe debuted a new feature that it says will make it simpler for businesses to calculate and collect sales taxes.
- British newspaper publisher News UK and Dutch start-up Routetitan are among those already using the service.
- The company has been increasingly expanding into areas beyond payments, such as lending and bank accounts.
Matt Henderson, Stripe’s EMEA lead, said working out how much sales tax needs to be paid on certain transactions can be a complex process, with rules varying across different countries. In the U.S., there are over 11,000 different sales tax jurisdictions, “often the size of a small town,” Henderson told CNBC.
“There’s a lot of different variables that go into determining what’s the right rate and when is it due for collection and payment,” he added. “In Germany, for example, a pet rabbit is 19% VAT and a pet guinea pig is 7% VAT, whereas in the U.K. or Ireland you wouldn’t make a distinction on such things.”
Overview by Raymond Pucci, Director, Merchant Services at Mercator Advisory Group