Stripe, a financial infrastructure platform for businesses, has launched strip tax for platforms enabling platforms using Stripe Connect to offer Stripe Tax as a product to their customers.
«Help with VAT and VAT calculation and collection was the most requested feature by users of our platform. Any business that accepts payments online quickly realizes that tax compliance is a major concern, and of course that includes businesses operating on platforms“, It says Michael Carney, Stripe Tax Product Manager. «Tax help is a logical extension of payment processing, which is why we built Stripe Tax. And now we have developed Tax for platforms so that platforms can offer this service to their customers and support them in all aspects of the transaction lifecycle.‘ he qualifies.
Software platforms play an important role in enabling access to the online economy. Thousands of them are based on StripeConnect, enabling millions of individual businesses to function. Operating in almost every industry from hairdressing to home repairs to vacation rentals, the platforms make it easy for any business, regardless of size, to participate in the online economy. They even allow sole proprietors to sell across borders and grow into a multinational one-person business, with all the complex new tax requirements that that entails.
Solve the tax challenges of world trade
The platforms have a long history of supporting their users’ payment needs and enabling them to transact with customers around the world via Connect. At the same time, however, they have not been able to provide their users with tools to manage the tax obligations of these transactions. And that’s a big challenge as the tax landscape is ever-changing: last year there were over 600 changes to sales tax rules and rates in the US alone, and even more sales tax changes in the EU.
Stripe Tax automatically calculates and collects the correct sales tax, VAT, and GST in over 40 countries and every US state for its users. Tax also speeds up the filing process with automated reports specific to each US state and summary reports for filing in all countries where a company is registered for tax collection. The number of businesses using Stripe Tax, which launched in 2021, has tripled in the past 12 months. However, previously the product was only available to direct Stripe users, not connected accounts.
With Tax for Platforms, platforms can now offer the service to businesses operating on them, allowing them to automatically comply with their VAT, VAT and GST obligations. It also gives the platforms themselves the opportunity to offer a more unified solution, differentiate their offering and create new revenue streams.
The platform revolution continues
If you offer your customers more holistic support, you can increase both the stability of a platform and the financial success of your enterprise customers. Thinkific is a software platform that gives developers the tools they need to design, market, and sell education online. Now you can also make it easy for your users to calculate, collect, and report all taxes related to the payments they receive.
«Our creators told us they had problems with taxes. They sell digital products across the country and around the world. It’s nearly impossible to keep up with the different tax laws, leaving most creators non-compliant and subject to penalties. With Stripe Tax we can offer one Solution that automates the calculation and collection of taxes on our creatives’ transactions so they can spend less time on taxes and more time growing their businesses«, stressed Peter Fitzpatrick, Thinkific Vice President of Commerce.
«Thinkific has all the features we can dream of for our affiliate business. It’s great to see them continue to innovate. Now we don’t even have to think about taxes, it’s every entrepreneur’s dream“, Add Busy Works Beats, thinking creator.
Tax for Platforms is available in all countries where Connect and Tax are available. Platforms looking to offer taxes to their customers can find more information here.
Besides Tax, Connect can also be combined with many other Stripe products and services to customize the user experience for specific use cases. This includes point-of-sale payments with Stripe Terminal, issuing payment cards with Stripe Issuing, managing recurring revenue with Stripe Billing, and more. Here is a full overview of Connect’s compatibility with other Stripe products.