The challenge is that I don’t want to write invoices manually.
Rather, I’d like to have a software solution check (a) the location of the client, (b) apply the location-specific VAT rate to the invoice, and - ideally - © remit the tax to the local tax authority.
I know… I’m dreaming. 😢
I’m currently using the following tech stack:
Gumroad: My online course platform -> great to start, but doesn’t support the features I need to grow my course offering.
Paypal: My payment processor -> I really don’t like them
Gumroad takes care of compliance with tax laws (#3) by applying the location-specific tax rate but it doesn’t support email marketing (#1) and it’s payment processor - Paypal - is taking a criminal cut of my revenues (#2).
Here a couple of alternatives I looked at:
Teachable takes care of local tax (#3) but doesn’t offer certain features I want (#1). The fees are not as steep as with Paypal, but they still take a 5% on all transactions (#2).
Podia offers a great product (#1) and doesn’t charge any additional fees on the transactions (#2). Yet, their integrated payment processor - Stripe - doesn’t take care of EU VAT (#3).
There’s other services like Paddle & Quaderno
who focus on tax collection and remittance but those either (a) don’t integrate with the software solutions I’m looking at or (b) are an on-top plugin for Stripe.
Bottomline: there’s no perfect solution.
Next Step: What to Do Next?
A couple of thoughts:
Short-term: It looks like the EU is offering a VAT exemption for qualifying goods (i.e. educational products/services). The exemption is tied to localized revenue thresholds. In Germany it’s €17,500.00 per year. Currently I’m <€1k so I should be good for this year. // BUT I’ll do more research and see if this actually applies to me.
Mid-term: Stripe acquired TaxJar. Stripe is finally listening to its customers and is working on a built-in feature for localized tax collection and remittance. A boy can dream 🙏
⭐ASK: If you have any expertise and/or pointers, please let me know.⭐
This is a big problem for solo creators and a lot of people would benefit from an elegant solution.
Come on! Be a hero!