Today Stripe have announced the launch of Stripe Tax, one of their customers most requested features. It’s not surprising that this was on the agenda for Stripe considering their acquisition of TaxJar in May. The new feature will help businesses automatically calculate and collect sales tax, value-added tax (VAT), and goods and services tax (GST) in over 30 countries.
It automates tax calculation and collection for transactions on Stripe, tells businesses where they need to collect taxes, and creates comprehensive reports to make filing taxes easy.
How Stripe Tax works
This new feature aims to radically simplify tax compliance for businesses across more than 30 countries. Features include:
- Real time tax calculation: By determining the end customer’s precise location, and matching that to the product or service being sold, Stripe Tax always calculates and collects the right amount of tax, and keeps up to date with rate and rule changes so businesses don’t have to.
- Frictionless checkout: B2C businesses can reduce checkout friction, by using location information to calculate and show taxes in the most familiar way to their customers.
- Tax ID management: For B2B businesses, Stripe Tax collects the tax identification number from customers, and automatically validates VAT IDs for European customers, applying a reverse charge or zero VAT rate when necessary.
- Reconciliation: Stripe Tax saves businesses the pain of reconciling thousands of transactions by creating comprehensive reports for each market in which a business is registered to collect tax, speeding up filing and remittance.
“No one leaps out of bed in the morning excited to deal with taxes. For most businesses, managing tax compliance is a painful distraction. We simplify everything about calculating and collecting sales taxes, VAT, and GST, so our users can focus on building their businesses.”
– John Collison, co-founder and president, Stripe
