You can use a MoR payment provider such as paddle or spring which handle tax compliance for you globally. They will pay tax and take liability on behalf of you.
I would expect that MoR's have their own set of issues. As they become the seller. So they are liable for the product quality, safety etc.
So I don't think signing up and working with them will be very easy. Especially if your product is not as standardized as an ebook or something.
So if you use those, I would love to hear about your experiences. What you sell, how the signup was and how the relationship with them is going.
Last time I looked at the Paddle signup flow, I already had two issues I could not resolve:
- What product category my product falls under. None of their categories seemed to fit.
- How to sign up before the site is live. Paddle wants to look at the site. So do you have to build a dummy that works up until the point where the user buys something and then it says "Sorry, we are still looking for a payment solution"?
Paddle only replied with nonsensical semi-automated messages to my questions. And when I answered and asked for a real answer by a human, I never got a reply.
I have recently used Paddle for a small saas. I am selling a Pro plan that give access to a restricted feature of the web app. As the Pro plan was introduced as a later stage, Paddle verification team accepted to review a "staging" version of the web app before I post it to production. I definitely talk to real humans, but I took time to express my situation. Paddle integration not too painful (good but not perfect documentation) considered it was my first saas. I might write about it if some of you are interested.
A secret url who wasn't to secret, it was simply a subdomain : preview.mydomain.com. Even if it was a subdomain, Paddle team was accommodating and approved the main domain. Just talk to them.
FastSpring is another alternative for SaaS & international taxes. I'm sure there's more besides Paddle & FastSpring. The idea is to look for a company that will act as the "merchant of record", not just a payment processor:
You end up paying more to them than Stripe would charge, but it might be worth it if you just don't want to deal with that administrative headache.
(I'm not running a SaaS, but shareware / downloadable software companies have been dealing with international taxes for 15 years or more now, since the digital EU tax laws came in. The idea of global consumption taxes wasn't really a thing until then, so you only had to follow your own local tax rules in the early-mid 2000s.)
Thank you. That's really helpful. It's nice to see governments working together to create whole new industries dedicated to solving administrative nightmares :)
I use Paddle on https://webtoapp.design and went through their and my TOS with a german lawyer. Basically they're only responsible for payments & customer support (however most customers come to me directly or get directed to me, as Paddle can only really resolve billing issues).
Paddle checked my site & product 3 times to make sure it complies with their requirements (an important aspect in my case was that my app creation process is automatic and not done by hand). I always got in touch with a human quickly, both during the account setup and later when I needed help (through chat or sellers@paddle.com). In fact I'd say it's probably the best support experience I've ever had.
Regarding your sign-up questions:
- Back when I signed up there were no such options but now I'm in "Standard Digital Goods" which seems to be the catch-all for everything that doesnt fit into one of the more specific categories.
- I had integrated Stripe and Paypal (never again) already, so I didn't have that problem. You could use a "Contact Us" placeholder to manually process payments I guess. If you immediately apply to Paddle then, you shouldn't have to keep that up for long anyways.
They charge 5% per transaction.