Stripe Tax automates much of the calculating and collecting of levies like VAT and sales tax for businesses.
Fintech giant Stripe is rolling out a new product to automate businesses’ tax compliance.
Stripe Tax, which was built at the company’s engineering hub in Dublin, helps businesses to automatically calculate and collect sales taxes, VAT and goods and service taxes where they do business.
The product has been rolled out in 30 countries and all US states. Stripe Tax manages the requirements for tax collecting from jurisdiction to jurisdiction. This ensures merchants are in compliance with local tax rules but without the headache of managing it themselves.
According to a 2020 report from Stripe, two-thirds of businesses say that managing tasks like tax compliance inhibits their growth and takes up time that could otherwise be spent on product development.
The matter of tax has become more complex with the mix of physical and digital goods and sales across borders.
Non-compliance with taxes, even through accidental oversight, can lead to serious sanctions or interest-laden tax bills for businesses.
Stripe Tax calculates taxes due by determining an end customer’s location and products they’re buying. It adapts as changes to tax regimes come into effect and generates reports for businesses on the levies calculated and collected.
“No one leaps out of bed in the morning excited to deal with taxes,” Stripe co-founder John Collison said. “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.”
Large companies, including News UK, have started using the product.
“Directly integrating Stripe Tax into our subscriptions platform will save us countless hours, time that can be better spent elsewhere,” Ruan Odendaal, head of subscriptions platform at NewsUK, said.
Stripe has had a very busy 2021 so far. After raising funding at a $95bn valuation, it has been rolling out more services that go beyond the payments processing the company was originally built on, as well as expanding geographically with a focus on the Middle East.