If you are using Stripe Payments and PayPal to accept payments from international customers, you will need to have tools or processes in place to make sure your sales are compliant with global sales tax regulations, everywhere your customers are based.
Stripe Tax is a product within Stripe’s product suite that helps businesses calculate how much tax to charge on transactions in 30 supported countries.
This calculator then provides the business with reports that would then need to be filed and remitted to the authorities, either by your team, a tax accountant or another third-party tool.
Through its acquisition of TaxJar, Stripe offer an “Autofile” service for businesses in the US. Businesses looking to access this service will need a US bank account (there are also additional requirements in some states) and will still need to file and remit sales tax manually for any transactions outside the US.
With Stripe Tax, ultimate liability for sales tax lies with you as the business. But more on the ins and outs of Stripe Tax, here.
PayPal only handles payment processing, with no direct support for sales tax compliance. As such many PayPal users would be integrating with a tax tool, like Avalara, TaxJar or Quaderno to help with some of this process.
Understand your sales tax liability with our SaaS sales tax guide.