You’re liable for sales tax on software transactions outside the US. If you’re not globally compliant, you're risking more than just fines.
More and more countries are charging sales tax on software and digital goods. As these taxes apply to where your customers (not your company) are based, you need to register, file and remit taxes for every global transaction.
With so many different tax jurisdictions across the world, keeping on top of your tax requirements is a minefield. Failing to comply can result in hefty fines, jail terms, reputational damage and fundraising complications.
Sales tax is a perfect storm for US companies. There’s no standardized global tax system or universal definition of ‘software’. Local tax processes vary within countries, states and cities, and regional regulations (like the EU’s CESOP) change frequently.
As a merchant of record, Paddle allows you to offload the complex work of international sales tax in over 100 jurisdictions.
Paddle acts as the middleman between you and your customer, taking on all of the responsibilities and risks associated with taking payments and sales tax.
We’re responsible for registering, reconciling and remitting sales tax - not you.
We’re liable for the non-compliance fines and penalties - not you. No matter your current size, you can sell to global customers, expand into new markets, and operate in the US without ever having to think about tax regulations.
Paddle handles registration, charging, and remitting of sales tax, so you’re automatically compliant for every transaction.
Paddle ensures ongoing compliance with ever-changing VAT regulations such as the new CESOP regulations in the EU.
With registrations in over 100 jurisdictions, Paddle helps you grow in new markets without managing international sales taxes.
Paddle's tax experts are always on-hand for tailored advice on sales tax specifics.
Adding a tax registration for every single country seemed totally crazy for the scale and complexity of our business. It quickly became clear that a merchant of record was worth it because it saves us the time and cost of trying to figure out how to file with every single tax authority in the world.
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