tech-company, taxesI want to create an e-commerce site and need a basic overview of how to deal with taxes.
If a user buys something, should the transaction be taxed automatically?
I know that this may vary from country to country. Where can I get help on topics like these around me? Would a start-up accelerator be able to help me learn how to deal with taxes?
I can share my experiences from selling software online in the U.S., though I’m not sure how helpful it will be for Europe…
I live in Massachusetts in the United States. Under U.S. laws, I’m only required to collect sales tax from customers in Massachusetts. If the customer is in another state or another country, then I didn’t have to worry about it. As a result, I only had to collect sales taxes for a small percentage of my purchases.
I used PayPal for payments, and PayPal made this really easy. I setup my PayPal account to collect sales tax for Massachusetts buyers, and PayPal basically handled it all for me. PayPal knew which buyers were from Massachusetts and would automatically add the tax to the purchase price.
I would then periodically make payments to the state of Massachusetts for the sales tax that I collected.
If you are using a third party payment provider, such as Stripe or PayPal, I would check their documentation. If they don’t handle Europe taxes, then there is probably a Europe-based alternative that does.
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