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โฐ Itโ€™s time to stop ignoring SaaS sales tax

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Looking for help with your sales tax on software? Donโ€™t get stuck with expensive tax advisors, punitive fees & fines, or complicated tax calculators that take forever to integrate.

With Paddle, you can offload all your sales tax liability.

Join 2,000+ businesses growing with Paddle

Framer
Iconosquare
Kaleido AI
Renderforest
Matomo
Resume.io

How complex are sales tax regulations today?

As a software business, you owe sales tax where your customers are.

That means you need to register, charge, file & remit the correct sales tax in every taxable jurisdiction you sell software in - country, state, even county-level.

Thatโ€™s thousands of separate tax jurisdictions with different tax rates, product rules, languages, currencies, and filing processes that you need to keep on top of every month.

โ€œYou donโ€™t have to be big to be caught by the tax authoritiesโ€

โš ๏ธ Late registration, filing, and payments attract penalties and interest over the weeks and months of non-compliance. This also delays and even blocks your key liquidity events like fundraising, acquisitions, and IPOs.

โš ๏ธ Repeated offences & blatant tax evasion earn punitive fines for companies and company officers, and (in many countries) prison sentences.

โš ๏ธ Tax accountants & calculators don't take liability but you do. When you can't shift liability, it's your responsibility to get it right.

๐Ÿฅ‡๐Ÿฅˆ๐Ÿฅ‰ We rated & ranked every tax jurisdiction in our Tax Agony Index โ†’

๐Ÿ•Š๏ธ Now you can outsource your global sales tax compliance

Paddle Comply is the only way for SaaS businesses to sell globally without any sales tax liability. We take liability for showing & charging the correct rates of sales tax. We file & remit sales tax across every jurisdiction you sell in. All 2000+ software businesses on Paddle have up-to-date records proving their sales tax is settled.

That means every dollar, peso, and rupee you run through Paddle is tax compliant globally - all at no extra cost with the Paddle platform.

Explore Paddle Comply โ†’

How does Paddle compare to DIY sales tax solutions?

Registering for sales tax

If the product or service you are selling is taxable in a given jurisdiction, youโ€™ll need to register for sales tax when your sales exceed the threshold (usually the value of sales and/or an amount of transactions).

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Growth-ready

No need to register for sales tax

๐Ÿ‘‹ Your payouts are tax exempt since sales tax has already been paid

๐Ÿค— Itโ€™s the Revenue Delivery Platform responsibility to make sure itโ€™s registered everywhere it sells to.

โœ… You can start selling in these jurisdictions right away.

Growth-blocker

You must register in every tax jurisdiction

๐Ÿ‘ฉโ€๐Ÿ’ป Your team is responsible for making sure your company is registered everywhere it needs to be.

โŒย  To be compliant, when your sales reach the threshold in a jurisdiction, you may need to be registered before you can continue selling there

Growth-blocker

You must register in every tax jurisdiction

๐Ÿ‘ฉโ€๐Ÿ’ปย  A tool helps you understand where you need to be registered but the responsibility to register is with your team.

โŒ To be compliant, when your sales reach the threshold in a jurisdiction, you may need to be registered before you can continue selling there.

Updates, filing and remittance

Each tax jurisdiction has its own policies for companies to follow when they file and remit taxes, including the frequency at which you complete the process and the method of payment.

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Growth-ready

No sales tax overhead

๐Ÿค— Itโ€™s the Revenue Delivery Platform responsibility to stay on top of any new regulations and payment thresholds.

โœ…ย  The platform take responsibility for filing and paying taxes correctly on your behalf.

๐Ÿ‘‹ Paddle has a team of finance experts dedicated to managing filing and tax remittance

Growth-blocker

You must file the correct rate of sales tax

๐Ÿ˜ฐ Your team will need to be aware of the regulations in each jurisdiction and understand any changes as they come into effect.

๐Ÿ‘จโ€โœˆ๏ธ Responsibility for correctly filing and submitting payments lies with you as the seller.

Growth-constrained

Still liable for staying updated and filing correctly

๐Ÿ”” You may receive notifications if you reach a certain threshold or regulations change.ย 

๐Ÿ‘จโ€โœˆ๏ธ Responsibility for correctly filing and submitting payments lies with you as the seller.

Penalties for non-compliance

Getting sales tax wrong can be extremely costly for businesses. Penalties can be incurred across the process, from late registration to underpayment or missed payments.

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Growth-blocker

No sales tax liability

๐Ÿค— Liability lies with the Revenue Delivery platform.

๐Ÿ‘จโ€โœˆ๏ธ In an audit, the platform is responsible for submitting the right evidence to the tax authority. They use specialist engineers and finance experts to get tax compliance right.

๐Ÿ’ฐ Any penalties are payable by the platform.

Growth-blocker

Full liability with your company

๐Ÿ˜ฐ Liability lies with your company.

๐Ÿ‘จโ€โœˆ๏ธ In an audit, you will need to submit the right evidence to the tax authority.

๐Ÿ’ฐ Any penalties are payable by your company.

Growth-blocker

Full liability with your company

๐Ÿ˜ฐ Liability lies with your company.

๐Ÿ‘จโ€โœˆ๏ธ In an audit, you will need to submit the right evidence to the tax authority.

๐Ÿ’ฐ Any penalties are payable by your company.

Sales tax summary

How do different options compare?

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Growth-ready

Fast, simple sales tax compliance

๐Ÿค—ย  No dedicated internal resource required.

๐Ÿ’ธ One fee to the Revenue Delivery Platform, deducted before you receive your payout.

๐Ÿ‘จโ€โœˆ๏ธ A Revenue Delivery Platform is liable for all tax compliance.

Growth-blocker

You must register in every tax jurisdiction

๐Ÿ‘ฉโ€๐Ÿ’ป Requires dedicated headcount.

๐Ÿ—“ Time-consuming for the team managing tax in every jurisdiction.

๐Ÿ’ฐ High cost due to headcount and resources required. Seller is liable for penalties and fines too.

Growth-blocker

You must register in every tax jurisdiction

๐Ÿ‘ฉโ€๐Ÿ’ป Requires some internal resources.

๐Ÿ—“ Time-consuming as the team is still responsible for managing tax in every jurisdiction.

๐Ÿ’ฐ High cost due to paying for the tool plus additional internal headcount.

โ“ Some tools may offer compliance management for an additional charge.