Financial infrastructure platform for businesses Stripe has launched Stripe Tax to enable platforms on Stripe Connect to offer their customers no-code tax compliance. The launch of the service was propelled by the fact that help with sales tax and VAT was among the most requested features of Stripe platform users, as confirmed by Michael Carney, product lead for Stripe Tax in the press release.

The company had built Stripe Tax as it was considered a logical extension of payment processing and furthered this with the launch of Tax for platforms, to help them provide it to their customers and assist them in all aspects of the transaction lifecycle. Stripe Tax for platforms and its capabilities Based on the announcement information, numerous software platforms like Mindbody, Squarespace, and WooCommerce are built on Stripe Connect, operating virtually in every industry and providing a multitude of businesses of all sizes with access to the online economy. With Tax for platforms, they are now able to simplify how businesses sell cross-border by offering a no-code solution for the complex tax requirements associated with international expansion.

Platforms have been supporting the payment needs of their users, enabling them to do business with customers throughout the world with Connect, yet they have been unable to provide their users with tools to manage tax obligations on those transactions. Due to this, users have had to manage complex tax compliance on their own, thus resulting in exposure to penalties and interest, in addition to uncollected taxes, should they get it wrong. The tax challenges of global commerce are considerable, largely because the tax landscape is changing constantly, with the press release detailing that last year there were over 600 sales tax rule and rate changes in the US alone, and even more VAT changes in the EU.

Additionally, a Stripe report found 18% of businesses to be citing tax complexity as to why they are not pursuing international expansion. Launched in 2021, Stripe Tax automatically calculates and collects the correct sales tax, VAT, and GST across more than 40 countries and all US states, while also helping expedite the filing process through automated, location-specific reporting for each US state, and providing summarised reports that can be filed in all countries in which a business is registered to collect tax. Per the announcement, the number of businesses using Tax tripled in the past year, however, the product was available only to direct Stripe users, to those leveraging Stipe through a platform.

With Tax for platforms, platforms are enabled to provide Tax to the businesses running on them – helping them meet their sales tax, VAT, and GST obligations in an automatic manner. Additionally, Tax offer platforms the opportunity to provide an increasingly unified solution, differentiate their offerings, and tap into new revenue streams. Tax for platforms is available in all countries where Connect and Tax are, and platforms looking to bring the service to their customers can find additional information on the Stripe website.

What is more, the announcement highlights that apart from Tax, Connect can be combined with a multitude of other Stripe products and services to help platforms provide additional value to their customers. Such services include POS payments with Stripe Terminal, issuing payment cards with Stripe Issuing, and managing recurring revenue with Stripe Billing, amongst others. .