Payments giant Stripe has made another move in the area of tax and tax-related services not too long after it acquired Tax Jar in April. Stripe has announced that it is launching a new product that will provide automatic, updated sales tax calculations (that entails VAT, GST and sales tax) and related accounting services. The company is calling the new product Stripe Tax and revealed that it will initially be available for Stripe customers in the U.S. and thirty other countries.
While the company’s latest product Stripe Tax is totally different from the company’s latest acquisition – Tax Jar, they still share some type of connection. Matt Henderson; the company’s Business Lead for EMEA told Ingrid Lunden of TechCrunch that while Stripe Tax was being built out of Stripe’s Dublin offices over the past few month, Tax Jar was identified as a strong company in the field of Tax which eventually led to the M&A between them.
One of the biggest challenges of users of digital payments platforms like Stripe is finding a way of seamlessly charging and tracking sales tax. This is the problem that Stripe aims to eradicate with its new Stripe Tax product.
According to fintech company, since codes get updated all the time, huge amounts of variation and compliance complexity are bound to take place as digital and physical goods are taxed in over 130 countries. Mistakes in mishandled tax can lead to interest on past-due amounts and these interests could be as high as 30 percent.
The company’s Business Lead for EMEA – Matt Henderson revealed that a sales tax tool has been one of the most demanded features by users of the payments platform. He also added that the pandemic, which made e-commerce and digital transactions experience meteoric growth, was another reason for the strong call for a sales tax tool.
Stripe Tax is one of the most important products that they has ever launched. Stripe customers no longer have to use third-party sales tax services to work out sales tax. Users now have a more direct system that functions like an extension to Stripe. Stripe tax, therefore, is a solution that eradicates the pain of dealing with numerous, complex and usually localized tax codes.
Stripe Tax can be regarded as a panacea to all the sales tax-related problems of users on the platform, providing an easy, convenient and seamless way of charging and tracking sales tax.