Regulate sales / VAT tax remittance on the payment processor level

Current state of international taxes for online sales is absurd.

In short, someone selling their products globally (e.g. maker selling SaaS) has the obligation to:

• Monitor their sales for each country

• Register in every jurisdiction they owe taxes to

• Calculate the taxes they owe to each country separately

• Fill in the documents and pay the taxes monthly or quarterly

This is ridiculous. Following this process is not economically viable for most digital products.

This is why Merchant of Record (MoR) model with Paddle or Lemon Squeezy is so popular among people building and selling digital products. But this model has many flaws and can be straight illegal in many countries; it's better fitted for U.S. but not EU. With MoR:

• You have to pay all the available taxes, otherwise not obligatory (this makes products more expensive and lowers conversions)

• There's a big platform risk

• Customers are "legally" not yours (problems with valuation)

• There's a platform lock-in

• Payouts are slow

There are tools e.g. Stripe Tax, Quaderno and Easytools that help with this process and are very useful, but this has to change on the regulatory level.

People should be able to take care of their taxes and control them. This is one of the most important things for economic development.

I postulate:

• Regulating tax calculation and remittance within payment providers/processors (like Visa, or Stripe etc.). They have all the means (and even tools!) to calculate and remit taxes on merchants' behalf and deduct it from the payout.

• This will not only ease the complicated process but encourage people to stay within EU with their online businesses and drive more people from abroad (even US) to set up companies within EU.

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