Consulting filter: overseas sales tax and payment options

December 15, 2024 11:36 PM

As a side hustle, I want to offer paid consultations. Think US, Australia, EU, those kinds of places. I want to know what (if anything) I will need to handle in terms of sales tax or VAT in the countries where my customers are located. Also, I want to get recommendations for payment services that will make this easier, or take care of it for me. Also, I'm looking for a payment service that's friendlier for clients than using something like paypal.

Obviously, you are not my tax lawyer or accountant.

My clients will all be from countries outside of where I am now (Japan).

Despite hours and hours of reading, I'm still clueless about whether I will need to pay sales tax or VAT in other countries. Payhip, for example, makes a big song and dance about how for "digital products" they'll pay the EU and UK VAT. But does this include me doing consulting (by email/zoom)? And more to the point, what if the clients aren't in the EU or the UK? What then?

Things are further complicated by some services (like lemonsqueezy) who do not allow consulting on their payment platform. They claim to take care of all the sales tax stuff worldwide, but alas I can't use it.

So if you're doing consulting remotely, how do you handle payments, and what do you do about this potential sales tax issue? For payment solutions, I'm looking for something clean and simple, and reliable.

Thanks everyone!

posted by Juso No Thankyou to Law & Government (4 answers total)

Best answer: This may partially depend on local laws, but in general if you're selling your own services, that is not a digital product and you are subject to taxation only in your own jurisdiction. Here in the UK I sell consultancy services to various countries, as a sole trader, and I pay tax only in the UK. I have to keep track of income I receive from other countries but it all counts as income received in this country, because that's where I'm based.
posted by altolinguistic at 1:07 AM on December 16, 2024

I sell consulting services to all of those countries and I only pay tax here, where the income is received.
posted by DarlingBri at 1:11 AM on December 16, 2024 [1 favorite]

As for a payment service, I have bank accounts in the UK and in the euro zone, so my clients who use those currencies can pay directly into those accounts, with no cost to them or me. For US and Canadian clients I use wise.com which means I have a set of bank details for each country, and clients can do an ACH transfer into that account, and I can then convert to GBP cheaply and at my convenience. Wise works for a variety of currencies.
posted by altolinguistic at 4:13 AM on December 16, 2024

Stripe Tax plus their invoicing system could be helpful here, although it's aimed more at API/software integrations than individual users. They list consulting services in their product tax code dictionary.
posted by 4rtemis at 11:32 AM on December 16, 2024