Just a quick question… We’re thinking of switching to Paddle (https://www.paddle.com) to handle licenses and payment. I’ve spoken with them directly and they seem pretty legit and have a good roadmap.
Are any of you guys using Paddle?
Cheers,
Dan
Yes I am using Paddle on both ThemeFlood and Stacks4Stacks.
Question back:
- Why change from FastSpring to Paddle?
- I Does Paddle also support VAT tax dues in the different EU states?
Quick answers…
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Paddle are more developer focused, they have features that are more suited to app devs. They are also more focused on helping developers promote and sell more apps. I also think we can get a better rate than FS offer!
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And yup, Paddle handles the VAT for you
Interestingly… If we’re all using Paddle, we might be able to offer an option whereby users can purchase add-ons right on the community site. This would make it even easier for users to buy more add ons. This would be pretty awesome, and a win for everyone.
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The checkout process does look much simpler than the one from FastSpring. Nice.
- Do you know if it is possible to use just one base currency (eg €)? FastSpring at least requires US$ in addition.
- Will the payout be done in the base currency or £?
I doubt that the ones using Cartloom will switch, even I wonder how they are doing their tax declaration with all the 28 EU countries 
You get these options for pricing in different currencies, nice and simple:
You can set the payout to be in the following currencies:
Pretty nifty, hey? 
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You already do. I am already able to add a direct cart link to the buy now buttons of an add-on instead of directing a user to my site. Or were you thinking of some other new kind of checkout flow?
Paddle seems to have quite high commissions.
5% + 50c are higher than even PayPal in its basic tier.
If you compare PayPal with Paddle (or FastSpring, same), you are comparing apples to oranges.
Paddle takes over the invoicing and the VAT payments to all the different countries (e.g. the 28 EU states) where digital downloads are obliged to VAT. Paddle is a reseller.
PayPal only transfers the money.
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For devs in the EU this is better than FastSpring – Paddle seems nice enough – but for devs outside the EU that don’t pay VAT it’s probably not so great. It’s significantly more expensive than plain old paypal/stripe. The marketing advantage would have to be pretty significant to justify that cost.
For me, selling through a retailer that pays VAT also comes at a significant disadvantage of increasing the cost of my products in some countries.
@ben would pay $49.95 for Stacks today, but if I switched to Paddle it @ben would have to pay $62.44 for the same software. i’m a commie pinko hippy and think taxes are a fine thing but there is no obvious benefit to me, my family, or my company to that price increase. it would come directly off my bottom line and benefit only those in Sweden (or the EU country that is increasing the price).
note: Texans do pay 6% more for my plugins than others – which pays for my roads and schools 
@isaiah don’t shoot the messenger, but officially, you have to pay / charge tax when selling digital goods from USA to a EU member state already since 2003. It just seems that nobody takes care about that.
you are wrong about that but I fear opening a whole can of worms explaining why. I’ve talked with numerous laywyers and accountants about this very subject and they have all been in agreement.
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Again, don’t shoot the messenger. Just search for “eu vat digital goods 2015”, and you will find plenty of references.
There was a change in the law beginning 2015.
Just one reference: https://www.taxamo.com/us-digital-companies-eu-vat/
Another example, Apple is charging VAT for the App Store Downloads in EU since then.
Just FYI…
Paddle seems to be much cheaper taking only 50Cent + 5%, while Fastspring takes 95Cent + 5.9%.
Or am I getting this wrong?
I am really thinking about switching from Fastspring now…
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Me too. Also no PayPal transfer fees…
Hi Instacks,
I read that article too, but as usual the devil is in the details
First, if a company has a business location in the EU, such as Apple, then yes, they are required to pay the VAT. If the company location is outside of the EU, then those outside countries can not enforce the VAT. That article was talking about US companies having a location in EU - confusing as usual, but the simple & straight forward approach is that for outside EU companies, country’s can’t enforce each other’s tax laws
Of course, when I had been a developer in the US, I would also have been trying to find evidence these tax laws have not been valid for me
I only see resources that you have to apply tax, like this one: http://www.forbes.com/sites/janetnovack/2014/05/15/european-vat-10-things-online-sellers-need-to-know-about-taxes-on-digital-goods-and-services/#2ccdb2994290
But, as said, I am no accountant, and it might be true that these rules cannot be “enforced”, but still “valid”.
To stop the discussion here on that specific topic, I suggest you have a talk with your accountant. I had a talk with mine, and the outcome was clear (yes, I am EU based).
I don’t want to harm, just to inform and help.
Cheers, Jannis
Hands up who loves discussing EU VAT laws…
it’s all rather confusing, and stifling for small businesses, but it’s pretty clear that if you’re selling digital goods in the EU, you need to be charging VAT. The easiest way to handle this is to use services like FastSpring and Paddle, as they collect the VAT for you.
Read this article as it has a clear explanation of what you should be doing All You Need to Know about the 2015 EU VAT Changes for Digital Goods
Note to tech companies outside the EU: Although nothing changes for you when selling digital products to EU companies or consumers, officially you have to charge VAT rates of the country of the buyer (since 2003). I don’t get the feeling that any US startup is paying attention to this, or has implemented it, for that matter. I have yet to see the first VAT implementation by a US startup. I think all companies outside of the EU are just keeping quiet and ignoring the law while happily selling digital goods to the EU.
Just because you aren’t charging VAT, doesn’t mean you shouldn’t be.
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Unless there are specific treaties, a country cannot practically impose laws on citizens outside their borders.
That said, I trust my CPA (accountant) and pretty much just do what he says. I’d recommend everyone do the same.
I wonder, if you’re a US business/indie and you use FastSprings do they charge EU VAT? I know they’ve always handled VAT for us, but then we’re in the UK, but then they are a US company… so why should they have to charge VAT? 
hmm
Anyways, always take advice from your accountant, not online forums and you’ll be fine 