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🌶 Sales Tax Agony Index 😩

New laws across the world mean you owe sales tax on software and digital products wherever your customers are (learn more here). Here are the most painful tax jurisdictions for your team to prioritise (or you can hand it all off to Paddle).

Estimate your tax liability for 2020 - 2021

tax liability this year estimated penalties

How is this calculated

Your exact tax liability will vary according to your customer and revenue distribution around the world. Different jurisdictions will have different tax levels from low tax regions like South Dakota (4.5%) to high-tax regions like the Netherlands (21%).

This low/high estimate is based on a 80:20 distribution of your revenue in a 4.5% and 21% tax rate, over 12 months.

Low estimate: MRR * 12 * ((0.045 * 0.8) + (0.21 * 0.2))

High estimate: MRR * 12 * ((0.045 * 0.2) + (0.21 * 0.8))

The penalties estimate tends to come to about 10% of the total. This is based on a midpoint:

Penalties estimate: MRR * 12 * 0.1 * ((0.045 * 0.5) + (0.21 * 0.5))

Agony Alphabetical Tax rate Lowest tax thresholds Hardest to register Has prison sentences
Tax jurisdiction
Sales tax rate
Taxable goods
Admin agony
Worst penalty
Total tax agony rating
How do I solve my tax liability? Load More +

How to become sales tax compliant globally 🗺

Three Routes to Compliance for SaaS Executives

SaaS executives have a choice of three routes to global tax compliance. Get the guide to walk through the options for your team.

Download the guide »

Don't Worry, Ask Hugo

As CFO of Paddle, Hugo's finance team manages global tax compliance for $100M's of ARR from over 2,000 software businesses. Ask your questions in our live webinar.

Watch now »

How can Paddle help?

Paddle can take all your responsibility & liability for sales tax off-your hands. Our global entities, finance team, and $160k+ year spend on agents, tooling, and accountants is ready for you.

Learn more »