This transcript was generated from the episode audio and may contain minor errors.
If you are selling digital products online, those products could be templates, e-books, courses, anything else, you might think taxes are simple. After all, there's no shipping, there's no inventory, what's the big deal? Well, the thing is, things get trickier when you start selling across borders. And that's what we're going to look at in today's episode. Do you need to worry about international taxes on digital products? Stephen,
a long time listener has started seeing international customers show up in his sales, which is exciting. But he's also wondering if he's stepping into a tax headache without realizing it. So let's consider what small digital sellers need to know about international taxes. How can you remain compliant, do the things you're supposed to do, etc., but also not drive yourself crazy because you didn't get into business to try to figure out international taxes, right? You got into business or side hustling because you wanted to make some extra money, do something fun, have a little creative project. That's what it's all about. So let's see if we can make this easy,
detailed question and my answer coming right up. This is Stephen, a long time listener and side hustler. And I'm running into a problem that I didn't expect. I sell design templates and digital guides online. And for a while, my customers were all US based easy. But now I'm
starting to see orders come from Europe and Australia and other international markets. I've heard vague warnings about VAT and international tax complications for like digital products. And I'm wondering, how can a small digital creator handle global sales without getting crushed by tax headaches or compliance issues? Is this something that I should be worried about at my scale? Stephen, good news and bad news. Let's start with the bad news. When you
sell digital products internationally, you often trigger value added tax, also known as VAT, or similar digital sales taxes. In the EU, for example, the European Union, VAT applies to digital services sold to EU customers, no matter where you're based. So that's the bad news. Like technically, there is some liability. The good news is a lot of sales platforms like Gumroad, Etsy, Shopify, PayPal, they automatically handle this for you. There's basically an option like
you just kind of check this option in your settings, they collect and remit the taxes. So you don't actually have to file any extra paperwork. That just makes things so much easier. If you're using a self hosted tool, then you might need a third party service. One is called Taximo. And
that will help you manage compliance. But if you're using one of the big ones, then like I said, they'll do it for you. And that's so much better. And also customers in those regions are used to sales taxes, like they don't like them, of course, but they're used to it. So it's not like this is going to keep you from getting the sale. So basically, if you set it up right, you never have
to deal with it. And that's probably the best advice, the best approach for most people. So I wouldn't ignore those rules. But I would also try to delegate the process for managing that to the platform that I'm already paying a commission to. Right? That's the whole point of these platforms,
they make things easy for you. So use them for what they're good at, get the basics right, you will future proof your side hustle. Hope that's helpful listeners. Let me know if you have questions or comments side hustle school calm new episodes every day 3000 plus 3100 plus now in fact, we'll continue to feature listener questions and comments and updates throughout the year. New episodes every day. My name is Chris Guillebeau, this is side hustle school from the onward project.
