Tax calculation is handled

Sales tax and VAT obligations for SaaS products vary by jurisdiction and are expanding: the EU VAT Directive (2006/112/EC) applies to digital services sold to EU consumers regardless of where the seller is based, and US economic nexus thresholds mean many SaaS businesses now have multi-state obligations. Failing to collect and remit applicable taxes creates retroactive liability — tax authorities can assess back taxes plus penalties. This is an informational check because the legal picture varies significantly, but ignoring the question entirely is a clear risk signal for any product with meaningful revenue.

Stripe Tax is the lowest-friction solution: enable it on your checkout sessions and subscription creation, configure your business address in the Stripe Dashboard, and Stripe handles rate lookup and collection automatically.

// Enable automatic tax on checkout sessions
const session = await stripe.checkout.sessions.create({
  automatic_tax: { enabled: true },
  customer: customerId,
  line_items: [{ price: priceId, quantity: 1 }],
  mode: 'subscription',
})

// And on subscription creation directly:
await stripe.subscriptions.create({
  customer: customerId,
  items: [{ price: priceId }],
  automatic_tax: { enabled: true },
})

If you've consciously decided not to collect tax (e.g., B2B sales where the customer self-remits), document that decision in docs/compliance/tax-policy.md so it's visible to auditors.