koidestroyer | Stripe Developers | Page 1

atomic gobletBOT Jan 26, 2023, 9:05 AM

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eternal oracle Jan 26, 2023, 9:05 AM

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hi! do you have an example payment ID/screenshots or more detail on what this VAT is and where you see it being sent to the connected account?

light cave Jan 26, 2023, 9:06 AM

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in_1MU6UZDoazGNhhkoU5aOdwkn

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This invoice shows the issue

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(Test mode invoice)

eternal oracle Jan 26, 2023, 9:07 AM

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thanks! which part specifically is the issue?

light cave Jan 26, 2023, 9:08 AM

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We added VAT to the invoice. We see:

Money received
Stripe fee removed
All Money sent to connected account
Our fee recognized (without VAT)

So all we see is that the full amount minus stripe fee on the connected account and no indication that the VAT will be sent back to us

eternal oracle Jan 26, 2023, 9:11 AM

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hmm I mean that is how you created the Invoice. You're using Destination Charges and the call you made (https://dashboard.stripe.com/test/logs/req_I70afi1MCVc0R0) was to

create an Invoice
specify the connected account is the recipient of the transfer
take an application fee of 428

so the effect is that when the Invoice is paid, the full sum of the payment is transferred to them, and the 4.28eur is sent back to your platform, minus the Stripe processing fee. https://stripe.com/docs/connect/destination-charges#flow-of-funds-app-fee

that's kind of just how it works, I'm not sure what you would like to see happen instead

light cave Jan 26, 2023, 9:13 AM

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We set a VAT of 20% so we would like to receive that money in addition to the fee.

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So basically you are telling me that if we will add that VAT we need to add it to the application fee

eternal oracle Jan 26, 2023, 9:14 AM

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light cave We set a VAT of 20% so we would like to receive that money in addition to the fe...

why? is that how it's supposed to work?

eternal oracle Jan 26, 2023, 9:14 AM

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light cave So basically you are telling me that if we will add that VAT we need to add it t...

that's the only way I'd see it working, yep

light cave Jan 26, 2023, 9:14 AM

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We as a platform are paying VAT for that transaction

eternal oracle Jan 26, 2023, 9:14 AM

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isn't the customer paying the tax?

light cave Jan 26, 2023, 9:14 AM

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our recipients are not the VAT payers

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not in this case

eternal oracle Jan 26, 2023, 9:15 AM

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hmm ok. I mean they are, the invoice they pay has VAT on it and their payment method was charged for that. Ultimately I don't understand the use case, I'm not a tax subject matter expert, just a developer

light cave Jan 26, 2023, 9:16 AM

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yeah, I'm not asking legal advice 🙂 I was trying to understand how this works and how can I make it happen

eternal oracle Jan 26, 2023, 9:17 AM

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well the only way is to split the funds by taking more of an application_fee_amount, or using https://stripe.com/docs/api/invoices/create#create_invoice-transfer_data-amount , or using a TransferReversal after the payment to pull some of the amount back from the connected account

light cave Jan 26, 2023, 9:19 AM

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👍

light cave Jan 26, 2023, 9:42 AM

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cool, one question about transfer_data[amount] - if we, the platform, need to be the settlement merchant, we need not set on_behalf_of ?

eternal oracle Jan 26, 2023, 9:43 AM

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yep

light cave Jan 26, 2023, 9:44 AM

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So in that case the money flow would change, but the end state and who's the settlement merchant remain the same as with the application_fee_amount - right? (assuming I set the proper amounts)

eternal oracle Jan 26, 2023, 9:45 AM

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the money flow doesn't actually change with on_behalf_of, the same amounts end in the same balances of the same accounts

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it just changes internal details of what we send to the card networks etc and how the money moves internally, and how the receipts/etc are branded for the customer

light cave Jan 26, 2023, 9:46 AM

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I mean, I'm currently using application_fee_amount and I think it makes more sense to add the VAT to change the mechanism to transfer_data[amount] .
But I don't want to change anything about who's the settlement merchant or anything else that I got using the application_fee_amount

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anything else with respect to who's responsible for what, not about the internal money flows

eternal oracle Jan 26, 2023, 9:47 AM

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it has nothing to do with on_behalf_of really, they're separate parameters

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the main thing about using transfer_data[amount] is the reporting is worse than using application_fee_amount since you don't get an explicit ApplicationFee object created on the platform representing your cut ; instead you have to 'know' your fee is the difference between the amount paid and the amount transferred

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it also has some implications on currency conversion since application fees you recieve are converted but the retained transfer amount difference is not https://stripe.com/docs/connect/currencies#destination-charges-without-on-behalf-of

light cave Jan 26, 2023, 9:50 AM

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Yup, that's another plus, we have less conversions in the transfer_data[amount] if I got that right

eternal oracle Jan 26, 2023, 9:50 AM

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I might have it backwards, you'd need to test it, unfortunately it's quite complex

light cave Jan 26, 2023, 9:52 AM

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yes, I am getting that vibe 😄

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And seems that it's not the most popular product and people here are not usually very familiar with it

eternal oracle Jan 26, 2023, 9:53 AM

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which product, Destination charges? they're super common, so are Invoices

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it's not that we're not familiar, I've been answering these questions for 5 years. It's that they're complicated and nuanced and everything ultimately depends on your exact set up and requirements in terms of the location of your platform and your connected accounts and the currencies you present and settle in, so there's no substitute for testing the exact scenarios

#koidestroyer