Tax & Cross-Border Compliance
Automated tax calculation and line-item reporting are currently in development.
Today, tax collection and remittance remain the responsibility of your business or your configured payment providers under the Bring Your Own Keys (BYOK) model.
[1. Detect Customer Tax Jurisdiction] ➔ [2. Calculate Regional VAT / GST] ➔ [3. Record Tax in Ledger] ➔ [4. Export for Local Filing]
Selling software across borders introduces digital services taxes (VAT, GST, and Sales Tax). Understanding how taxes interact with your payment infrastructure ensures you maintain compliance without surprise penalties.
Regional Digital Services Tax (DST) Landscape
When selling digital subscriptions across Africa and global markets, different jurisdictions impose specific indirect tax obligations:
| Jurisdiction | Tax Type | Typical Rate | Scope for Digital Products |
|---|---|---|---|
| 🇳🇬 Nigeria | Value Added Tax (VAT) | 7.5% | Applied to digital downloads, cloud software, and SaaS. |
| 🇰🇪 Kenya | Digital Services Tax (DST) / VAT | 16% VAT | Electronically supplied services and streaming subscriptions. |
| 🇿🇦 South Africa | VAT on Electronic Services | 15% | Foreign and domestic suppliers of cloud services and software. |
| 🇬🇭 Ghana | VAT / COVID-19 Health Levy | ~21.9% (Effective) | Digital services and electronic commerce. |
| 🇪🇺 European Union | EU VAT (One Stop Shop / OSS) | 17% – 27% | Destination-based VAT according to customer country. |
| 🇺🇸 United States | State Sales Tax | 0% – 10% | Based on state-by-state economic nexus thresholds. |
SolydFlow provides calculation, reporting, and audit logs. We do not automatically remit taxes to government revenue authorities (such as FIRS in Nigeria or KRA in Kenya). You must remit collected taxes via your local tax accountants or use a Merchant of Record.
Planned Tax Ledger Record Schema
Upcoming tax features will record detailed tax breakdowns on every transaction record:
{
"transaction_id": "txn_01J8K9B2D7E4F1A0C5E8",
"pricing": {
"currency": "KES",
"subtotal_amount_cents": 43103,
"tax_amount_cents": 6897,
"total_amount_cents": 50000,
"human_readable_total": "KSh 500.00"
},
"tax_metadata": {
"jurisdiction": "KE",
"tax_name": "Kenya Electronic Services VAT",
"rate_percent": 16.0,
"tax_included_in_price": true
}
}
This ensures that at the end of every month, your accounting team can export clean CSV reports detailing exact taxable amounts versus gross revenue per jurisdiction.
Best Practices for Cross-Border Tax Compliance
- Tax-Inclusive Pricing in Africa: In Nigeria, Kenya, and South Africa, consumer regulations require B2C subscription prices to be displayed tax-inclusive (e.g., KSh 500 total, rather than KSh 431 + KSh 69 tax).
- Collect Country Identifiers: Always collect billing country or rely on SolydFlow's Geo-IP resolution to establish tax residency evidence.
- Use a Merchant of Record for EU/US: If your software business is incorporated in Africa and you begin doing substantial volume in the US or Europe, consider using a Merchant of Record (Paddle / Dodo) to automate cross-border VAT filings.