Inside DAC7: The EU’s Newest Tax Directive & Its Implementation Status [March 2023]
The EU’s newest tax directive, DAC7, which applies as of 1 January 2023, imposes new obligations on online marketplaces that have sellers based in the EU.
SUCCESS STORY
STORETASKER
Trolley enables Storetasker to work with developers in 200+ countries
~100%
global coverage for paying out freelance devs
0
spreadsheets required to complete end-of-year taxes
<6 hour
turnaround on service calls and support issues
STORETASKER
Company Info
Website
Industry
On-demand freelancers
HQ Location
New York, NY, US
Customer Since
2019
Recipients
Freelance web developers
Payout Countries
Global
Storetasker is a two-sided marketplace that connects freelancers and Shopify merchants. They have helped more than 25,000 Shopify merchants find a certified Shopify developer to design, build, and fix their ecommerce storefronts.
Storetasker was handling hundreds of individual payouts a month to freelancers all over the world, but their previous payout provider only supported 30 or so payout countries. And collecting W-9 tax forms and preparing 1099s and 1042-S forms every year was a constant source of anxiety. Then Sam found Trolley.
The Challenge
When Storetasker first launched, they used Stripe as their credit card billing gateway. As Storetasker grew, however, they struggled with Stripe Connect as a platform for global payouts.
Storetasker ran into 3 key problems with Stripe Connect: 1. There was limited global payouts coverage 2. The billing, escrow and payouts system was a bad experience for both merchants and freelancer 3. They had very limited tax info collection and filing tools.
Storetasker ran into 3 key problems with Stripe Connect: 1. There was limited global payouts coverage 2. The billing, escrow and payouts system was a bad experience for both merchants and freelancer 3. They had very limited tax info collection and filing tools.
Trolley is a must-have if you're building a two-sided marketplace.
Every other marketplace founder I talk to, I recommend Trolley to them. It's the only one in its class.
— Sam Wilcoxon, CEO of Storetasker
The Solution
Sam had a post-it note on his desk for 3 or 4 months that just said, ‘Find a better payments system than Stripe Connect’ before he found Trolley.
“One of the big draws for us was definitely that we could grow our currency support from 15% of the world’s currencies to nearly 100% of them with one payouts provider.”
“When you’re competing against Upwork and Fiverr, you’ve got to be better than the incumbents at every place you can be. I can now pay freelancers in every country of the world, and get the money to their local bank in their local currency in a couple of days for a couple of bucks. Show me another platform that can do that! This reduces our customer support queries and keeps our freelancers part of Storetasker longer because our payouts process is just better than the other players.”
By implementing Trolley payouts API, Storetasker was able to create the escrow and payouts function they wanted, and integrate milestone payouts directly into their application, all in a matter of days.
“One of the big draws for us was definitely that we could grow our currency support from 15% of the world’s currencies to nearly 100% of them with one payouts provider.”
“When you’re competing against Upwork and Fiverr, you’ve got to be better than the incumbents at every place you can be. I can now pay freelancers in every country of the world, and get the money to their local bank in their local currency in a couple of days for a couple of bucks. Show me another platform that can do that! This reduces our customer support queries and keeps our freelancers part of Storetasker longer because our payouts process is just better than the other players.”
By implementing Trolley payouts API, Storetasker was able to create the escrow and payouts function they wanted, and integrate milestone payouts directly into their application, all in a matter of days.
Stripe for billing and Trolley for payouts is the perfect marketplace financial tech stack. There’s not a thing I would change about our current setup.
The Results
Not only did Trolley automatically collect all payee W-9 or W-8BEN tax information before they send recipients their payouts, but all the 1099 and 1042-S end-of-year tax statements and filings are also handled in Trolley’ Tax Center. No more messing about sending spreadsheets to their accountants or Track1099, it's now done with just a few clicks in the Trolley Dashboard.
Now, with more than 10,000 transactions powered by Trolley, Storetasker’s CEO and technology team remain super impressed with the ease of use and capabilities of the Trolley platform.
Now, with more than 10,000 transactions powered by Trolley, Storetasker’s CEO and technology team remain super impressed with the ease of use and capabilities of the Trolley platform.
I don’t think we waited more than 6 hours on any email we sent to the Trolley team ever. The quality and speed of support are unlike any other financial system provider we’ve worked with.
