Payment & Taxes
Short version: Polar is free to use. When you're making money through Polar, through subscriptions or issue funding, we take a 5% commision (after payment fees).
Polar uses Stripe for all payments. Whether you're pledging to fund an issue or subscribing to an open source maintainer. Stripe is a leading payment provider and they securely process and store - in case of subscriptions - your credit card details or other payment methods.
Currently, we support payments to be made in USD only and using the following payment methods:
- Credit/debit cards
- Apple Pay
- Google Pay
You get a receipt from Polar via Stripe for each transaction made.
You can subscribe to maintainers to gain access to additional benefits they offer as part of the selected subscription tier.
By subscribing, you pay the monthly subscription cost and any applicable taxes (see Taxes below) directly and recurringly each month thereafter. Billing is therefore done individually per subscription vs. once in case of multiple subscriptions.
You can find all of your active subscriptions & unsubscribe at any time in your settings.
Taxes (VAT, Sales Tax, etc)
Subscriptions can be or become subject to value-add taxes, e.g Sales Tax, VAT etc, depending on the benefits offered and your location - also determening the amount (%) owed.
In case value-add taxes apply today, it will be specified clearly at the point of subscribing - both the percentage applied and amount.
In the event taxes apply in the future or apply differently, we will communicate such changes in advance to you over email before the next billing cycle and you can decide whether you want to continue subscribing at the updated cost or unsubscribe in your settings.
Of course, we support business subscriptions as well. You can provide your local business registration number at the point of subscribing. It will then be validated, reflected on the receipt and impact the value-add tax applied. This includes not adding the value-add tax in case of the reverse charge mechanism being applicable.
Fees & Payouts (Maintainers)
Polar has no fixed, monthly, fees. We take a 5% commission once transfers are made for successfully funded & completed issues and monthly subscriptions.
Stripe transaction- and payout fees apply before transfers. We're covering this up until March 31st, 2024.
See Receive Funding as part of our maintainer guides.
Polar is building a platform to empower open source maintainers to offer value-add content, services and subscriptions to their backers. Going beyond donations and creating more powerful & beneficial opportunities within the open source ecosystem.
However, such value-add services are often subject to international taxation. Calculating, capturing and remitting them to separate governmental agencies is an impossible overhead and ask from individual maintainers. Polar is therefore proud to be the merchant of record and manage value-add taxes for subscriptions offered by maintainers.
How it works (Example)
- A backer from Sweden wants to subscribe to your $10/month tier.
- You've setup the $10/month tier to include premium posts (tax applicable) & other custom benefits. Given the choice of benefits and their tax settings, Polar recognizes the tier is subject to taxation.
- Backer goes to checkout. Automatically, 25% (Swedish VAT) is applied & shown. They see that the subscription is $10 and $2.5 VAT (25%), i.e $12.5 total per month.
- Once they subscribe, payments are made to Polar first. We capture the $2.5 VAT, deduct Polar & Stripe fees and transfer the rest directly to your connected Stripe account (setup in Polar dashboard).
- Polar then declares & remits all VAT in accordance with EU VAT legislation via our Irish OSS VAT registration. We deal with the quarterly reporting, declaration & remittances as the merchant on record.
You are still in charge of personal income tax filings and witholdings of the money you receive from Polar. Polar will only capture, report and remit value-add taxes. Please check with your local authorities or tax professionals for any local filing requirements you may have personally as a creator.
International taxes is a complex and evolving topic. Polar works with tax professionals & lawyers and our best efforts to stay up-to-date, but will continuously need to adapt the below based on evolving legislation, surpassing local thresholds (see Registrations below), and benefits offered.
In case we surpass local value-add tax thresholds in certain markets we're not registered in yet (see Polar Registrations you already have subscribers in, we will notify you & the backer ahead of the upcoming billing cycle. The backer would need to opt-in to the increased monthly cost - increasing chances of churn. We will therefore also offer you the chance to opt-in for Polar to deduct the necessary taxes from impacted subscriptions instead if you'd prefer. Of course, new subscriptions would automatically have the taxes applied at the point of subscribing.
Currently, Polar has the following registrations:
- US (Delaware). Polar Software Inc. is incorporated here.
- EU VAT (Ireland OSS VAT)
- UK VAT. Registration in progress
Many states and countries only require value-add taxation after a certain threshold. Polar does not apply value-add taxes until such thresholds are reached and will continue to monitor, expand and register for local taxation based on their legislations to the best of our abilities.
Note: Each registration comes at both an upfront and ongoing cost. Polar does not guarantee to support all countries short-term and will focus expansion on markets with the most demand and potential for maintainers.