What's the Difference Between B2B SaaS and Software B2B?
This article compares Software B2B and B2B SaaS so you can confirm which category your product falls under and ensure it's taxed correctly.Updated last month
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Software B2B and B2B Saas are two categories that describe different delivery models, and getting the categorization right matters for accurate tax treatment. Here’s an overview of why they are categorized differently.
B2B SaaS vs Software B2B
Category | Definition |
|---|---|
B2B SaaS | Software hosted by the vendor and accessed remotely by the business over a network, on a subscription or cloud basis. No copy of the program is delivered to the customer (e.g., a cloud platform the customer logs into). |
Software B2B | A licensed software product the business obtains and uses, delivered either by download or on physical media (e.g., a licensed CRM, accounting, or analytics program). |
Bottom line: if the customer never receives a copy of the software and only accesses it remotely, it's B2B SaaS. If the customer downloads or receives a licensed copy of the software, it's Software B2B. Confirm the delivery model with the client before finalizing the category, since this distinction drives how the product is taxed.
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