FinTech
The "Merchant of Record" Tax Explained
Feb 22, 2026 8 min read
Stripe is the standard. But Stripe is not a Merchant of Record (MoR). This means YOU are liable for calculating, collecting, and remitting VAT/Sales Tax in 100+ countries.
LemonSqueezy (and Paddle) charges a higher fee (5% + 50¢ vs Stripe's 2.9% + 30¢), but they handle 100% of the tax compliance. Is it worth losing 2% of your revenue?
Vertex Summary (TL;DR)
- The Verdict: If you sell globally (SaaS), use LemonSqueezy. The $2,000/year you "lose" in fees saves you $10,000/year in accountant fees.
- Stripe Tax: Stripe has a "Tax" product, but it only calculates the tax. You still have to register in the EU, UK, etc., to remit it.
The Math: $10k MRR Example
Stripe
Fees: ~$320
Tax Software: +$100
Accountant: +$300
Total Cost: ~$720/mo
LemonSqueezy
Fees: ~$550
Tax Software: $0
Accountant: $0
Total Cost: ~$550/mo
For a solo founder, LemonSqueezy is actually cheaper when you factor in the value of your time and sanity.
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