← Creator Platform Fee Comparator
Sell a $20 PDF to someone in Germany and, technically, someone owes German VAT on that sale. Sell to Texas, and someone may owe Texas sales tax. The merchant of record (MoR) question is simply: who is that someone — you, or the platform?
With a merchant of record platform (Lemon Squeezy, Gumroad, Paddle), the platform is legally the seller. Your customer buys from them; they collect the right tax for the buyer's country, file it, and pay you your share. The receipt says their name. You've effectively outsourced international tax compliance for a percentage.
With a payment-tool platform (Ko-fi, or Stripe used directly), you are the seller. The platform moves money; the tax obligations — registering for EU VAT via One Stop Shop, tracking US state thresholds, filing — are yours. Many small sellers handle this by, to put it kindly, not handling it. That works until it doesn't.
Some platforms sit in between: Payhip collects and remits UK and EU VAT on digital sales but leaves US sales tax to you — a genuinely useful half-way house for UK sellers whose buyers are mostly domestic and European.
This is why naive fee comparison misleads. Lemon Squeezy's 5% + $0.50 includes payment processing and full global tax handling; Ko-fi Gold's 0% + Stripe's 2.9% + $0.30 includes neither tax handling nor anyone to ask about it. The fair comparison is: fee difference per month vs what tax compliance costs you — in accountant fees, software, or risk you're quietly carrying. For a seller doing $1,000/month with plenty of international buyers, a $19–30/month premium for full MoR is often the cheapest professional service they'll ever buy. For a UK seller with 95% UK buyers under the VAT threshold, it may buy nothing at all.
Where are your buyers (mostly domestic → MoR matters less; global → more)? Are you VAT-registered already (if yes, you have processes; if no, EU digital sales create obligations with no minimum threshold)? And how big are you (bigger = more worth doing properly = either MoR or an accountant)? There's no universal answer — but there is a correct answer for your numbers, and it's rarely the one the headline fee suggests.
Verified August 2026. This is general information, not tax advice — tax obligations depend on your circumstances; talk to an accountant about yours. Not affiliated with any platform mentioned.