Selling digital products internationally means dealing with a patchwork of tax regulations. The EU requires VAT collection and remittance in each member state. The UK has its own VAT rules post-Brexit. India, Australia, Canada, and dozens of other countries have GST or sales tax requirements. Most indie makers either ignore these obligations (risky) or use complex setups with multiple tax tools (expensive and time-consuming).
Lemon Squeezy's merchant-of-record model handles all of this. When a customer in Germany buys your product, Lemon Squeezy calculates the correct VAT rate, adds it to the price or includes it depending on your settings, collects payment, generates a compliant invoice, and remits the tax to German authorities. You receive your revenue minus the tax and Lemon Squeezy's fee. No tax registration required, no filing deadlines to track, no compliance audits to worry about.
The new tax engine expands coverage from 40 countries to over 130, including regions in Southeast Asia, Latin America, and Africa that were previously unsupported. Tax ID validation ensures that B2B transactions in the EU correctly apply the reverse charge mechanism. For founders selling SaaS or digital products globally, this is arguably the strongest reason to choose Lemon Squeezy over Stripe (where you handle tax compliance yourself) or Paddle (which offers similar merchant-of-record benefits but with higher fees for small volumes).
If tax compliance is holding you back from selling internationally, Lemon Squeezy handles it entirely as your merchant of record.
