Buying guide
Stripe + DIY Tax vs MoR PSPs vs XborderCo.
Digital VAT compliance comes down to who holds liability & responsibility. How you configure your platform and partners has different outcomes that impact all parts of your business. This table surfaces the impact of a DIY approach, using XborderCo or using a Merchant of Record PSP.
| Feature | Stripe + DIY Tax | XborderCo | Merchant of Record |
|---|---|---|---|
| Global Tax Liability | |||
| VAT liable | You You are responsible, including audits, interest and fines. | XborderCo XborderCo responsible for VAT liability in enabled jurisdictions. | MoR PSP responsible for VAT liability. |
| Compliance burden | You Register + file for OSS, IOSS, UK VAT, etc. Quarterly filings, multi-currency settlement, audit responsibility. | XborderCo XborderCo handles all compliance in enabled jurisdictions. | MoR PSP responsible for compliance. |
| Reverse charge evidence | You Collect and validate VAT numbers yourself. | XborderCo XborderCo responsible for VAT number validation and reverse charge compliance. | MoR PSP responsible for VAT number validation. |
| Payments & Ownership | Your Stripe account | ||
| Owns the customer | You Full control of customer relationships. | You Your customers stay yours. | MoR MoR owns the customer relationship. |
| Owns the subscription | You Full control of subscriptions. | You Your subscriptions stay on your Stripe account. | MoR MoR manages subscriptions. |
| Checkout | Stripe Your Stripe Checkout experience. | Stripe Keep your Stripe Checkout exactly as-is. | MoR-branded Replaced with MoR-branded checkout. |
| Invoicing | Stripe Stripe invoicing, but you handle tax compliance. | Stripe Stripe invoicing with XborderCo VAT IDs. | MoR MoR handles all invoicing. |
| Name on customer statement | You Your brand on customer statements. | You Your brand on customer statements. | MoR MoR name appears on statements. |
| Fees | Stripe fees (+ Tax compliance fees) | 1–2% (+ Stripe payments fees) | 5%–15% (+ 50c per transaction) |
VAT liable
You are responsible, including audits, interest and fines.
XborderCo responsible for VAT liability in enabled jurisdictions.
PSP responsible for VAT liability.
Compliance burden
Register + file for OSS, IOSS, UK VAT, etc. Quarterly filings, multi-currency settlement, audit responsibility.
XborderCo handles all compliance in enabled jurisdictions.
PSP responsible for compliance.
Reverse charge evidence
Collect and validate VAT numbers yourself.
XborderCo responsible for VAT number validation and reverse charge compliance.
PSP responsible for VAT number validation.
Owns the customer
Full control of customer relationships.
Your customers stay yours.
MoR owns the customer relationship.
Owns the subscription
Full control of subscriptions.
Your subscriptions stay on your Stripe account.
MoR manages subscriptions.
Checkout
Your Stripe Checkout experience.
Keep your Stripe Checkout exactly as-is.
Replaced with MoR-branded checkout.
Invoicing
Stripe invoicing, but you handle tax compliance.
Stripe invoicing with XborderCo VAT IDs.
MoR handles all invoicing.
Name on customer statement
Your brand on customer statements.
Your brand on customer statements.
MoR name appears on statements.
Fees
(+ Tax compliance fees)
(+ Stripe payments fees)
(+ 50c per transaction)
When DIY makes sense
Great for domestic sales (where you already have a VAT registration). Also good for smaller or slow growing digital businesses with limited/focused market or where market growth can be moderated so compliance can keep pace with growth.
- Finance team who can devote resources to handling multiple tax authorities.
- Good finance - engineering coordination ensuring data retention and systems properly coordinated to manage and maintain multi-jurisdictional compliance.
- Internal multi-disciplinary bandwidth available to dedicate to compliance over the long term. Across Leadership, Finance, Tax, Ops and Engineering.
When XborderCo wins
You want the liability benefits of an MoR without the business model, ownership, control or high cost trade-offs. We plug into your existing Stripe account and only assume liability for eligible digital goods.
- You want the benefits of a MoR however you do not want to lose control of your customer relationships and you have existing subscriptions you do not want to move from Stripe.
- Winning enterprise deals requires issuing compliant invoices.
- Rapid growth with limited team resources means that staying compliant in all the countries you have customers is difficult. You want to avoid nasty surprises.
When MoR PSP makes sense
You're starting from scratch and don't have existing Stripe infrastructure or customer subscriptions to preserve.
- You have simple, fixed pricing subscriptions and don't need usage-based billing or metered subscriptions.
- You're comfortable with the MoR appearing on customer statements and managing the payout schedule.
- The 5-15% revenue share is acceptable given your margins and you prefer predictable costs over optimizing for lower fees at scale.
The outsourcing question
Should you outsource VAT compliance?
Geoffrey Moore's Core vs Context framework helps decide what to build versus outsource. The answer depends on whether an activity is core to your business or context.
Core
Activities that create competitive differentiation. This is what wins customers and drives growth.
Context
Activities necessary to operate but that do not differentiate you. Think payroll, IT support, compliance.
Why VAT compliance is context, not core
- It is mandatory - VAT obligations exist whether you want them or not.
- It does not win customers - no one chooses your product for excellent VAT filings.
- Getting it wrong hurts, but getting it right is simply expected.
- It consumes resources that could go toward growth.
When activities become context, outsource them to specialists where that activity is their core. XborderCo exists to make VAT compliance our core so it doesn't have to be yours.
Ready to explore how you can keep Stripe and drop the VAT liability?
Book a call with our team to see how XborderCo fits your setup.