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.
| Area | Stripe + DIY Tax | MoR PSP | XborderCo |
|---|---|---|---|
| VAT liability | You are responsible, including audits, interest and fines. | PSP responsible. | XborderCo responsible. |
| Stripe control | You have full control, but you must wire together Tax, Billing, invoicing rev rec, etc. | Checkout and payout layers are replaced with the MoR PSP stack. | You have full control: Stripe Checkout, Billing, and payouts remain untouched. |
| Compliance scope | Register + file for OSS, IOSS, UK VAT, etc etc and e-invoicing in-house. Quarterly / bi-monthly filings and multi-currency settlement. Fines, interest and audit responsibility. | PSP responsible | XborderCo responsible |
| Reverse charge evidence | Collect and validate VAT numbers yourself. | PSP responsible | XborderCo responsible |
| Revenue impact | Stripe fees, but you fund compliance hires/software and tax operations and provisioning. | 5–15% revenue share plus FX and payout delays. Fee for transactions in *all* countries, even those you are already registered for tax in. | Simple 1%-2% fee. Only in those countries you have enabled. |
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.
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