An EU-based SaaS company usually needs a merchant of record less than a US one does. Sales to businesses in other EU countries are reverse-charged, and cross-border consumer sales under €10,000 a year can stay on home-country VAT. A merchant of record (MoR) starts to pay off once you sell to consumers in many countries, cross US sales-tax thresholds, or don't want to run OSS returns and US filings yourself.
The short answer
If most of your revenue comes from businesses in other EU countries, a merchant of record does little for your tax workload. You already file a VAT return at home, and those sales go on it as reverse-charge supplies with no VAT charged. If you sell to consumers across the EU, the UK and the US, an MoR replaces a stack of registrations and returns with one contract.
Most MoR guides are written for US founders, and the rules for an EU-established company are different. Without an MoR, here is what each kind of sale asks of you:
Customer | EU-established SaaS (GmbH, SAS, B.V., OÜ) | US-established SaaS |
|---|---|---|
Business in another EU country | No VAT charged. The customer accounts for it under the reverse charge | Same |
Business in your own country | Your home VAT, on the return you already file | No home EU country, so the first row applies |
EU consumers, cross-border sales under €10,000 a year | Your home VAT rate, on the return you already file | VAT at each customer's rate from the first sale, through non-Union OSS |
EU consumers, cross-border sales over €10,000 a year | VAT at each customer's rate, through Union OSS in your home country | Same as the row above |
UK consumers | UK VAT registration from the first sale | Same |
UK businesses | Reverse charge (until 31 March 2027 for every UK business customer) | Same |
US customers | Sales tax only in states where you cross an economic nexus threshold, usually $100,000 in sales | Your home state, plus every state where you cross a threshold |
Switzerland, Norway, Australia, Japan, Canada | Local registration once you pass each country's threshold for foreign sellers | Same |
For an EU company, the first three rows need no new registration. The work starts with the UK, the US, other countries, and EU consumer sales above €10,000. That is the part an MoR takes over.
The €10,000 rule, stated correctly
If your company is established in only one EU country, your cross-border sales of electronic services to consumers in other EU countries are taxed at home until they pass €10,000 a year. The threshold comes from Article 59c of the VAT Directive, and Irish Revenue's guide sets out the conditions:
You are established in one Member State only.
The €10,000 is one total for all other EU countries combined, not a limit per country. It also includes any intra-EU distance sales of goods.
It counts sales to consumers only. B2B sales and sales to consumers in your own country don't count.
It is measured excluding VAT, and it must hold for both the current and the preceding calendar year.
Once you pass it, VAT is due at each customer's local rate. Take a Berlin GmbH whose cross-border consumer sales were €6,000 in 2026. It charges German 19% to a consumer in Lyon. If its 2027 sales cross €10,000 in August, it charges French 20% from then on. In 2028 it charges destination VAT from the first sale, because 2027 was over the line.
You don't have to register in each country. The Union One-Stop Shop (OSS) lets you declare all EU consumer VAT in one quarterly return, filed with your own tax office. You can also opt into destination VAT before you reach €10,000. Our OSS registration guide walks through the setup.
The threshold doesn't exist for companies outside the EU. A US or Swiss seller owes VAT at the customer's rate on the first sale to an EU consumer, through the non-Union OSS, which it can join in any Member State (European Commission OSS page). Advice written for those sellers, such as "you owe EU VAT from the first euro", is wrong for you until you cross €10,000.
B2B within the EU: the reverse charge already does the work
When you sell SaaS to a VAT-registered business in another EU country, you charge no VAT. The customer accounts for it in their own return under Article 196 of the VAT Directive. Your side of it is short:
Check the customer's VAT number in VIES before you treat the sale as B2B.
Issue an invoice showing your VAT number, the customer's VAT number and the words "Reverse charge" (Article 226).
Report the sale on your home VAT return and on your EC Sales List (the Zusammenfassende Meldung in Germany).
Sales to businesses in your own country carry your normal home VAT. Both kinds of sale go on returns you file anyway. Our reverse charge guide covers the wording and edge cases, and the VAT-number invoice guide shows what a compliant invoice looks like.
A mostly-B2B EU company therefore gets little tax value from an MoR. An MoR also doesn't take you out of your home VAT return. When we act as your merchant of record, every sale is legally a sale from you to tiun AG, a Swiss company, and then from us to your customer (MSA §4.4). You still report that supply to us at home. Each monthly payout comes with a credit note that forms the basis of the payout (MSA §7.4), and our fees are charged without VAT, so a seller outside Switzerland reverse-charges them (MSA §7.8). Ask your adviser how to book the credit note.
The MoR still takes some work off B2B sellers. We check the buyer's VAT ID at checkout, apply the reverse charge when the conditions are met, and issue the invoice, so nobody on your team does it by hand. If your finance setup already handles those, Stripe with Stripe Tax is a reasonable choice for a mostly-B2B EU business.
The case for an MoR beyond EU B2B
Each market outside the EU, and each consumer segment, adds filings an MoR can take over.
US sales tax
The US has no federal sales tax. Each state sets its own economic nexus threshold, most often $100,000 in sales a year; California and Texas use $500,000, and New York $500,000 plus more than 100 sales. Anrok counts 26 states that tax SaaS in some form in 2026. California starts taxing SaaS on 1 January 2027 (PwC on SB 122), and Colorado's new software law takes effect the same day. Our US sales tax guide for European SaaS covers the state-by-state detail.
We sell to US consumers as merchant of record, so we collect and remit their sales tax wherever we're registered. We don't currently serve businesses in the United States (Terms of Sale, Annex C.1). If your US customers are companies, that revenue stays on your own billing and your own nexus tracking.
UK VAT
The UK isn't covered by OSS. A business based outside the UK must register for UK VAT as soon as it makes a taxable sale to a UK consumer, whatever its turnover (GOV.UK). B2B sellers are about to be pulled in as well. From 1 April 2027, the UK reverse charge applies only when the UK business customer is VAT-registered; for unregistered UK businesses, the overseas supplier charges UK VAT itself (HMRC impact note). A B2B SaaS with unregistered UK business customers will need its own UK registration after that date, unless an MoR is the seller.
Other digital-tax countries
Switzerland, Norway, Australia, Japan and Canada each require foreign sellers of digital services to register once they pass a local threshold, and each has its own return. One or two of these are manageable in-house; each extra country adds its own registration and filing calendar.
Disputes, invoices and consumer rules
As merchant of record, we are the party a chargeback is filed against, and we run the defence. The disputed amount and the dispute fee still come out of your payouts if it is lost (MSA §9.2). We also issue every invoice and handle the EU and UK 14-day withdrawal right, including the checkout consent that ends it for digital content.
A lean finance function
We collect and remit tax wherever we have a registration obligation, and we register in new places as thresholds are crossed (MSA §8.1). If we later register because of sales you made through us below a threshold, the back-tax is ours (MSA §8.3). Income and corporate tax stay with you (MSA §8.4). For a team without a finance hire, that is the main trade: one monthly payout and credit note in place of OSS, UK, US and other foreign returns. Your home VAT return stays.
Trade-offs that weigh more in Europe
Payment methods
European buyers expect local methods: SEPA Direct Debit for recurring B2B billing, iDEAL in the Netherlands, Bancontact in Belgium. Check what each MoR supports for subscriptions specifically. Paddle, for example, lists iDEAL and Bancontact for one-time payments only (Paddle help). Stripe direct charges €0.35 per SEPA Direct Debit (Stripe pricing, Ireland).
We currently accept Visa, Mastercard, American Express, Apple Pay, Google Pay, PayPal and TWINT. We don't offer SEPA Direct Debit, iDEAL or Bancontact today. Our guides to European payment methods and SEPA Direct Debit cover what each method costs to run yourself.
Invoice and bank-transfer billing
Every sale we make runs through our checkout. We don't currently support enterprise invoicing paid by bank transfer, so a customer that buys on a purchase order with 30-day terms can't pay that way through us. Accounts like that stay on your own billing.
Data protection
We process personal data primarily in Switzerland and the EEA (DPA §8.1). You and we are independent controllers, so we are not your processor, and your privacy notice names us as merchant of record (DPA §2.2–2.3, §5.2). tiun AG is a Swiss company under Swiss law, not an EU company.
A foreign seller on your customers' invoices
With an MoR, your customer buys from the MoR. With us, that means a German customer's invoice comes from tiun AG in Zürich, with the reverse-charge note, instead of from your GmbH with 19% German VAT. A German business with full input-VAT deduction accounts for the VAT under §13b UStG and deducts it in the same return, so its net cost doesn't change. Its procurement team still has to set up tiun AG as the supplier, so expect a question about why a Swiss company is invoicing for your product.
Country coverage
Check which buyer countries an MoR covers before you move EU sales to it. Our buyer list currently excludes Cyprus, Estonia and Slovenia.
ViDA: the changes from 2027 to 2030
The EU's VAT in the Digital Age package (Directive (EU) 2025/516) changes some of the rules above in stages. None of it makes an MoR mandatory for SaaS.
From | Change | Effect on an EU SaaS seller |
|---|---|---|
1 January 2027 | Minor OSS clarifications | Little. Your OSS return works as before |
1 July 2028 | OSS extended (single VAT registration); the Article 194 reverse charge becomes mandatory when a supplier isn't established or VAT-registered in the country where VAT is due and the business customer is registered there | Fewer foreign registrations for B2B supplies taxed locally. Cross-border B2B SaaS already uses the Article 196 reverse charge, so little changes |
1 July 2028 | Platforms become the deemed supplier for short-term accommodation and passenger transport (countries can delay to 2030) | None for SaaS |
1 July 2030 | E-invoicing becomes the default; cross-border B2B sales are reported digitally, based on e-invoices | Your intra-EU B2B invoices must be structured e-invoices reported to the tax authorities |
The 2030 change is the one to plan for. If you bill EU businesses yourself, your invoicing tool has to produce compliant e-invoices and feed the reporting. If an MoR bills them, the MoR issues those invoices. Our ViDA guide has the detail.
Decision table by revenue mix
Your revenue mix | Tax work without an MoR | Our recommendation |
|---|---|---|
Mostly EU businesses, few consumers | Home VAT return and EC Sales List, both filed already. UK registration may follow from April 2027 | Stripe with Stripe Tax is likely enough. An MoR mainly buys you VAT-ID checks, invoicing and dispute handling |
Mix of EU businesses and EU or UK consumers | Union OSS above €10,000, UK VAT from the first consumer sale | An MoR starts to pay off, mostly through UK registration and consumer-law handling |
Mostly consumers in many countries | Union OSS, UK VAT, other national registrations, US states as thresholds pass | An MoR is the simpler setup. This is the profile we're built for |
Growing US revenue from consumers | State registrations as thresholds pass, more states from 2027 | An MoR takes on US sales tax for those sales |
Growing US revenue from businesses | The same state registrations | We don't serve US businesses today. Keep that revenue on your own billing with a sales-tax tool, or pick an MoR that serves US B2B |
On price, Stripe charges an Irish-account seller 1.5% to 2.8% + €0.25 for EEA cards, plus 0.7% for Billing and up to 0.5% for Stripe Tax (Stripe pricing). We charge 2.9% + $0.30, plus 0.5% on subscriptions, with international cards, currency conversion and tax handling included, and a 1.5% fee on each payout (tiun pricing). For EU card payments from EU businesses, Stripe costs less. The gap narrows once you price in OSS, UK and US filings, or a person to run them.
FAQ
Does the €10,000 threshold include B2B sales?
No. It counts only sales of electronic services to consumers in other EU countries, plus any intra-EU distance sales of goods. Sales to businesses and to consumers in your own country are left out.
Can I use OSS for UK customers?
No. The UK left the EU VAT system, so OSS doesn't cover it. Sales to UK consumers need a UK VAT registration with HMRC from the first sale.
Do I need an MoR to sell to US customers?
No. You can track each state's threshold and register yourself when you cross it. An MoR saves you that work for the sales it covers. We cover US consumers; US business customers stay on your own billing.
Will an MoR invoice confuse German procurement?
The invoice is valid: we issue it in our name, it can show your company and product name, and the reverse-charge note for a VAT-registered business. The customer has to set up tiun AG as a supplier and book the VAT under §13b UStG. Tell your customers before the first invoice arrives.
Does ViDA make MoRs mandatory?
No. The deemed-supplier rule from July 2028 covers short-term accommodation and passenger transport platforms only. SaaS sellers can keep selling directly.