When you switch to a merchant of record (MoR), VAT and sales tax on the sales the MoR makes become the MoR's obligation from the switch date, wherever the MoR collects tax. Everything before that date stays with you, and so do your income tax and any sales you still make yourself. You file final returns for earlier periods, close each registration once your own sales in that place have stopped, and account correctly for your own supply to the MoR.
This guide assumes you collect tax today with Stripe and Stripe Tax, hold an EU OSS registration, a UK VAT registration and a few US state permits, and plan to move every new sale to an MoR. It is a general explanation, not tax or legal advice.
Shifts to the MoR, stays with you
Item | Shifts to the MoR from the switch date | Stays with you |
|---|---|---|
VAT, GST and sales tax | Calculating, collecting and remitting tax on every sale the MoR makes, where it is registered | Tax on sales outside the MoR: renewals still charged on Stripe, invoices you issue yourself |
Invoices | Tax invoices and receipts to buyers | The invoice or credit note that documents your supply to the MoR |
Returns | Returns for the MoR's sales | Final returns for every period up to your last direct sale, and corrections to them |
Audits | Audits of the MoR's sales | Audits of your own periods |
Registrations | The MoR's own registrations | Closing yours once your direct sales there have stopped, or keeping them for sales you still make |
Income and corporate tax | Nothing | All of it |
The legal basis for the switch
In the EU, the MoR is the supplier to the buyer. Article 28 of the VAT Directive treats a business that takes part in a supply of services in its own name, on someone else's behalf, as if it had received and supplied the service itself. Article 9a of Implementing Regulation 282/2011 applies this to electronically supplied services sold through a portal or platform: the platform is presumed to act in its own name, and it cannot name someone else as the supplier if it authorises the charge to the customer, authorises delivery or sets the general terms and conditions. Any one of the three is enough.
The Court of Justice upheld Article 9a in Fenix International (C-695/20) on 28 February 2023. An MoR checkout authorises the charge and sets the terms, so the MoR charges VAT to the buyer and you make a business-to-business supply to the MoR.
In the US, an MoR is the retailer. It sells to the customer in its own name, under its own terms, and collects sales tax as the seller in states where it has nexus. Marketplace facilitator laws work differently: a state statute makes the platform responsible for collecting tax on sales that third-party sellers make through it.
Pick a switch date and an exit date
You need two dates. From the switch date, every new sale runs through the MoR. On the exit date, you leave OSS and stop selling directly to EU consumers. The two dates can be the same day only if no EU consumer can still be charged on your own Stripe account on or after it, and no UK consumer either if you are cancelling a UK registration.
Make the exit date the first day of a calendar quarter. OSS returns are quarterly and a voluntary exit takes effect only from a quarter start, so a quarter start gives you one clean final return. 1 January 2027 also works well as a switch date. California starts taxing SaaS that day and Colorado extends its sales tax to most standard software, and the tax on sales the MoR makes is the MoR's to handle. Tax on US business customers you still bill yourself, and on any Stripe renewal after that date, stays with you.
A 1 January 2027 exit sets hard deadlines:
16 December 2026: last day to notify your OSS Member State of identification.
31 December 2026: last day for any charge to an EU consumer on your Stripe account.
If that is too tight, keep 1 January as the switch date for new sales, move existing subscribers during the first quarter and leave OSS on 1 April 2027, with notice by 16 March 2027. Your final OSS return then covers Q1 2027. Renewals still charged on Stripe in that quarter are your sales everywhere, including any California or Colorado tax they attract.
Stop Stripe renewals before the exit date
The switch date only covers sales the MoR makes. A subscriber who signed up on Stripe and renews on Stripe is still your customer, and that renewal is your sale, with the tax that comes with it. If a French subscriber renews on Stripe in January after you have left OSS, you owe that VAT directly to France, which means a French VAT registration for a non-EU seller, or for an EU seller over the EUR 10,000 threshold. So the last Stripe charge to a customer in any place where you plan to deregister has to fall before the exit date.
To move a subscriber, cancel the Stripe subscription at the end of the period they have already paid for, and re-create it on the MoR, starting on the day the Stripe period ends. Stripe supports this with cancel at period end. The customer keeps access and is not charged twice.
Cancelling at period end doesn't stop every charge. Stripe still bills metered usage and pending prorations when the period ends, and it keeps retrying failed payments (Stripe). For EU and UK consumers, clear metered usage, delete pending invoice items, and collect or void any unpaid invoices before the exit date.
The same works for annual subscribers. You don't have to wait for their renewal or refund them early: turn off the Stripe renewal before the exit date, and the MoR charges them when their paid year runs out. Ask your MoR how to start a subscription on a future date, for example with a free trial that ends on the old renewal date.
If you would rather move an annual subscriber straight away with a prorated refund, make the refund before the exit date, so it goes in as a correction on your last OSS return. Refunds after the exit date may have to be settled directly with the tax authority of the customer's country.
Re-creating a subscription usually needs the customer. Stripe transfers card data only to another PCI DSS Level 1 processor, on request; it leaves out cards saved with Link and doesn't export subscriptions (Stripe). Unless your MoR accepts that card import, each subscriber enters payment details at the MoR checkout once. Email them early, because a subscriber who doesn't act won't renew.
Enterprise contracts you invoice directly stay yours, and so do the registrations that cover them.
EU: leaving OSS
The scheme you are in decides what you close.
Non-Union OSS is for sellers not established in the EU. You register in a Member State of your choice and owe EU VAT from your first sale to an EU consumer. The EUR 10,000 threshold applies only to sellers established in a single Member State (Article 59c of the VAT Directive). Once the MoR makes every EU consumer sale, the non-Union registration can close.
Union OSS is for sellers established in the EU, or with a fixed establishment there. You leave OSS, but your domestic VAT registration stays: you keep supplying the MoR and buying inputs.
To leave voluntarily, notify your Member State of identification electronically at least 15 days before the end of the quarter before the one in which you want to stop (Article 57g, Regulation 282/2011). The exit takes effect on the first day of the next quarter, so the last day to give notice for 1 January 2027 is 16 December 2026. Nothing stops you rejoining later (European Commission).
Give notice only once you are sure the last Stripe charge to an EU consumer falls before the exit date. After the exit, VAT on any sale you still make yourself to an EU consumer is due directly in that customer's country (Article 57g). If you miss the notice date and your direct EU consumer sales have already stopped, report that by the 10th day of the following month (Article 57h). You then stay in the scheme, filing nil returns, until the start of the quarter after your tax office decides to remove you (Article 58). If your sales haven't stopped, the next voluntary exit is a quarter later.
Your final OSS return covers the last quarter you used the scheme and goes to your Member State of identification as usual. For a 1 January 2027 exit, that is the Q4 2026 return, due by 31 January 2027. That day is a Sunday, and OSS deadlines don't move for weekends. Corrections after the final return, such as a refund of a December sale, are settled directly with the tax authority of the customer's country (Article 61a). Keep OSS records for 10 years from the end of the year of each sale, whether or not you still use the scheme (European Commission).
The VAT in the Digital Age package (ViDA) brings minor OSS clarifications from 1 January 2027. From 1 July 2028 it extends OSS to more types of supply and, separately, introduces a mandatory reverse charge for B2B supplies by suppliers not VAT-identified in the country where the VAT is due (Grant Thornton). Neither changes the exit steps above or how B2C SaaS sales are taxed.
UK: cancelling a non-UK VAT registration
A business with no UK establishment has to register for UK VAT, whatever its turnover, as soon as it makes a taxable supply in the UK, such as selling software to UK consumers. The £90,000 threshold does not apply to it (VAT Notice 700/1). Sales to UK business customers don't count, because the customer accounts for the VAT under the reverse charge. Until 31 March 2027, that applies whether or not the business is VAT-registered.
Once all your UK consumer sales run through the MoR, you sell only to the MoR and make no more UK taxable supplies. Paragraph 7 of Schedule 1A to the VAT Act 1994 requires you to tell HMRC within 30 days of the day you stop making, or stop intending to make, taxable supplies. You can cancel online or with form VAT7.
HMRC says it usually confirms within 40 working days, longer at busy times, and sets a cancellation date: normally the date you asked to cancel or the date your UK supplies stopped (GOV.UK). You then file a final return for the period up to that date and keep VAT records for 6 years.
Cancel once no UK consumer subscription can still be charged on Stripe. If a UK customer's last prepaid Stripe period runs past that point, ask your adviser which date to give HMRC. The £88,000 deregistration threshold doesn't help here: an overseas business can deregister only once it has completely stopped making UK taxable supplies.
If you keep selling directly to UK businesses, check one change before you cancel. From 1 April 2027, the reverse charge will apply only when the UK customer is VAT-registered; for an unregistered business customer, the overseas supplier has to charge UK VAT itself (HMRC, 28 October 2026). If any UK business you bill directly is not VAT-registered, you will need a UK registration again from that date. Sales the MoR makes aren't affected.
If you are established in the UK, the switch alone does not end your registration. Your sales to a non-UK MoR are generally outside the scope of UK VAT and don't count toward the £90,000 threshold, although services you buy from abroad under the reverse charge do. You can usually stay registered to reclaim input VAT, because those sales would be taxable if made in the UK. If the MoR is UK-based, your sales to it carry 20% UK VAT. Confirm the details with your adviser.
US: final returns and closing state permits
For each state permit, keep filing returns until the permit is closed, including zero returns where the state requires them. Colorado and Texas, for example, expect a return every period while the account is open. Once your last direct sale in the state has been reported, close the permit through the state's portal and mark the last return as final where the state asks for it.
Some states keep a remote seller registered for a while after its sales drop. Alaska's Remote Seller Sales Tax Commission, for example, keeps you registered until you have stayed under its threshold for both the current and the previous calendar year (ARSSTC). Check each state's closing rules before you stop filing.
Keep the permits that cover sales you still make directly: Stripe renewals that haven't moved yet, and customers you invoice yourself. tiun's Terms of Sale say it does not currently offer its services to businesses in the United States (Annex C.1), so sales to US companies stay on your own billing, along with the permits that cover them.
Check whether you had real exposure in the first place. Anrok counts 26 states that tax SaaS in some form in 2026 (Anrok). California adds SaaS from 1 January 2027 under SB 122, signed on 29 June 2026, with no general exemption for business buyers (PwC). On the same day, Colorado extends its state sales tax to most standard (prewritten) software, however it is delivered (HB 26-1223, signed 4 June 2026). How that applies to SaaS will depend on Colorado Department of Revenue guidance, and home-rule cities such as Denver already tax SaaS under their own rules. Plenty of founders hold permits in states that do not tax their product.
Thresholds have moved too. By our count of Sales Tax Institute's state table, about 25 states now use $100,000 in sales alone, which makes it the most common economic nexus test. States that have dropped the 200-transaction test since 2023 include South Dakota, Louisiana, Indiana, North Carolina, Wyoming, Utah, Illinois (1 January 2026) and Kentucky (1 August 2026), along with Alaska's commission. California and Texas use $500,000, and New York uses $500,000 and more than 100 sales. A permit you opened only because of the transaction count may no longer be needed, subject to the state's rules on how long you must stay registered. Our US sales tax guide covers the state rules in more detail.
The document for your supply to the MoR
After the switch, your customer for every MoR sale is the MoR, and your sale to it has its own VAT treatment. Some MoRs issue a self-billed document on your behalf; others expect an invoice from you. With tiun, each sale counts as a sale from you to tiun on the same terms as tiun's sale to the buyer (MSA §4.4). Each monthly payout comes with a credit note in the dashboard that forms the basis of the payout and breaks down transactions, fees and deductions (MSA §7.4). Ask your adviser whether that credit note can serve as your VAT invoice in your country or whether you also issue your own. Either way, the document has to reflect the VAT treatment that fits your setup.
Example A: a US company supplying tiun AG (Switzerland)
The credit note or invoice carries no VAT. The US has no VAT, and a sale to a Swiss reseller is a sale for resale rather than a US retail sale, so it generally isn't subject to US sales tax. Where you still hold US state permits, keep the resale documentation those states accept, usually a resale or exemption certificate. If you are not registered for Swiss VAT, tiun accounts for any Swiss VAT on its purchase itself (acquisition tax, Article 45 of the Swiss VAT Act). Show both legal names and addresses, the period and the amount.
Example B: a German GmbH supplying tiun AG (Switzerland)
This is a B2B service to a customer established in Switzerland, so the place of supply is Switzerland (Article 44 of the VAT Directive, §3a(2) UStG) and no German VAT is charged. A note such as "nicht im Inland steuerbare Leistung" is recommended, though not legally required. The GmbH reports the amount in its German VAT return as a non-taxable supply (Kennzahl 45) and leaves it out of the recapitulative statement (Zusammenfassende Meldung), which covers EU customers only.
Fees tiun charges the GmbH, such as dispute fees or add-on subscriptions, are a separate supply running the other way. They come without VAT (tiun MSA §7.8), and the GmbH self-accounts German VAT on them under the reverse charge (§13b(2) UStG, Kennzahlen 84 and 85), normally deducting the same amount as input VAT in the same return. The per-transaction, subscription and payout deductions are different: the MSA frames them as reductions of the price tiun pays (§7.1), so whether they lower the value of your supply or count as a fee you reverse-charge is a question for your adviser.
Example C: a German GmbH supplying an MoR established in Ireland
The place of supply is Ireland, and the Irish MoR accounts for the VAT under the reverse charge (Article 196). The invoice shows both VAT numbers and the words "Reverse charge" (Article 226), which German law phrases as "Steuerschuldnerschaft des Leistungsempfängers" (§14a UStG). The GmbH reports the supply in Kennzahl 21 of its German VAT return and lists it in its recapitulative statement. If the MoR were German, the GmbH would charge 19% German VAT instead.
B2B invoice requirements are covered in more depth in the SaaS VAT compliance guide.
Your books after the switch
For MoR sales, your customer is now the MoR. Whether you present the end-customer price or the amount the MoR pays you, and how you treat its fees, is a principal-versus-agent question under ASC 606 or IFRS 15. Your accountant answers it from your contract. Reconcile each payout to the MoR's statement (with tiun, the monthly credit note plus the per-transaction tax records in the dashboard, MSA §8.5), and keep your pre-switch Stripe data for final returns and any audit.
Back taxes stay yours
An MoR takes on tax for the sales it makes from the switch date. It does not take over under-collection from before. If you had nexus in a state that taxes SaaS and did not collect, or sold to EU consumers without registering, that exposure stays with you. In the US, a voluntary disclosure agreement is the usual way to settle it, as long as the state has not already contacted you about that tax (Multistate Tax Commission).
tiun's master services agreement spells out the limits. tiun is the legal seller for every transaction made through it (§4.1) and remits Sales Tax where it has determined it must register (§8.1). If sales made through tiun below a registration threshold later lead tiun to register somewhere, tiun takes on the back-tax assessment for those sales (§8.3). That never reaches sales you made before the switch. In jurisdictions it excludes, it either blocks the sale or the supplier carries the tax (§8.3). Income, corporate and payroll tax remain yours (§8.4).
Migrating from Stripe to tiun
tiun installs through your AI coding agent. Add the tiun skill with
npx skills add <https://mcp.tiun.business> and connect the MCP server in Cursor, Claude Code, Copilot or Codex, or install the@tiun/sdkpackage from npm yourself. From the switch date, tiun is the merchant of record for every sale through it. It collects and remits VAT, GST and sales tax where it is registered, and registers in new places as its thresholds are crossed (MSA §8.1). It does not currently sell to US businesses, so US B2B revenue stays on your own billing. For help moving existing Stripe subscribers, email support@tiun.io.
FAQ
Do I need to deregister from OSS?
Yes, once you have no direct sales to EU consumers left. Otherwise you keep filing nil returns every quarter. Notify your Member State of identification at least 15 days before the quarter ends; you leave from the first day of the next quarter and file a final return. Any direct sale to an EU consumer after that is taxed in the customer's country, outside OSS.
What about subscribers still billed on Stripe?
You are the seller of those renewals and owe the tax on them. Before your exit date, set each Stripe subscription to cancel at the end of its paid period, and set up the MoR subscription to start when that period ends. Keep the registrations that cover any renewal still charged on Stripe until it has been reported.
Do annual subscribers have to wait for their renewal?
No. Turn off the Stripe renewal before your exit date and start the MoR subscription on the day the paid year ends.
Who pays tax on refunds of pre-switch sales?
You do, because you made the original sale: you reduce the tax on a later return. Once your final OSS return is filed, corrections go directly to the tax authority of the customer's country.
Does the MoR take on my past liabilities?
No. It covers tax on the sales it makes from the switch date. With tiun, the exception is jurisdictions tiun explicitly excludes, where it blocks the sale or the tax stays with you (MSA §8.3). Under-collection before the switch date stays with you.
Do I still need a VAT number in my home country?
Often yes if you are established in an EU country or the UK, because you still supply the MoR and a registration lets you reclaim VAT on your costs. Whether you must keep it depends on what you still sell, so ask your adviser. A non-EU seller's non-Union OSS registration is separate and can close.
How do I book MoR payouts?
Treat the MoR as your customer, reconcile each payout to its statement, and have your accountant decide gross or net presentation under ASC 606 or IFRS 15.