We built Volta between April and June 2026, a subscription platform for creators selling
access to an audience, and retired it in August. Its database had a column called
payment_mode with three allowed values. Two of them were ever written. The third was mor,
for merchant of record, added early "so Phase 7+ avoids migration churn". Nothing in the
codebase ever set it. Creators in countries Stripe did not support, the people that mode was
planned for, got a form asking for their email so we could tell them when things changed.
That unused value marks the difference between two kinds of platform that look identical from the seller's side of the dashboard. On one kind, the platform is the seller and the tax is its problem. On the other, you are the seller and the tax is yours, whatever the checkout page says. Volta was the second kind, and our own planning notes said we should tell creators so. We never did.
The name on the statement is not the answer
A buyer who paid a creator through Volta saw Volta on their card statement, as a side effect of
how we set up payments. We charged cards as what Stripe calls destination charges and never set a
parameter named on_behalf_of, and Stripe's documentation is direct about the consequence: "If
on_behalf_of is omitted, the platform is the business of record for the payment." The same
setting decides "whose statement descriptor the customer sees."[1]
That does not make the platform the party that owes the tax. Stripe's own guide for platforms says responsibility for collecting and reporting tax "can belong to the platform or to connected accounts, depending on your business model, government regulations, and individual transaction details."[2] The card network cares about one question and the tax authority about another, and a platform can answer them differently.
We answered them differently. Our name was on the statement. The creator received the money into their own Stripe account, and nothing we built calculated, collected or filed a cent of tax. Our v0.1 spec carried a risk line saying we would "flag to creator that they're responsible" until a tax module shipped. A search of every screen and every translation file in the dashboard today finds no mention of tax at all.
What a merchant of record takes off you
The term has a plain meaning. Lemon Squeezy defines a merchant of record as "the legal entity selling goods or services to an end customer," responsible for "collecting sales tax, processing refunds and chargebacks, and ensuring PCI compliance."[3] You are not selling to the buyer. The platform is, and it then pays you.
Gumroad moved to this model at the start of 2025. Its help centre now reads "Gumroad now acts as the Merchant of Record for all sales," with sales tax "collection and remittance worldwide."[4] Its pricing page puts the date at 1 January 2025.[5]
A platform that is only running Stripe Connect for you is a different arrangement, even when its checkout looks the same. It moves your money. It does not stand between you and the tax authority. The quickest test is to search the platform's help centre for "merchant of record". If the phrase does not appear, assume you are the seller.
The EU sale you cannot ignore at $10
This matters most for a seller outside the EU with even a handful of European buyers.
For digital services sold to consumers, the EU taxes the sale where the buyer is: "You charge VAT at the rate of the customer's country."[6] For a supplier outside the EU, the Commission's summary of the rules says the place of taxation "is within the EU and accordingly they are subject to VAT," and that such a business can register in a single member state of its choosing rather than in every country it sells into.[7]
There is a EUR 10,000 threshold, and it is easy to misread as a small-seller exemption. The guidance frames it around sales that "may be subject to VAT in the EU country where the taxable person is established."[8] A creator in Texas or Toronto has no EU country of establishment for that rule to point back to, and the registration scheme built for them, the Non-Union scheme, is described as being "for businesses established outside the EU, with no EU fixed establishment."[6] The relief the threshold gives an EU seller is not written for you. Check it with an adviser before relying on it either way.
Registering also commits you to returns. A Non-Union return is filed every calendar quarter, due by the end of the following month, and a quarter with no EU sales still needs a "nil return."[9] That is four filings a year for as long as you stay registered, whether you sold one ebook in Germany or none.
Stars do not move the problem
Selling in Telegram Stars can feel like a way around all of this, since Telegram runs the purchase end to end. The developer terms close that door in section 6.4: "You are solely responsible for all taxes and fees associated with any income you receive," and "Telegram will not inform you of, nor calculate or pay out any taxes and fees on your behalf." The clause names Stars explicitly, along with "any other payment framework or processor you may choose."[10]
Across the three rails Volta shipped, cards through Stripe Connect, Stars and crypto, nobody filed tax for the creator. We did not on cards or crypto, and Telegram says in writing that it does not on Stars.
What each route costs on a $10 sale
The merchant-of-record fee looks expensive next to a card processor's until you price what the processor leaves undone. For one $10 digital sale, before any tax is added:
| Route | Fee on the sale | Who files the tax |
|---|---|---|
| Stripe, US buyer | $0.59 | you |
| Stripe, EU card | $0.74 | you |
| Stripe Tax Basic on top | +$0.05 | you, still |
| Lemon Squeezy | $1.00 | Lemon Squeezy |
| Gumroad, direct link | $1.50 | Gumroad |
| Gumroad, via Discover | $3.00 | Gumroad |
The Stripe rows come from 2.9% + 30¢, with 1.5% more for an international card and another 1% when currency conversion is needed.[11] Stripe Tax Basic adds 0.5% per transaction on its no-code checkout, but only where you are already registered, and it calculates and collects without filing. Registrations and filings sit in Tax Complete, which starts at $90 a month on a one-year contract.[12] Lemon Squeezy's headline is 5% + 50¢, with a note that some payments carry additional fees.[13] Gumroad's is 10% + $0.50 on direct sales and 30% on Discover.[5]
At this price the cheapest line on the table is the one that files nothing. On a domestic sale, Stripe plus Stripe Tax comes to $0.64 against Lemon Squeezy's $1.00, a gap of 36 cents. The entry tier of Tax Complete covers 200 transactions a month, two registrations a year and four filings a year,[12] which is exactly one Non-Union registration's quarterly returns. Two hundred sales at 36 cents is $72, less than the $90 the tier costs. At $10 a sale, a creator who wants the filing automated pays more on Stripe than a merchant of record charges to take the whole problem, at every volume that tier allows.
Raise the price and the answer changes. At $50, the gap per sale is a dollar, and the subscription pays for itself at 90 sales a month. A percentage fee scales with the price; a filing subscription does not.
Three questions before you sell anywhere
Ask the platform who the business of record is on your buyer's statement, and whether that entity also collects and files sales tax and VAT. The answers can differ, as ours did.
If the answer to the second question is you, ask where in the product it tells you so. A platform that has thought about it will point at a screen. Ours would have pointed at a line in a planning document.
And if you are outside the EU with European buyers, decide before your first sale whether you are registering for the Non-Union scheme or selling through someone who already has. Deciding later means going back over every quarter you already sold in.
Disclosure. The payment_mode column, the unused mor value, the destination-charge setup
without on_behalf_of, the waitlist form that replaced the planned merchant-of-record fallback,
and the tax disclosure that never shipped are all from our own build of Volta, so they carry no
citation below. Volta was our product, it is retired, and nothing here recommends it. This is
not tax advice. Every external quote is cited to the provider's or the regulator's own page.