๐Ÿ’ธ Getting Paid

Selling directly to customers

If you want to sell directly to customers on your website, you could use a PSP (Payment Service Provider) such as Stripe (opens in a new tab) or PayPal (opens in a new tab) to accept payments. As web developers, that probably seems like an easy option at first.

However, this makes you liable for tax compliance, reporting, and remittance in the customer's country, payment disputes, refunds, chargebacks, and more. That's a lot of work and probably not what you want to spend your time worrying about. If you are going this route, you should probably hire an accountant, and use services like Stripe Tax (opens in a new tab), TaxJar (opens in a new tab), Avalara (opens in a new tab) and such, to help with the process.

To make selling internationally easier, you need a Merchant of Record service.

Merchants of Record services

A Merchant of Record (opens in a new tab) (MoR) is the entity that sells goods or services to a customer. It can be you, your company, or an external service. These external services sit between you and your customers and act as a proxy for tax remittance, managing payments, subscriptions, and other matters. FastSpring (opens in a new tab), Paddle (opens in a new tab), Lemon Squeezy (opens in a new tab), Gumroad (opens in a new tab), and Patreon (opens in a new tab) are general-purpose MoRs. Xsolla (opens in a new tab) is a game-specific MoR. Itch.io has a good comparison (opens in a new tab) between handling payments yourself versus using an MoR service (they support both).

We can also leverage stores like Steam (opens in a new tab), the App Store (opens in a new tab), Google Play (opens in a new tab), and itch.io (opens in a new tab) to act as merchants of record.

With these platforms, if you are based outside of the US, you will likely have to submit a W-8BEN form (opens in a new tab), to declare your tax residency. It is usually pretty easy to do directly via the platform's website.

The following services do not act as MoR: Shopify (opens in a new tab), Ko-Fi (opens in a new tab), Buy me a coffee (opens in a new tab).

Note that MoR services take care of sales taxes, but you are still responsible for paying income taxes in your own country and for having the appropriate legal status to receive payments as a business. If you are a solo developer, you can set up a sole proprietorship, which is typically easier than setting up a corporation.

Disclaimer: The information on this page does not constitute tax or legal advice. You should consult a tax professional for advice on your specific situation.