How do payment platforms differ when it comes to calculating, collecting and remitting sales tax and VAT, and which ones will handle the filing for you?

“Calculation: Automatically calculates VAT, GST and sales tax based on customer location and product tax classification.”

“Collection: Adds the appropriate tax to checkout and invoices.”

“Remittance: Can automate tax payments through supported filing services.”

“Filing: Offers automated filing in supported jurisdictions, including US sales tax, certain Canadian and EU filings, and integrations with specialist tax providers.”

“Stripe also helps identify registration obligations and provides tax reporting.”

“Better if you want to maintain control over your customer relationship, pricing, checkout and payment infrastructure, and are comfortable retaining responsibility for tax compliance or outsourcing filing separately.”

“However, simply subscribing to Stripe Tax does not mean Stripe assumes all your tax obligations. You generally remain the seller and the legally responsible party.”

“Stripe can handle filing, but you need to activate the appropriate filing service and verify that your jurisdictions are covered.”

“Its standard business agreement places responsibility for determining, collecting, reporting and remitting taxes on the merchant.”

“It may provide transaction records and tax reporting information, but that should not be confused with filing VAT or sales tax returns for you.”

“PayPal | Depends on integration | Depends on integration | Generally no | Generally no”

“Calculates VAT, GST and sales tax.”

“Collects applicable tax at checkout.”

“Handles tax registrations and remittance in its supported jurisdictions.”

“Takes responsibility for relevant tax reporting and filing as Merchant of Record.”

“Issues compliant customer invoices.”

“Paddle operates as the reseller/seller of record, so you generally do not need to register for indirect taxes solely because of sales made through Paddle.”

“Particularly attractive if you sell subscriptions or software internationally and want someone else to handle customer-facing VAT and sales tax.”

“Calculation: Calculates applicable sales tax and VAT.”

“Collection: Collects tax during checkout.”

“Remittance: Offers automated sales tax remittance in eligible US states.”

“Filing: Shopify Tax Automated Filing can prepare and submit eligible US sales tax returns.”

“A natural choice if you already operate a Shopify store, especially if your main automated filing requirement is US sales tax.”

“The major limitation is geographic coverage. Shopify's automated filing is primarily a US sales tax solution, not a universal VAT filing service for every country.”

“For EU and UK sellers, Shopify provides tax calculation and reporting, but you should not assume it will file your VAT returns or pay your VAT liabilities.”

“Shopify's automated US filing is a separate capability, not a general promise to file all your VAT returns.”

“Calculates and collects VAT and sales tax.”

“Handles global tax remittance.”

“Issues tax-compliant customer invoices.”

“Acts as the Merchant of Record.”

“Its documentation explicitly states that you generally do not need to report sales tax on transactions processed through Lemon Squeezy.”

“Worth considering for downloadable products, digital subscriptions, templates, software licences and smaller online businesses.”

“However, your own business income taxes and other business-level obligations remain your responsibility.”

“Calculates tax according to customer location and product category.”

“Collects applicable taxes.”

“Files and remits sales taxes and VAT.”

“Handles relevant global tax compliance as the legal seller.”

“Worth comparing for larger software businesses with more complex international commerce requirements.”