Cross-Border Payments & Compliance for Solo Developers
A pragmatic guide for solo software developers on handling international payments, VAT compliance, and avoiding account freezes.
Stock photo for illustration only, not from the actual event
- Solo developers face three-headed problems when selling software across borders.
- Using a Merchant of Record (MoR) simplifies tax and compliance handling.
- VAT/GST is charged based on the customer's location rather than the seller's.
- Minimize currency conversion losses by only converting funds needed for near-term expenses.
Selling software internationally as a one-person company is easier than ever—until money has to cross a border. Then you meet three-headed problems: getting paid, keeping the tax authorities happy, and not getting your account frozen. This guide covers the pragmatic path: what to set up, what to avoid, and where the real risks hide.
Most solo developers default to Stripe, and for good reason: it handles card processing, subscriptions, and 135+ currencies in one dashboard. But Stripe is not always the cheapest or most available option.
Stock photo for illustration only, not from the actual event
Actionable tip: If you sell to consumers in the EU or UK, use an MoR. If you sell B2B to a handful of companies, invoice them directly via Wise or Stripe Invoicing and let them handle their own VAT reverse-charge.
Understanding the role of a Merchant of Record (MoR) is vital for solo developers. An MoR acts as the legal merchant of selling your products, automatically assuming the liability for global tax collection and compliance, which eliminates the administrative burden of registering for international sales taxes.
Cross-border tax is where solo developers get blindsided. Two concepts matter most:
- VAT/GST on digital services: The EU, UK, Australia, and many others require you to charge VAT based on the customer's location, not yours, known as the destination principle. The EU's OSS lets you file a single return once you exceed €10,000.
- Income tax and permanent establishment: If you are a sole trader in Country A selling to Country B, you generally owe income tax only in Country A unless you establish a permanent establishment in Country B.
Currency conversion is a silent tax on solo developers. If you earn in USD, EUR, and GBP but live in a country with a different currency, you can lose 2–4% per conversion through banks.
Actionable tip: Set a rule: never convert more than you need for the next 30 days of expenses. This reduces exposure to rate swings and keeps your accounting simple.
You don't need a compliance department, but you do need a paper trail. The basics include writing a one-page compliance runbook for dispute handling and KYC requests.
Source: Dev.to
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