> ## Documentation Index
> Fetch the complete documentation index at: https://docs.dodopayments.com/llms.txt
> Use this file to discover all available pages before exploring further.

# Introduction

> Dodo Payments is your Merchant of Record: the legal seller that calculates, collects, and remits sales tax and handles payments and compliance for you.

Dodo Payments operates as your **Merchant of Record (MoR)**. We are the legal seller of your digital products, so we take responsibility for payment processing, sales tax, and compliance while you build and sell your product.

<CardGroup cols={3}>
  <Card title="220+ Regions" icon="globe">
    Accept payments from 220+ countries and regions
  </Card>

  <Card title="40+ Payment Methods" icon="credit-card">
    Cards, wallets, and local methods
  </Card>

  <Card title="No Sales Tax Filing" icon="file-invoice">
    We file and remit sales taxes
  </Card>
</CardGroup>

## What Is a Merchant of Record?

A **Merchant of Record** is the legal entity that sells to your customer, appears on the customer's card statement, and is responsible for the transaction. When Dodo Payments is your MoR:

* **We are the legal seller.** Dodo Payments appears on bank statements and receipts.
* **You are the product creator.** You build, price, and deliver your product.
* **We run the back office.** We handle sales tax, compliance, billing, and the dispute process with card networks.
* **You receive net payouts.** Your revenue, after tax and fees, is paid to your bank account.

```mermaid theme={null}
flowchart LR
    A[Customer] -->|Pays| B[Dodo Payments]
    B -->|Tax| C[Tax Authority]
    B -->|Payout| D[You]
```

<Note>
  A Merchant of Record works like an outsourced global finance team: it issues invoices, collects and files sales taxes, and runs billing for every sale.
</Note>

## Why Use a Merchant of Record?

Selling digital products worldwide means following VAT rules in Europe, GST in Australia, sales tax in the US, and requirements in many other jurisdictions. Each jurisdiction has its own rules, rates, thresholds, and filing deadlines.

| Your Responsibility | Without MoR | With Dodo as MoR |
| - | :-: | :-: |
| VAT/GST Registration | You | Dodo |
| Tax Calculation | You | Dodo |
| Tax Filing & Remittance | You | Dodo |
| Chargeback Liability | You | You, with Dodo's dispute tools |
| PCI Compliance | You | Dodo |
| Multi-Currency Support | Complex | Built-in |
| Local Payment Methods | Integrate Each | 40+ Included |

<Tip>
  **Example**: You sell a €50/month subscription to a customer in France.

  **Without MoR**: You register for French VAT, charge €60 (€50 plus 20% VAT), file French VAT returns, and answer French tax audits.

  **With Dodo**: We collect €60, remit €10 VAT to France, and pay you €50 minus fees.
</Tip>

## PSP vs. MoR: Key Differences

A **Payment Service Provider** (such as Stripe) and a **Merchant of Record** both process payments. They differ in who is the legal seller.

### Payment Service Provider (PSP)

A PSP processes transactions, and you remain the legal seller:

```mermaid theme={null}
flowchart LR
    A[Customer] --> B[Your Site]
    B --> C[PSP]
    C --> D[Your Bank]
    
    D -.->|You Handle| E[Taxes]
    D -.->|You Handle| F[Disputes]
    D -.->|You Handle| G[Compliance]
```

<Warning>
  With a PSP, **you** are responsible for tax registration, collection, filing, and remittance in every jurisdiction where you have customers.
</Warning>

### Merchant of Record (Dodo)

An MoR becomes the legal seller and handles tax and compliance end to end:

```mermaid theme={null}
flowchart LR
    A[Customer] --> B[Dodo Checkout]
    B --> C[Dodo Payments]
    C --> D[Your Wallet]
    
    C -.->|Handled| E[Taxes]
    C -.->|Dispute Tools| F[Disputes]
    C -.->|Handled| G[Compliance]
```

<Check>
  With Dodo as your MoR, we handle sales tax and compliance, and give you tools to prevent and respond to disputes. You receive net payouts without filing sales tax returns.
</Check>

### Side-by-Side Comparison

| Aspect | PSP (Stripe, etc.) | MoR (Dodo) |
| - | :-: | :-: |
| Legal Seller | Your Company | Dodo |
| On Customer Statement | Your Name | Dodo (with your brand name) |
| Tax Registration | You | Dodo |
| Tax Calculation | You | Dodo |
| Tax Remittance | You | Dodo |
| Chargeback Risk | You | You, with Dodo's dispute tools |
| PCI Compliance | You | Dodo |
| Setup for Global | Complex | Simple |

<Info>
  **Important**: Both PSPs and MoRs process payments. The key difference is **who is legally responsible** for tax compliance on each sale.
</Info>

<Info>
  Chargebacks stay your responsibility with an MoR. When a dispute opens, the disputed amount and a dispute fee are deducted from your balance, and you accept or challenge the dispute from your dashboard. Dodo Payments provides Visa RDR, Ethoca alerts, and deflections to prevent disputes. See [Disputes](/features/transactions/disputes).
</Info>

## How Tax Compliance Works

Dodo handles the tax lifecycle for every sale:

<Steps>
  <Step title="Customer Location">
    We use the customer's country and postal code to determine which tax rules apply, such as VAT, GST, or sales tax.
  </Step>

  <Step title="Rate Calculation">
    The tax rate depends on the product's tax category, the customer's location, and whether the customer is a business. For example, EU business customers with a valid VAT number get reverse charge applied.
  </Step>

  <Step title="Collection at Checkout">
    Checkout shows the tax and collects it with the payment, so customers see exactly what they pay.
  </Step>

  <Step title="Filing & Remittance">
    We file returns and pay the collected taxes to the relevant authorities. You do not file sales tax returns for these sales.
  </Step>
</Steps>

## Revenue Flow

This example follows a \$200 sale to a customer outside the US with 15% VAT:

```mermaid theme={null}
flowchart LR
    A[Customer<br/>Pays $230] -->|incl. $30 tax| B[Dodo Payments]
    B -->|$30| C[Tax Authority]
    B -->|$186.95| D[You]
```

### Example Payout Breakdown

| Line Item | Amount |
| - | -: |
| Customer Payment (incl. tax) | \$230.00 |
| Sales Tax (15% VAT) | −\$30.00 |
| Dodo Transaction Fee (4% of \$230) | −\$9.20 |
| International Fee (1.5% of \$230) | −\$3.45 |
| Fixed Fee per Transaction | −\$0.40 |
| **Your Payout** | **\$186.95** |

<Note>
  Transaction fees are calculated on the total amount including tax, using standard pricing. The international fee applies because the customer's card is issued outside the US. Subscription payments add 0.5%. A payout fee is deducted per payout, not per sale. See the [pricing page](https://dodopayments.com/pricing) and [Payouts Process](/features/payouts/payout-structure).
</Note>

## When to Choose MoR vs. PSP

<Tabs>
  <Tab title="Choose Dodo (MoR)">
    **Dodo Payments suits you if you:**

    * Sell digital products, SaaS, or subscriptions
    * Have customers in multiple countries
    * Want to avoid registering for sales tax in each country
    * Prefer outsourced, predictable tax compliance
    * Value speed to market over full control
    * Want fraud screening and dispute prevention built in
  </Tab>

  <Tab title="Consider a PSP">
    **A PSP might suit you if you:**

    * Operate mainly in one country
    * Have in-house finance and compliance teams
    * Need full control over checkout UX
    * Work with very thin margins
    * Sell physical goods (MoRs focus on digital products)
  </Tab>
</Tabs>

<Note>
  Many businesses start with a PSP and move to an MoR as they grow internationally. Dodo Payments offers migration support for this move. See [Migrate to Dodo Payments](/migrate-to-dodo).
</Note>

## Frequently Asked Questions

<AccordionGroup>
  <Accordion title="What appears on my customer's credit card statement?">
    Dodo Payments appears as the merchant. By default, the statement descriptor is `DODOPAY_` followed by up to 14 letters of your business name, for 22 characters in total. You can customize it in your business profile. Customers also receive receipts that show your product information.
  </Accordion>

  <Accordion title="Do I still own the customer relationship?">
    Yes. You control pricing, branding, product delivery, and direct communication. Dodo handles billing, and your brand appears in checkout, emails, and invoices, so customers know they are buying from you.
  </Accordion>

  <Accordion title="How does B2B VAT reverse charge work?">
    Business customers can enter their tax ID, such as an EU VAT number, at checkout. We validate it, and where reverse charge applies, no tax is collected: the buyer accounts for the VAT in their own return.
  </Accordion>

  <Accordion title="Can I use my own payment processor?">
    Yes. With [Bring Your Own Processor (BYOP)](/features/byop) you can connect your own Stripe or Adyen account and route payments from selected countries through it, while Dodo Payments continues to power products, subscriptions, invoicing, and analytics. Countries you do not explicitly route keep flowing through Dodo Payments as your full-service Merchant of Record, so we remain responsible for tax on those routes.
  </Accordion>

  <Accordion title="How do refunds work?">
    Start refunds from your dashboard. The refund goes back to the customer's original payment method, and the ledger records it in the currency of the original payment. The tax on the refunded amount is reversed automatically.
  </Accordion>

  <Accordion title="What about my income tax?">
    Dodo handles **sales taxes** (VAT, GST, and sales tax) on customer transactions. You remain responsible for your business's income tax, corporate tax, and any tax obligations on the payouts you receive.
  </Accordion>

  <Accordion title="Which countries can I sell to?">
    We accept payments from 220+ countries and regions. See the full list:

    <Card title="Supported Regions" icon="globe" href="/miscellaneous/list-of-countries-we-accept-payments-from">
      View all 220+ countries and regions where we accept payments.
    </Card>
  </Accordion>
</AccordionGroup>

## Get Started

<CardGroup cols={2}>
  <Card title="Create Account" icon="rocket" href="https://app.dodopayments.com/signup">
    Sign up for free and start accepting global payments.
  </Card>

  <Card title="MoR vs PG Deep Dive" icon="scale-balanced" href="/features/mor-vs-pg">
    Detailed comparison with examples and use cases.
  </Card>

  <Card title="Acceptance Policy" icon="building-shield" href="/miscellaneous/merchant-acceptance">
    Learn which businesses we support.
  </Card>

  <Card title="Talk to Us" icon="envelope" href="mailto:founders@dodopayments.com">
    Get personalized guidance from our team.
  </Card>
</CardGroup>


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