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Paddle for Non-Residents

Paddle is a merchant-of-record payment processor that handles global sales tax compliance for digital products. Non-resident Wyoming LLC owners can use Paddle to sell SaaS or digital products without managing VAT in each country.

Answer

Paddle is a merchant-of-record payment processor that takes legal responsibility for collecting and remitting sales tax and VAT globally. Non-resident-owned Wyoming LLCs sell to Paddle, and Paddle sells to end customers. This means you do NOT need to register for EU VAT, UK VAT, US sales tax, etc. Paddle handles compliance. Fees are higher than Stripe (5% to 7% vs 2.9% + $0.30) but the tax compliance value is substantial for global digital businesses.

By Zawwad, Founder & CEO, WyomingLLC by Topslice LLC.

Last updated May 20, 2026

What Paddle handles

  • Sales tax collection in US states
  • VAT collection in EU and UK
  • GST in Australia, Singapore, India digital goods
  • Remittance to all jurisdictions
  • Invoicing with proper tax inclusion
  • Customer refunds
  • Chargeback handling

Best fit for Paddle

  • SaaS sold globally
  • Digital downloads (ebooks, courses, software)
  • Subscription-based businesses
  • Businesses without resources for multi-jurisdiction tax compliance

Not the right fit for Paddle

  • Physical goods (Paddle is digital only)
  • Marketplaces with third-party sellers
  • B2B with custom invoicing requirements
  • Businesses that want direct customer relationship in payment flow

Frequently asked questions

Does Paddle accept non-residents?
Yes. Paddle accepts non-resident-owned LLCs with EIN.
What does Paddle charge?
5% to 7% per transaction depending on volume.
Do I still need Form 5472?
Yes. Form 5472 is mandatory regardless of payment processor.
Is Paddle revenue ECI?
Generally not for non-resident-owned LLCs. Same ECI analysis as Stripe revenue.

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