What is a Merchant of Record?
Polar acts as the Merchant of Record (MoR) for all transactions on the platform. This means we are the legal seller of your products and handle:- Payment processing
- Sales tax and VAT collection
- Tax remittance to authorities
- Compliance requirements
- Customer invoicing
- Refund processing
- Chargeback management
How It Works
Transaction Flow
- Customer Purchase: Customer buys your product through Polar
- Payment Processing: We process payment via Stripe
- Tax Calculation: Automatic tax calculation based on customer location
- Tax Collection: Appropriate taxes collected from customer
- Revenue Distribution: Net revenue (minus fees and taxes) credited to your balance
- Tax Remittance: We handle filing and payment to tax authorities
Legal Entity
Polar’s merchant of record services are provided by: Polar Software, Inc.- 548 Market St, PMB 61301
- San Francisco, CA 94104
- United States
Tax Handling
Automatic Tax Collection
Polar automatically handles:- US Sales Tax: State and local sales tax
- VAT: Value Added Tax for EU/UK and other countries
- GST: Goods and Services Tax where applicable
- Other Taxes: Regional tax requirements worldwide
Tax Processors
We use industry-leading tax calculation services:- Stripe Tax: Primary tax calculation engine
- Numeral: Alternative tax processor (optional)
Tax ID Support
Customers can provide tax IDs for:- VAT exemption (EU businesses)
- Reverse charge mechanism
- Reduced tax rates
- Corporate purchases
Tax Compliance
Polar handles:- Registration: Registered with tax authorities in required jurisdictions
- Filing: Regular tax return submissions
- Payment: Timely remittance of collected taxes
- Record Keeping: Transaction records for auditing
Customer Invoicing
Automatic Invoices
For every transaction, we provide:- Professional PDF invoices
- Tax breakdown
- Legal entity information
- Payment details
- Customer information
Invoice Delivery
- Emailed to customer automatically
- Available in customer dashboard
- Downloadable via API
- Includes all tax details
Refund Handling
Refund Process
- You approve refund request
- Polar processes refund through Stripe
- Customer receives funds back
- Taxes automatically adjusted
- Your balance debited for refund amount
Tax Adjustments
- Refunded taxes returned to customer
- Tax liability adjusted automatically
- No manual tax filing needed
- Compliance maintained
Chargeback Management
Our Responsibility
As merchant of record, we handle:- Chargeback notifications
- Evidence gathering
- Dispute submission
- Communication with banks
- Resolution tracking
Your Role
- Provide delivery confirmation
- Share customer communications
- Verify order legitimacy
- Collaborate on dispute response
Chargeback Monitoring
We use Chargeback Stop for:- Real-time chargeback alerts
- Early warning system
- Fraud prevention
- Dispute automation
Benefits of MoR Model
For Sellers
- No Tax Registration: We handle tax compliance
- Global Sales: Sell worldwide without setup
- Simplified Accounting: Single payout, simple reporting
- Legal Protection: We assume liability for transactions
- No Setup Fees: Start selling immediately
For Customers
- Trusted Seller: Purchase from established entity
- Proper Invoicing: Professional invoices with tax details
- Easy Refunds: Streamlined refund process
- Secure Payments: PCI-compliant payment processing
- Customer Support: Dedicated support team
Compliance Features
Payment Security
- PCI DSS Compliant: Level 1 compliance via Stripe
- 3D Secure: Additional fraud protection
- Encryption: All payment data encrypted
- Tokenization: Card details never stored directly
Data Protection
- GDPR Compliant: EU data protection standards
- Data Processing Agreement: Available on request
- Customer Data: Securely stored and handled
- Right to Erasure: Data deletion requests honored
Financial Regulations
- KYC/AML: Know Your Customer and Anti-Money Laundering checks
- Identity Verification: Required for account admins
- Transaction Monitoring: Fraud detection and prevention
- Regulatory Reporting: Compliance with financial regulations
Your Obligations
As a Seller
While Polar handles most compliance, you must:- Deliver products/services as described
- Respond to customer inquiries
- Honor refund requests per your policy
- Comply with acceptable use policy
- Maintain accurate product information
- Report suspicious activity
Tax Reporting
- Keep records of payouts received
- Report income per your jurisdiction
- Consult tax advisor for your obligations
- 1099-K forms provided for US sellers (if applicable)
International Considerations
Currency Support
We support 135+ currencies:- Customers pay in their currency
- Automatic currency conversion
- Exchange rates via Stripe
- You receive payouts in your account currency
Regional Compliance
Polar maintains compliance in:- United States (all states)
- European Union (all member states)
- United Kingdom
- Australia, Canada, Japan
- 100+ countries
Limitations
Restricted Products
See acceptable use policy for prohibited items.Country Restrictions
Some countries not supported due to:- Regulatory complexity
- Banking limitations
- Sanctions
- Compliance requirements
Transaction Limits
Limits may apply based on:- Account age and history
- Geographic location
- Product type
- Risk assessment
Getting Help
Support Resources
- Documentation: Comprehensive guides at polar.sh/docs
- Email Support: [email protected]
- Discord Community: Join our Discord
- Status Page: Service status updates
Tax Questions
For tax-specific questions:- General tax handling: Documentation and support
- Your tax obligations: Consult qualified tax advisor
- Jurisdiction-specific: Polar support can clarify our processes
Next Steps
- Review Fee Structure
- Check Supported Countries
- Read Acceptable Use Policy
- Understand Account Reviews
- Set up your Financial Account