Paddle is the reseller of the Product. This structure allows Paddle to be responsible for all Sales Tax collection, reporting and remittance to relevant authorities. Paddle entirely handles VAT, Sales tax, GST for all digital products sold to countries where this is a legal requirement, eg. EU member states, USA, India, Australia, and more. 

Simply the meaning of Paddle acts as a re-seller of the product is that Paddle can add tax to the product, charge the payer for it and return the tax amount to the relevant authority. 

Paddle is free of taxes in countries listed below:

USA(some states), Azerbaijan, Algeria, Andorra, Bangladesh, Brazil, Venezuela, Egypt, Israel, China, Kuwait, Pakistan, Seychelles, Tunisia, Uruguay, Serbia.

Exact list of taxed countries:

Please note that in most other countries, taxes are levied on individuals. 

VAT-registered businesses will not pay VAT if the transaction is cross-border (they do this by entering their VAT ID at the time of purchase).

Here is all relevant information, provided by Paddle: