But did you know they’re pretty VAT-savvy and offer store owners a number of VAT options?
1) if you’re a VAT registered business and wish to manage the VAT yourself, you can!
This option means you can either let Payhip handle everything and you receive the amount after VAT OR you can decide to do it all yourself and they provide the information you need. There may be many reasons to handle it yourself, one being the ever changing VAT rates and making sure no-one is paying more tax than they need to. Or wanting to avoid extra platform fees associated with VAT handling.
Account > Account Settings > Taxes > “Let Payhip handle digital products EU VAT automatically for you”
2) if you’d prefer to offer pricing that includes the VAT, then that’s an option too.
All stores legally have to show the price inclusive of VAT at every point – they’re not allowed to add it on at checkout as they might sales tax.
But this option is a choice between you as a store owner paying the VAT or your customer paying it. Put another way, it’s whether you set a baseline price and it be the same for all EU customers, or whether you let the system add the VAT on top of your baseline price, where the amount is dependent on your customer’s country rate.
This can be a heated topic that comes up a lot and we’re not going to get into it here but if you’d prefer to have your customers pay the same regardless of where they live then you can! And that’s really refreshing, as many platforms don’t provide this option.
Account > Account Settings > Taxes > “Include taxes within product price”
We’ll share some more tips over the next few posts that could help prevent VAT over-payment, which can only be a good thing, right?
eta/ this post was updated on 11th March 2022 with a new post graphic. The image shows the crown of my Concentricity pattern.
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