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How does VAT work on Patreon?

Please note: VAT on Patreon is determined by patron location at the time of making the pledge.

If you're not yet familiar with the basics of VAT, we first recommend checking out these helpful starter articles:  

How VAT Works

VAT - Supplying Digital Services To Private Consumers

Here’s some general information on VAT and how we handle it on Patreon. For more info and advice on your specific situation, we recommend you talk with a tax advisor or local tax authority.

VAT (Value Added Tax) is a consumption-based tax that’s assessed on the value added to goods and services -- including digital. It’s charged as a percentage of price (so on Patreon, a $1.00 pledge with 23% VAT will have a final cost of $1.23).   

Starting in 2015, the European Union changed regulations for how VAT is calculated on sales of digital services. It is now determined by the location of the consumer, not the location of the business. Unfortunately, this also applies to independent content creators like the ones on Patreon.

Instead of putting the burden on Patreon creators to collect and calculate VAT chargeable to EU-based patrons, Patreon will handle it.  We will automatically present and collect VAT at the applicable rate from EU-based patrons, and we will also take care of the filing and remittance of VAT payments  made by patrons for digital services provided by our creators through Patreon. Creators, whenever you see your patrons’ payments, account balances, etc. on Patreon, VAT chargeable to patrons for digital services has already been deducted.

For creators based in the EU, you will not need to remit VAT charged to Patrons for digital services on your Patreon page because we are handling that for you. If your rewards include physical goods or other things besides digital services we recommend you consult with a local tax advisor or local tax authority for information on the VAT due for those goods.   We also recommend that you consult with a tax advisor or local tax authority to confirm that by using the Patreon platform you will not be required to register for and collect VAT.

So in short -- creators, don’t worry about collecting VAT from Patrons -- we’ve got you covered and are handling everything automatically, behind the scenes.

Here’s an example of how EU-based patrons will see  what VAT is to be charged before they make a pledge:

 

 

The following table provides the VAT rate that each country requires (this list is not exhaustive, please speak with a local tax advisor on the VAT for your specific country):

Country

Value-Added Tax Rate

Austria

20%

Belgium

21%

Bulgaria

20%

Croatia

25%

Cyprus

19%

Czech Republic

21%

Denmark

25%

Estonia

20%

Finland

24%

France

20%

Germany

19%

Greece

23%

Hungary

27%

Ireland

23%

Italy

22%

Latvia

21%

Lithuania

21%

Luxembourg

17%

Malta

18%

Netherlands

21%

Poland

23%

Portugal

23%

Romania

20%

Slovakia

20%

Slovenia

22%

Spain

21%

Sweden

25%

United Kingdom of Great Britain and Northern Ireland

20%

Peru

17%


This article has covered some general information on VAT and how we handle it on Patreon. For more info and advice on your specific situation, we recommend you talk with a tax advisor or local tax authority.

 

 

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