What is VAT?

VAT is a Value-Added Tax, which is basically a general consumption tax on services and goods (physical and digital). For every sale you make in the European Union (EU), VAT is applicable. Just like each country/state has its different tax rates, you will have to pay VAT according to where you and your users are from if your content is bought in the EU. Since you are just selling digital goods, you will need to look up which rates apply for digital goods.

Since the VAT rates differ if you are from the EU or not, you should check with a tax professional how you should go about it.

If you are from the EU and are selling digital goods to a customer and not a business, you will charge VAT according to your country's VAT, but only if you are selling less than €10,000 a year. If you make more than the established EU amount, then you need to charge VAT according to the country your users reside in.

If you are a non-European business, you will charge a user according to the user's country VAT, regardless of how much you sell in the EU.

If you do not charge the VAT, you will still need to pay for the VAT that was meant to be charged, so you should consult with a tax professional to know how to not lose money in the process.

How to Collect VAT through Uscreen?

To collect VAT through Uscreen, you will need to decide how much you will charge for your content within the subscription plans and bundles. When a user is paying to have access to your content, the Total will state that it already includes taxes. So when you are setting your prices, add the VAT to it to account for the taxes that users would normally pay for.

For example, if I want users to pay $10 for a monthly subscription plan, and the average VAT rate is 23%, then I will charge $12.30 for that monthly plan. However, not all countries have the same VAT rate, so you will need to choose what rate will be best for you.

How to Calculate VAT According to Your Users?

Since you will need to keep records of how much your users are paying and know the correct amount of VAT you will need to pay for each EU user, we have added location details to the Invoices CSV file that you can export under the Sales tab.

To export the file, navigate to the Sales tab, go to Invoices, then click on Export CSV. To download it, go to the Settings tab, click on Exported Files, then on the file you exported, click Download.

Sometimes it might take a couple of minutes for the exported file to appear under Exported Files because it is collecting the data from all users.

Once the CSV file has been downloaded, you will see that the table provided has information on the Card Issuer Country, Zip, Country, Region, and City. The data will help you know exactly from where the user is buying your content and what needs to be paid in VAT.

NOTE: From now on, you won't need to contact our support team to get the Sales by Location report that was previously provided. Instead, you will just need to download the Invoices report mentioned above that provides all the information given on the Sale by Location report.

Disclaimer: These are very general recommendations. We're not tax professionals, and we can't be responsible for any losses or tax liabilities due to actions taken (or not taken) based on these recommendations. Again, always consult a tax professional when planning how to manage to collect taxes.

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