What is VAT?
VAT, or Value Added Tax, is a consumption tax levied on goods and services at each stage of production and distribution. For digital platforms like Flirtback, VAT is collected from customers when they purchase goods or services to comply with local tax regulations. The collected VAT is then submitted to the respective local tax authorities. This ensures customers pay the appropriate tax as required by their jurisdiction.
Do Creators Need to Pay VAT?
If you're a creator, your VAT obligations depend on your local tax regulations and individual circumstances. Here's a general guide to help you:
- Creators in the EU or UK:
- Creators Outside the EU or UK:
If you're a VAT-registered creator or your income exceeds the local VAT registration threshold, you may need to report and pay VAT on your earnings. Flirtback collects VAT from users and handles remittance for digital services, so in most cases, creators don’t need to charge additional VAT themselves.
VAT obligations vary significantly. Some countries require registration regardless of income, while others don’t impose VAT on creators providing services online.
When Should Creators Register for VAT?
If you are an online content creator selling goods or services on commission, you must register for VAT if your annual turnover of taxable supplies is more than the registration threshold of your country. The registration threshold varies from country to country, ranging from €10,000 to €50,000. Therefore, checking the applicable threshold for your country before registering for VAT is important. Additionally, some countries require you to register for VAT regardless of turnover. It is important to research the laws and regulations in your country to ensure you are compliant.
What VAT rates are being used on Flirtback?
Flirtback applies VAT rates based on the customer's location. Below are the current VAT rates in the EU and the UK.
- Austria: 20%
- Belgium: 21%
- Bulgaria: 20%
- Croatia: 25%
- Cyprus: 19%
- Czech Republic: 21%
- Denmark: 25%
- Estonia: 20%
- Finland: 24%
- France: 20%
- Germany: 19%
- Greece: 24%
- Hungary: 27%
- Ireland: 23%
- Italy: 22%
- Latvia: 21%
- Lithuania: 21%
- Luxembourg: 17%
- Malta: 18%
- Netherlands: 21%
- Poland: 23%
- Portugal: 23%
- Romania: 19%
- Slovakia: 20%
- Slovenia: 22%
- Spain: 21%
- Sweden: 25%
- United Kingdom: 20%