Value Added Tax (VAT) Handling
We don't yet offer VAT collection or remittance of any kind on the Blender Market.
However, as a marketplace that caters to a large European audience we have decided that ultimately we need to handle VAT on behalf of our Creators. As a U.S. based business there is no precedent for enforcing VAT but there is likely to be one before long.
More than anything this is to reassure EU Creators that they can legally sell on the Blender Market without getting into trouble with the EU.
How we aim to handle VAT
As the Merchant of Record (i.e. the business being paid and handling transactions) it is on us to both collect and remit VAT to the correct EU countries.
We will do this by detecting the customers location and then looking up the VAT rate for that location at the time of purchase. This rate will be applied as a Tax on the order, similar to Sales Tax, such that the customers total payment includes any and all applicable taxes.
Taxes will then be remitted by the Blender Market registering as a VAT MOSS (Mini One-Stop Shop) in a European country with no physical representation. This article from TaxJar goes over this in more detail: https://blog.taxjar.com/vat-moss-mini-one-stop-shop-explained-for-digital-product-sellers/
From the article:
If you sell digital products and you wish to take advantage of VAT MOSS, you would want to select a country in the EU with no Fiscal Representative costs. We would suggest registering in the Republic of Ireland, due to the potential of the UK coming out of the EU via Brexit.
Once registered for VAT MOSS in Ireland, you could sell your digital products to say, for example, Germany. You would charge your customers local VAT Rate (19% in Germany – as standard). You would then declare your sale (19% VAT) to your German customer on your VAT MOSS return which would be paid to the tax authority in Ireland.
When is this happening?
We are determined to make this happen soon. Keep an eye out for more updates coming this year.