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How to collect VAT for Kit Commerce product purchases
How to collect VAT for Kit Commerce product purchases

Enabling VAT collection, setting up your product types and tax codes, downloading your VAT report, and more.

Updated over a week ago

Get set up for VAT collection

If you sell Kit Commerce products to, or receive tips in your Tip Jar from, customers in the EU and UK, you may need to charge a Value-Added Tax (VAT) on the transaction.

DISCLAIMER: This article is neither financial advice nor tax advice. We recommend that you speak to your tax advisor with any questions or concerns about planning for your taxes.

This guide covers how you can charge VAT for such Kit Commerce transactions, download a VAT report for tax-filing purposes, and disable VAT collection if you no longer need it.

NOTE: New to VAT? Learn more about it in our guide to VAT obligations when selling to EU/UK customers.

Enabling VAT collection in Kit

Click your name at the top right of the Kit dashboard, followed by Settings.

On the Settings page, click the Commerce tab in the left sidebar.

On the Commerce page, scroll down to the Taxes section and enable the Collect VAT setting.

Next, fill out your business address in the Business Address section.

Click the Save Tax Settings button to save your changes.

Under the Jurisdictions section, click Add jurisdiction and add all the tax jurisdictions in which you've registered your business for tax collection.

Setting up VAT for new Kit Commerce products

Follow the steps here to create a new Kit Commerce product.

As you're doing so, set up the Product Type and Tax Code for your product under the Product Price settings.

The Product Type can be either a good or service.

Here are the various Tax Code options and when they apply:

Tax code

Applicable to:

Consulting

Consulting or other professional services

eBook

Electronic books

Electronically supplied services

Digital goods or services (not including eBooks)

Non-taxable

Tax-exempted goods or services

Reduced tax rate

Any general goods or services that do not fall within any other category, and that are subject to reduced tax rates

Software as a service (SaaS)

Software being sold on a subscription basis

Generally taxable

Any general goods or services that do not fall within any other category, and that are subject to standard tax rates

After you've finished creating your new product, we'll automatically calculate the applicable VAT amount whenever an EU/UK customer buys it.

โš ๏ธ IMPORTANT! VAT is an inclusive tax, so ensure that the price of your VAT-enabled products already takes VAT into account. VAT will not be charged separately from the price you've set for your product.

Setting up VAT for existing Kit Commerce products

Click the Earn tab in the top navigation of the Kit dashboard, followed by Products.

On the Products page, click the Kit Commerce product for which you want to set up VAT.

The product builder will launch. Click Settings at the top right to open the Product Settings window.

Under the Product Details tab, set up the Product Type and Tax Code for your product. (Refer to the previous section for details on these settings.)

Click the Save button to save your changes. We'll then automatically calculate the applicable VAT amount whenever an EU/UK customer buys your product.

โš ๏ธ IMPORTANT! VAT is an inclusive tax, so ensure that the price of your VAT-enabled products already takes VAT into account. VAT will not be charged separately from the price you've set for your product.

Repeat this process for all other existing Kit Commerce products as needed.

Setting up VAT for Tip Jars

You can set up VAT for a new Tip Jar by filling out the Product Type and Tax Code settings when creating your Tip Jar.

You can also set up an existing Tip Jar for VAT. To do so, open your Tip Jar in the Tip Jar builder, then click Settings at the top right to update its Product Type and Tax Code.

Downloading your VAT report

When it's time to file your VAT return, you can download a report of all Kit Commerce transactions for which you have collected VAT.

This report will contain:

  1. A country-level report showing the number of VAT-applicable transactions and amount of VAT collected for sales in each country, and

  2. A transaction-level report showing your transaction history for each country.

To download the VAT report, click your name at the top right of the Kit dashboard, followed by Settings.

Go to the Commerce tab in the Settings page and scroll down to the Tax Report section.

Click the Download CSV button to download your VAT report in CSV format. We will send the report's download link to the email address associated with your Kit account.

Disabling VAT collection in Kit

If you are no longer liable to pay VAT, you can disable VAT collection in Kit .

Click your name at the top right of the Kit dashboard, followed by Settings.

Go to the Commerce tab in the Settings page and toggle the Collect VAT setting to the "Off" position.

Click the Save Tax Settings button to save your changes.

Now that you're set up to charge VAT for Kit Commerce product sales, how does this process actually work? Learn more in this guide ๐Ÿ‘‡

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