Being a worldwide community gives us the benefit of amazing user diversity. It also means that we have to evolve based on how marketplaces are required to operate in different parts of the world. One such evolution is The European Union’s Value Added Tax (VAT), which will soon be implemented across Creative Market. We’ve received many questions about what VAT is, how it works, and how invoicing will be handled. To help make sure everyone is on the same page before VAT is implemented across the site, we’ll be answering many of these questions here in this post.<\/p>\n
\nVAT is a sales tax that we are required to charge on behalf of the European Union. VAT is implemented on purchases originating from, or in cases where the buyer lives in, an EU country. The changes we’re making are legally mandated for all online marketplaces that serve EU buyers.\n<\/p>\n
\nOver the past year, Creative Market has implemented the systems necessary to collect, remit, and properly invoice for transactions requiring that VAT be levied. As the EU requires Creative Market to collect and remit VAT, Creative Market has taken the measures necessary to assess and pay all VAT arising from 2015 sales.\n<\/p>\n
\nThe breakdown of who will and won’t be affected by VAT is fairly simple:\n<\/p>\n
\nWe will begin collecting VAT on Creative Market on May 16th, 2016. In the next section, we’ll go over some of the most common VAT questions and answers. You can also learn more in our VAT FAQ<\/a>. \nIf you have questions that you don’t see covered below, please write us at support@creativemarket.com.\n<\/p>\n \nThe European Union value added tax (or EU VAT) is a consumption tax levied on goods and services within the European Union (EU). Different rates of VAT apply in different EU member states. The VAT rate may differ by country.\n<\/p>\n \nChanges to the EU’s VAT law that took effect in 2015 require us to begin charging VAT on all electronically supplied services (“ESSâ€), which include products offered on Creative Market.\n<\/p>\n \nBuyers who are located in the EU and don’t provide a valid VAT registration number must pay VAT. \nA VAT registration number (or a VRN in the UK) shows that a buyer is a registered business in an EU country and therefore won’t be charged VAT by Creative Market. If you are a business, but do not have a valid VAT registration number, you will be charged VAT.\n<\/p>\n \nUpon your first purchase of a Creative Market product, you will be asked to confirm where you are located. If you affirm you are in an EU country, your purchase (as well as all subsequent purchases) will be charged VAT based on the EU country where you are located. Upon receipt of a valid VAT registration number, Creative Market will not collect VAT on your transactions, and will instead provide an invoice for your records.\n<\/p>\n \nThe VAT rate in the EU country where you are located determines the percentage of the product’s price that will be assessed as VAT. Product prices you see on Creative Market prior to purchase do not include VAT. At checkout, the amount of the VAT will be shown.\n<\/p>\n \nFor your country’s VAT rate please see these resources:\n<\/p>\n \nBefore you confirm your purchase, we will indicate the country, VAT rate, and total VAT amount.\n<\/p>\n \nFor the purposes of EU VAT, Creative Market is deemed to be the seller. Creative Market determines, collects, and remits VAT for all purchases by EU buyers.\n<\/p>\n \nVAT invoices are automatically created at the time of purchase and will be emailed to the respective parties. All invoices are designed to comply with the legal requirements set forth by each EU member state. Additionally, all invoices will be archived in Creative Market’s tax compliance system.\n<\/p>\n \nNo, VAT is not part of the earnings calculation.\n<\/p>\n \nOur registered VAT number is EU528002441.\n<\/p>\n \nCreative Market determines, collects, and remits VAT for all purchases by EU buyers.\n<\/p>\n
\nHere are some helpful educational resources from the EU:\n<\/p>\n\n
\n<\/span>Detailed FAQ<\/span><\/h2>\n
<\/span>What is VAT?<\/strong><\/span><\/h3>\n
<\/span>Why are you charging VAT?<\/strong><\/span><\/h3>\n
<\/span>Who must pay VAT?<\/strong><\/span><\/h3>\n
\nThe European Commission states<\/a> that “located†means:\n<\/p>\n\n
<\/span>What is a valid VAT registration number?<\/strong><\/span><\/h3>\n
<\/span>Will I be charged at purchase if I provide a valid VAT registration number?<\/strong><\/span><\/h3>\n
<\/span>How is VAT calculated?<\/strong><\/span><\/h3>\n
<\/span>What is the VAT rate in my country?<\/strong><\/span><\/h3>\n
\n
<\/span>How will I know what country and rate you’ll charge me for VAT?<\/strong><\/span><\/h3>\n
<\/span>Is Creative Market or the shop owner considered the seller for VAT purposes?<\/strong><\/span><\/h3>\n
<\/span>Will buyers be sent a VAT invoice for each purchase?<\/strong><\/span><\/h3>\n
<\/span>As a shop owner are my earnings affected by VAT?<\/strong><\/span><\/h3>\n
<\/span>What is Creative Market’s registered VAT number?<\/strong><\/span><\/h3>\n
<\/span>Who will remit the VAT collected to the EU?<\/strong><\/span><\/h3>\n
<\/span>As a buyer, how will I know what the total price of a product, including VAT, will be before I purchase?<\/strong><\/span><\/h3>\n