VAT
When you use Checkout, you are licensing Tebex to sell your products for you, and we are deemed the Merchant Of Record. Because of this we are required to charge VAT to players based in the European Union. As time passes and regulations change we may also have to charge sales taxes in other regions.
We collect and pay all sales tax on your behalf to the relevant tax authorities. For example, if we collect VAT for a player based in France, we will pay that sales tax to the French tax authorities for you without any input needed from yourself.
This is a legal requirement for any business selling virtual goods online, and this same process happens with platforms such as Patreon, the Apple App Store and the Google Play Store.
Any payouts you request are paid to you as royalties, so you do not need to pay VAT again on any money you receive from Tebex. If you are currently paying VAT on sales earned via Tebex, moving to Tebex Checkout will remove this requirement. If your accountant is requesting more information about how we handle VAT please provide them with the Tebex Checkout Terms Of Supply or ask them to get in touch with our customer support team.
Points to note:
You cannot disable or turn off sales tax/VAT - Please do not request this from the support team.
You do not need to add your own VAT number - As Tebex is the MoR, your VAT number is not required.
Do not advise your customers to avoid paying sales tax/VAT - Stores advising this risk permanent closure and removal from the Tebex platform.
Tebex support two different 'Tax Modes' for Tebex Checkout users - allowing you to specify if the product prices you provide should be considered to be inclusive or exclusive of VAT.
By default, Tebex assumes prices provided are exclusive of VAT. In this mode, we will calculate and add on tax in addition to the payment price. The benefit to this is that the brand owner will receive the same amount from each payment, regardless of where a customer comes from, however it means that different customers will see different prices for your products, depending on their country of residence.
In the UK, the VAT rate is 20%. If a product is priced at $10 with the VAT exclusive pricing mode, then the price a UK-based customer would be charged is $12. When a purchase was made, the $2 VAT would be deducted, meaning $10 was available to the brand holder, before processing and platform fees.
In Italy, the VAT rate is 22%. If a product is priced at $10 with the VAT exclusive pricing mode, then the price a UK-based customer would see would be $12.20. When a purchase was made, the $2.20 VAT would be deducted, meaning $10 was available to the brand holder, before processing and platform fees.
If the brand owner opts to enable 'VAT Inclusive' pricing, then we will charge customers the same amount every time, and calculate the VAT as part of that price. Unlike VAT exclusive pricing, this means that every customer will see exactly the same price for your products, regardless of their country, but it does mean you'll receive a different amount depending on the amount of VAT charged.
In the UK, the VAT rate is 20%. If a product is priced at $10 with the VAT inclusive pricing mode, then regardless of country the customer would be charged $10. From this, $1.67 would be deducted as VAT, meaning $8.33 was available to the brand holder, before processing and platform fees.
In Italy, the VAT rate is 22%. If a product is priced at $10 with the VAT inclusive pricing mode, then regardless of country the customer would be charged $10. From this, $1.80 would be deducted as VAT, meaning $8.20 was available to the brand holder, before processing and platform fees.
