Which countries does Paddle charge sales tax or VAT for?

What is VAT?

VAT (Value Added Tax, sometimes known as Sales Tax), is a tax on purchases. VAT must be collected on digital products sold to consumers within the EU, on certain inter-state US transactions, and in a growing number of other countries. It is charged on top of the sale price of a product and must be returned to the relevant tax authority i.e. the governing body at the buyer’s location.

This means that whether a VAT charge is applied to a purchase depends on the location of the buyer; if the buyer is from a country where VAT applies, a VAT charge will be applied to the transaction. The buyer is responsible for paying the VAT.

The PRIOje payment provider make sure the appropriate VAT amount is collected from the buyer and passed on to the authorities in the buyer’s home country on PRIOjet behalf.

Which countries does Paddle charge sales tax or VAT for?

When you book a subcription, the country from which you are making the purchase may charge VAT. The PRIOjet payment provider is registered and able to handle VAT payments for the regions listed below. The listed rates are for the “Standard Digital Goods” tax category.

For countries in the list that show B2B & B2C, B2B customers are responsible for reclaiming indirect tax back on their tax returns.

Jurisdiction	Tax Rate, %	Indirect Tax	B2B/B2C
Armenia	20%	VAT	B2C
Australia	10%	GST	B2C
Bahamas	10%	VAT	B2B & B2C
Bahrain	10%	VAT	B2C
Chile	19%	VAT	B2C
Colombia	19%	VAT	B2C
Georgia	18%	VAT	B2C
Ghana	15%	VAT	B2C
Iceland	24%	VAT	B2B & B2C
India	18%	GST	B2C
Indonesia	11%	VAT	B2B & B2C
Japan	10%	Consumption Tax	B2B & B2C
Kazakhstan	12%	VAT	B2B & B2C
Kenya	16%	VAT	B2B & B2C
Liechtenstein	8.1%	VAT	B2B & B2C
Malaysia	6%	SST	B2B & B2C
Mexico	16%	VAT	B2B & B2C
Moldova	20%	GST	B2C
New Zealand	15%	GST	B2C
Nigeria	7.5%	VAT	B2B & B2C
Norway	25%	VAT	B2C
Oman	5%	VAT	B2B & B2C
Saudi Arabia	15%	VAT	B2C
Singapore	9%	GST	B2C
South Africa	15%	VAT	B2B & B2C
South Korea	10%	VAT	B2C
Switzerland	8.1%	VAT	B2B & B2C
Taiwan	5%	VAT	B2C
Tanzania	18%	VAT	B2C
Thailand	7%	VAT	B2C
Turkey	20%	VAT	B2C
United Arab Emirates	5%	VAT	B2C
Uganda	18%	VAT	B2C
United Kingdom	20%	VAT/ VAT OSS	B2B & B2C
Uzbekistan	12%	VAT	B2C
Vietnam	11.11% / 17.65%	FCT	B2B & B2C
Canada	_	_	_
Alberta	5%	Federal GST	B2C
British Columbia	7% + 5%	PST + Federal GST	B2B & B2C
Manitoba	7% + 5%	RST + Federal GST	B2C
New Brunswick	15%	Federal HST	B2C
Newfoundland and Labrador	15%	Federal HST	B2C
Northwest Territories	5%	Federal GST	B2C
Nova Scotia	15%	Federal HST	B2C
Nunavut	5%	Federal GST	B2C
Ontario	13%	Federal HST	B2C
Prince Edward Island	15%	Federal HST	B2C
Quebec	9.975% + 5%	QST + Federal GST	B2C
Saskatchewan	6% + 5%	PST + Federal GST	B2C
Yukon	5%	Federal GST	B2C
EU Countries	_	_	_
Austria	20%	VAT OSS	B2C
Belgium	21%	VAT OSS	B2C
Bulgaria	20%	VAT OSS	B2C
Croatia	25%	VAT OSS	B2C
Cyprus	19%	VAT OSS	B2C
Czech Republic	21%	VAT OSS	B2C
Denmark	25%	VAT OSS	B2C
Estonia	22%	VAT OSS	B2C
Finland	24%	VAT OSS	B2C
France	20%	VAT OSS	B2C
Germany	19%	VAT OSS	B2C
Greece	24%	VAT OSS	B2C
Hungary	27%	VAT OSS	B2C
Ireland	23%	VAT	B2C
Italy	22%	VAT OSS	B2C
Latvia	21%	VAT OSS	B2C
Lithuania	21%	VAT OSS	B2C
Luxembourg	17%	VAT OSS	B2C
Malta	18%	VAT OSS	B2C
Netherlands	21%	VAT OSS	B2C
Poland	23%	VAT OSS	B2C
Portugal	23%	VAT OSS	B2C
Romania	19%	VAT OSS	B2C
Slovak Republic	20%	VAT OSS	B2C
Slovenia	22%	VAT OSS	B2C
Spain	21%	VAT OSS	B2C
Sweden	25%	VAT OSS	B2C
United States*	_	_	_
Alabama	4%	Sales Tax	B2B & B2C
Arizona	5.6%	Sales Tax	B2B & B2C
Arkansas	6.5%	Sales Tax	B2C
Colorado	2.9%	Sales Tax	B2B & B2C
Connecticut	6.35%	Sales Tax	B2B & B2C
Denver	4.81%	Sales Tax	B2B & B2C
District of Columbia	6%	Sales Tax	B2B & B2C
Hawaii	4%	Sales Tax	B2B & B2C
Idaho	6%	Sales Tax	B2B & B2C
Illinois	6.25%	Sales Tax	B2C
Indiana	7%	Sales Tax	B2B & B2C
Iowa	6%	Sales Tax	B2B & B2C
Kansas	6.5%	Sales Tax	B2B & B2C
Kentucky	6%	Sales Tax	B2B & B2C
Louisiana	4.45%	Sales Tax	B2B & B2C
Maine	5.5%	Sales Tax	B2B & B2C
Maryland	6%	Sales Tax	B2B & B2C
Massachusetts	6.25%	Sales Tax	B2B & B2C
Michigan	6%	Sales Tax	B2C
Minnesota	6.88%	Sales Tax	B2B & B2C
Mississippi	7%	Sales Tax	B2B & B2C
Nebraska	5.5%	Sales Tax	B2B & B2C
New Jersey	6.63%	Sales Tax	B2B & B2C
New Mexico	5.13%	Sales Tax	B2B & B2C
New York	4%	Sales Tax	B2B & B2C
North Carolina	4.75%	Sales Tax	B2B & B2C
North Dakota	5%	Sales Tax	B2C
Ohio	5.75%	Sales Tax	B2B & B2C
Pennsylvania	6%	Sales Tax	B2B & B2C
Rhode Island	7%	Sales Tax	B2B & B2C
South Carolina	6%	Sales Tax	B2B & B2C
South Dakota	4.5%	Sales Tax	B2B & B2C
Tennessee	7%	Sales Tax	B2B & B2C
Texas	8%	Sales Tax	B2B & B2C
Utah	4.85%	Sales Tax	B2B & B2C
Vermont	6%	Sales Tax	B2C
Washington	6.5%	Sales Tax	B2B & B2C
West Virginia	6%	Sales Tax	B2B & B2C
Wisconsin	5%	Sales Tax	B2B & B2C
Wyoming	4%	Sales Tax	B2B & B2C

* Please note that sales tax laws and regulations are written, passed, and interpreted by states, and there is no unified federal agreement on how to approach the sales tax for digital products. The taxability of digital products varies greatly by (and within) states, and depending on local municipalities, the total tax rate can be higher than the stated rate.

Currently, digital products can be characterized as either: electronically downloaded software, SaaS, or digital goods, although you may see these referred to as tangible personal property, services, or intangible property in the official documentation.

Due to this situation, some states charge the sales tax for all categories, while others charge sales tax for some of the categories, or do not charge it at all. Hence why if you sell products from multiple categories, you may notice that customers from the same state may receive a bill with or without tax.

If you have any questions about the tax information on your invoice, please contact https://paddle.net/verify-email directly.

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