Discogs & Taxes: FAQ

Value Added Tax, commonly known as VAT, is a broad-based indirect tax levied on the value added to goods and services. In certain jurisdictions, it is alternatively known as consumption tax, sales tax, or GST

VAT is applicable to two primary taxable events: i) the provision of services (such as the Discogs selling fee) and ii) the provision of goods (items acquired in the Discogs Marketplace). Please consult our tax policy for further clarification.

For general inquiries, we recommend consulting the following resources: European Commission's VAT documentation, Japanese Consumption Tax documentation, Goods and Services Tax documentation, and the United Kingdom VAT documentation.

Please note that the information provided on Discogs serves as guidance and is not intended to be tax advice. Discogs advises contacting your tax advisors if you have specific questions related to VAT.

Is a VAT ID necessary to sell on the marketplace?

No, sellers do not need to have a VAT ID to sell on the Discogs Marketplace. Nonetheless, sellers are accountable for fulfilling any tax requirements in the tax jurisdiction(s) where they operate. Therefore, seeking guidance from the relevant tax authorities or a tax advisor is advisable.

What if I already have a VAT ID?

If you already possess a VAT ID, you can input it into your seller settings. Remember to include the two-letter country code at the beginning of the ID. Failure to do so may result in our validator being unable to recognize your VAT ID. Be sure to include the two-letter country code at the start of the ID, otherwise, our validator will not recognize your VAT ID:

Please ensure that your VAT ID is up to date at all times. Using an invalid VAT ID can lead to subsequent additional VAT payments.

For more information on the EU VAT ID validation process, please visit this external page. Sellers located in the United Kingdom can find more information here.

What is IOSS?

IOSS stands for Import One-Stop-Shop. It’s a system designed to allow goods imported into the EU from outside the EU to pass through customs more efficiently and to ensure that, where appropriate, marketplace facilitators like Discogs are properly charging, collecting, reporting, and remitting supply of goods VAT in the EU.Indirect Tax on Selling Fees

Is an IOSS number necessary to sell on the marketplace?

As a marketplace facilitator, Discogs handles the charging, collection, and remittance of VAT for goods sold to the EU from outside the EU using Discogs’ IOSS number. Sellers on Discogs who have their own IOSS number should not use it for sales made through Discogs’ platform.

Does Discogs provide a summary of the indirect tax information per order?

Your Marketplace order data exports and Monthly Platform Fee Statement will include Indirect Tax details related to both the supply of goods and the Selling Fees. Any Indirect Tax applied to orders, including Indirect Tax on Discogs Selling Fees, will be reflected in your data exports. This will make it easier for sellers to track sales and tax information for accounting, bookkeeping, and tax purposes.

What is the Monthly Platform Fee Statement?

The Monthly Platform Fee Statement features a per-order breakdown of all transaction details for the selected month, including item(s), shipping, Selling Fees, tax rates, and tax amounts. The statement includes a statement number, date, details of the Seller and platform operator (Discogs), and tax ID numbers (where applicable)

What is the Marketplace Transaction Export?

The Marketplace Transactions Export includes the tax information for every transaction processed on the Discogs platform. It will allow you to:

Track and reconcile all aspects of Discogs orders
Filter orders by date

Indirect Tax on Selling Fees

What is the VAT rate for the Discogs selling fee?

Kindly consult the table provided in our tax policy for specific details. For further information, you can find the EU VAT rates listed on the European Commission website

Please note that VAT is not charged as a percentage of the total sale. Rather, VAT is only applied to the Discogs selling fee. The VAT rate is determined by the “ships from” location set in your Seller Settings, and will be charged on the total Discogs selling fee.

Do I have to pay VAT/GST/consumption tax on Discogs selling fees as a seller?

Discogs will levy VAT/GST/consumption tax as required by law. Please refer to our country overview in Tax Policy.

I’m a private seller, not a business. Will I still be charged VAT?

Even if you're a private seller and not a business entity, VAT/GST/consumption tax will still be applicable to Discogs selling fees. VAT regulations stipulate that individuals residing in the EU, Australia, New Zealand, the United Kingdom, or Japan must be taxed for utilizing services.

If you’re registered for VAT/GST in your country of residence, do you still need to pay VAT/GST/consumption tax on Discogs selling fees?

For sellers in the EU (excluding the Netherlands) who possess a VAT registration number from their local tax authority, VAT won't be applied to the Discogs selling fee once this information is added to their seller settings. Although a VAT payment isn't necessary, it's important to note that EU countries typically require reporting such transactions in the seller's tax returns. Consulting your tax advisor for further details is advisable.

Similarly, for sellers in the UK, Australia, and New Zealand, once a valid VAT/GST number is added to their Discogs seller settings, VAT/GST won't be charged on the selling fee. Discogs treats this as a B2B transaction and applies Reverse Charge VAT treatment. While no VAT payment is required, we recommend all sellers verify whether there are any reporting obligations with their local tax authority.

Please note that sellers located in The Netherlands and Japan will always be charged VAT/consumption tax on the Discogs selling fee, following local requirements set upon Discogs.

Can I claim a VAT deduction in the Netherlands?

If you own a registered business in the Netherlands, you'll be subject to a 21% charge on the selling fees. You may potentially reclaim the VAT on the selling fees charged by Discogs through your periodic VAT return submitted to the Dutch Tax authorities. For further clarification, it's recommended to contact the Dutch Tax authorities or consult your tax advisor.

How do I calculate the expected VAT/GST/consumption tax on selling fees?

The VAT/GST/consumption tax charge is X% of the 9% selling fee.

You will need three formulas, in this order:

(Item Price+ Shipping Cost) x (9%) = Discogs Fee
(Discogs Fee) x (Country’s VAT/GST Standard Rate) = VAT/GST Fee
Discogs Fee + VAT/GST Fee = Total Collected Amount

The following is an example of how VAT is calculated and collected:

Seller Z is located in France, where the applicable VAT rate is 20%.

Seller Z receives an order for which the selling fee is €10.
VAT charged on the Discogs selling fee is 20% of €10, or €2.
The total amount collected by Discogs from Seller Z is €12 (€10 for the selling fee plus €2 for VAT).

A similar calculation methodology is applicable for GST rates.

Will I be charged VAT on the Discogs selling fee for an order sold to a customer who lives outside of my home country?

You will still be charged VAT on the Discogs selling fee, irrespective of whether the goods are sold outside your country of residence.

Indirect Tax on Supply of Goods

Do I get charged VAT/GST/sales tax for purchasing items in the Discogs Marketplace?

Generally, VAT/GST/sales tax is applicable to any purchases made on marketplaces. Depending on your shipping location, Discogs, as a marketplace, may be tasked with collecting VAT/GST/sales tax at checkout. In such instances, Discogs will then remit the collected taxes to the relevant tax authority. Please refer to the list of countries outlined in our tax policy page for more details.

In cases where Discogs does not collect VAT at checkout, this could be due to other factors that exempt Discogs from VAT collection responsibilities. For example, in the EU or UK, if the purchase exceeds the threshold of €150/£135 and is shipped from outside the EU/UK, customers may be required to pay Import VAT to customs authorities or couriers upon the arrival of the goods at their destination.

How are US sales taxes calculated when orders are placed?

US sales taxes are computed automatically at checkout, utilizing the customer's shipping details for accurate calculation. The calculated amount is then displayed at the checkout stage

If I am a customer based in the EU, why was I asked to pay VAT a second time when my package arrived?

In certain situations, despite the seller attaching a commercial receipt to the package, customs agencies may not recognize it as proof of VAT paid. Customs authorities may require specific tax information, such as Discogs IOSS number, to be submitted digitally by the seller and/or courier. If the tax information or any other required fields are not successfully communicated to the customs authorities, the customs authorities can withhold your package and consequently request an additional VAT payment. Please contact our Community Support team. We can help resolve this issue to ensure you're not unnecessarily required to pay taxes twice.

What does Discogs state to the buyer about additional import VAT and customs duties for an order above the £135 or €150 UK or EU import threshold?

Discogs' Tax Policy, clarifies that additional import VAT and customs duties may apply in the EU and UK for orders exceeding the€150 or £135 thresholds respectively. It is crucial for sellers to understand that they should not use Discogs' tax identification numbers when shipping those orders, as VAT was not charged at checkout, and providing such information to customs would be inappropriate and misleading. Such actions could lead to consequences for both the Seller and Discogs.

Does Discogs collect VAT on sales of goods in the UK?

Yes, since January 1, 2021, Discogs has been required to collect and remit VAT on sales of goods in the UK if the order value is below GBP 135 and shipped from outside the UK. This obligation applies to e-commerce marketplaces like Discogs. Additional details on these new sales taxes can be found in Discogs' Tax Policy.

Does Discogs collect VAT on the sale of goods in Switzerland?

Discogs is not currently applying VAT at checkout for shipments to Switzerland. All details where Discogs is collecting taxes can be found in Discogs’ Tax Policy

As a seller, I do not have a VAT number in the UK or EU. Can I still sell goods to buyers located in the UK and EU?

Sellers located outside the UK or EU do not need a VAT ID to ship goods to buyers located in the UK and EU. Discogs is responsible for collecting and remitting VAT on the supply of goods with an order value up to £135 or €150 thresholds in the UK and EU, respectively. Buyers are responsible for import taxes and duties (if applicable) when the order is above those thresholds.

As a buyer, I have a VAT number in the UK or EU, will I be charged VAT when buying goods?

When a buyer is VAT registered in the UK or EU, Discogs is not responsible for charging or collecting VAT at checkout in the UK or EU. Consequently, sellers should not include Discogs’ IOSS or UK VAT ID on shipping labels and import declarations. Instead, the buyer's VAT ID and address information should be included for any carrier/custom communication.

How should I ship goods when VAT/GST was not collected by Discogs?

When VAT hasn't been collected by Discogs due to the order exceeding €150 when shipping from outside the EU to EU customers, or £135 when shipping from outside the UK to UK customers, it's essential to ensure that you don't include any Discogs tax identification numbers in the customs declaration. If a seller misuses Discogs' tax numbers in any way, Discogs reserves the right to take action against the seller, including withholding or offsetting amounts due, issuing penalties, and/or suspending the seller's account.

If the order surpasses the import threshold(s), the buyer is considered the importer of record based on the "ships to" country, and the buyer is responsible for paying any applicable import VAT and duties.

Similarly, for orders shipped to Australia that exceed the order value of AUD 1,000. GST will not be collected by Discogs at checkout. The buyer is considered the importer of record and the buyer is responsible for paying any applicable import GST and duties in Australia.

What do I need to consider when shipping internationally?

Discogs provides buyers with all necessary information each time an order is made. Upon order creation, buyers can refer to the commercial receipt for details. It's crucial to include platform tax information in the customs declaration. For further guidance, please refer to our shipping policy pages.

When I’m selling second-hand items, is VAT still applicable?

The margin scheme is a special VAT scheme for entrepreneurs who trade in used goods in the EU and UK. If you are an EU/UK-based seller and you sell within the EU or UK, you have to ensure that you qualify for applying the VAT margin scheme, as certain conditions must be met. Regardless of the VAT margin scheme, Discogs is still required to collect VAT at checkout for orders under €150/ £135 when goods are shipped from outside the EU/UK and will remit the collected VAT to the relevant tax authorities.

Can a seller include their own invoice or receipt on the parcel instead of Discogs' commercial receipt?

Invoicing requirements can vary by country. If you are an EU seller and are selling domestically or within the EU, Discogs encourages you to include your own invoice or receipt with the order.
However, for international shipments, a commercial receipt is necessary for customs to facilitate importation. Discogs has tailored its commercial receipt to better serve international markets such as the US, UK, EU, Australia, and New Zealand. In these regions, using Discogs’ commercial receipt may help ensure that the buyer is not charged VAT/GST again on import.