Common Questions - VAT between Discogs and Sellers:
- What is the VAT?
- Does the VAT apply to me?
- What if I don't have a VAT ID?
- Do I need a VAT ID to sell on the Marketplace?
- What if I already have a VAT ID?
- How can I confirm whether my current VAT ID is valid?
- Am I eligible for a VAT deduction?
- I’m a private seller, not a business. Will I still be charged VAT?
- Will I be charged VAT for an item that I sold to a customer who lives outside of my home country?
- What is my VAT Rate?
- How do I calculate the expected VAT fee on an item for sale? And the Total due for the monthly invoice?
- Why is my invoice in USD and you have charged me VAT?
Common Questions - VAT between Sellers and Buyers:
- Am I required by law to charge VAT on sales from my Discogs listings?
- If I am a European seller can I charge VAT on new and used items without a valid VAT ID?
- Should a seller in the EU charge VAT on new or used items when the buyer is located outside of the EU?
- Does Discogs handle local or regional VAT?
VAT between Discogs and Sellers
The Value Added Tax, or VAT, is a general, broadly based consumption tax assessed on the value added to goods and electronic services. It is also referred to as consumption tax or GST in some jurisdictions.
VAT applies in many countries worldwide, but not all. For those countries where VAT is applicable, Discogs is obliged to charge VAT for all Discogs sales transaction fees earned by sellers residing in those locations. Some countries allow sellers to collect this tax independently, in which case Discogs will not charge the seller VAT. VAT is charged in accordance with the local legislation in each member state.
Note: What follows is general information about VAT. You should contact your tax advisor or review the European Commission's VAT documentation, Japanese Consumption Tax documentation or applicable local advisors in your location for more information.
If you are a seller residing in the European Union or Japan, then the VAT applies to you.
If you are selling from Japan or a country located in the EU, your country’s standard rate for the VAT will be added to your Discogs fees. This fee will be broken down into its own line item on the invoice, called “VAT fee”.
Sellers in the EU may obtain a VAT ID to manage the collecting of VAT independently. Sellers in Japan do not have this option and will always be invoiced the VAT fee directly.
Example: A seller in France will have 20% of the Discogs 8% sales fee added to their monthly invoice. That means a monthly invoice of sales fees (8% of all sales during the month) that totaled $10 USD would have a VAT of $2 added.
For sellers in the EU, if you already have a VAT number, you will be able to enter it into your Seller Settings. Be sure to include your country code or our validator will not recognize your VAT ID. Here’s more help on the EU VAT ID validation process. If your VAT number is validated, the VAT will not be added to your fees on the Discogs invoice as Discogs will assume that you are collecting this tax independently.
If you are located in The Netherlands, VAT will be collected through Discogs regardless of saving your VAT ID in your Seller Settings.
For sellers in the EU, if you already have a VAT number, and want to confirm it is current and / or valid, you can check the status of your VAT number at the European Union VIES validation website.
If you have a business registered with VAT, you may be eligible for deductions. Deductions may be made on VAT that you pay when acquiring goods from other businesses that are also registered with VAT, which is called a reverse charge on VAT. You will need to check with your local tax authority or tax advisor to confirm your eligibility.
Yes, private sellers will be charged. VAT rules dictate that anyone residing in Japan or the EU must be taxed for consuming our electronic service. Whether that’s upfront through Discogs or on your own by registering with VAT is up to you.
For tax purposes, Discogs sellers are the customers, or consumers of the Discogs service. Thus, Discogs must collect appropriate VAT on sales fees generated by sellers through the Discogs Marketplace service, no matter where the buyer resides.
In Japan, the current VAT rate (referred to as consumption tax) is 8%. In the EU, if you would like know the rate of VAT of the country where you are based, please check with the European Commission. You will not be charged a percentage of the total sale. The VAT fee is only applied to the Discogs 8% fee. We calculate VAT at the time the seller’s bill is created each month, determined by your “ships from” location set in your Seller Settings. Example: A seller in France (VAT of 20%) would see an invoice amount that breaks down like this:
The VAT charge is X% of the 8% sales fee.
You will need three formulas, in this order:
- (Sale Price converted to USD) x (0.08) = Discogs Fee
- (Discogs Fee) x (Country’s VAT Standard Rate) = VAT Fee
- Discogs Fee + VAT Fee = Total Due
Example, for a seller in France:
- ($10) x (0.08) = $0.80
- ($0.80) x (0.20) = $0.16
- $0.80 + $0.16 = $0.96
Discogs currently invoices in USD only. Discogs is also responsible for collecting VAT in certain countries. Invoicing in USD and collecting VAT in certain countries is allowed.
VAT between Sellers and Buyers
Depending on the country where your shop or primary residence is located, you may be required by local tax regulations to charge VAT on your sales to Discogs Marketplace buyers. In addition, you may not be required to charge VAT on the sales of goods made to buyers outside your country.
Sellers are not permitted to add VAT to the final item price after a buyer has purchased the item through the marketplace. If you are a seller from a country that requires you to charge VAT on the sale of your goods, you will need to specify the VAT rate for potential buyers prior to their purchase. For example, some jurisdictions require that the VAT be included sales price with “including VAT” in close proximity and others require the price to be shown excluding VAT. Please consult your local tax authority for appropriate ways to display this information.
Further, if you are a seller located in the EU, you may be required to provide an invoice to your buyers. Further information can be found on the EU VAT Invoicing Rules website.
There are many variables about how VAT is applied depending on the location of the seller and the buyer and whether or not the goods are new or used. Discogs is not able to provide advice or information about local regulations. We urge you to contact your tax advisor, local tax office, or other financial advisory services to learn more about VAT regulations in your area.
No. If you are not issued an EU VAT ID number as a seller in the EU, you are not able to charge VAT to buyers on new or used items. This is because without a valid VAT ID, you are not seen as taxable for VAT. Please consult your local tax advisor to determine if you need to obtain an EU VAT ID.
When the buyer resides outside the EU, no VAT should be charged on items sold to those buyers. The fact whether these buyers are businesses or private individuals, or whether the goods are new or used is irrelevant and no VAT should be charged.
Sellers who are required to charge VAT on sales are solely responsible for paying VAT to the appropriate authorities or tax offices in accordance with all applicable laws and regulations.
Keep in mind that Discogs is a consumer marketplace. Sellers who are required to charge VAT on sales may not add VAT to the price of items after they are purchased in the Discogs marketplace. If Discogs is required to charge VAT on your sales fees, you are also not allowed to add this charge to the price of items after purchase.