Discogs & TVA

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Starting July 1, 2021, Discogs is collecting Supply Of Goods VAT.

For more specific information, please have a look at the document EU & UK Tax Information and the blog post Everything You Need to Know About Upcoming UK and EU VAT Changes on Discogs


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?

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

 

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?

What is the Supply of Goods VAT and how is it charged on Discogs orders?

 

VAT between Discogs and Sellers

What is the VAT?

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. 

Discogs is obliged to charge VAT on the 8% Discogs sales transaction fees for sellers residing in locations where VAT is applicable. 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 country.

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, Good and Services Tax documentation, United Kingdom VAT documentation or applicable local advisors in your location for more information.

Does the VAT apply to me?

If you are a seller residing in the European Union, the United Kingdom or Japan, then the VAT applies to you.

What if I don’t have a VAT ID?

If you are selling from Japan, Australia, the United Kingdom or a country located in the EU, your country’s standard rate for VAT or GST 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 who are outside of The Netherlands and who wish to manage the collection of VAT independently may obtain a VAT ID from the country’s tax administrations.

Please note that sellers located in The Netherlands and Japan do not have the option to manage the collection of VAT themselves and will always be invoiced directly by Discogs for VAT.

Do I need a VAT ID to sell on the Marketplace?

No, sellers are not required to obtain a VAT ID to sell on the Discogs Marketplace.

What if I already have a VAT ID?

VAT ID’s are managed in Seller Settings for sellers in the EU and the United Kingdom who wish to independently manage the collection of VAT. Be sure to include your country code or our validator will not recognize your VAT ID:

Also, please make sure that your VAT ID is up-to-date at any time. Using an invalid VAT ID can lead to a subsequent additional VAT payment.

Here’s more help on the EU VAT ID validation process. Sellers located in the United Kingdom can find more information here. 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.

Remember, if you are located in The Netherlands, VAT will be collected through Discogs regardless of saving your VAT ID in your Seller Settings. 

How can I confirm whether my current VAT ID is valid?

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.

Sellers located in the United Kingdom can check their VAT ID here.

Am I eligible for a VAT deduction?

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.

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

Yes, private sellers will be charged. VAT rules dictate that anyone residing in the EU, the United Kingdom or Japan must be taxed for consuming our electronic service. VAT is required for all sellers regardless of whether it is charged and collected upfront through Discogs or a seller manages their own VAT by registering with VAT.

Will I be charged VAT for an item that I sold to a customer who lives outside of my home country?

For VAT 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.

What is my VAT Rate?

In Japan, the current VAT rate (referred to as consumption tax) is 10%. In the EU, if you would like to know the VAT rate for the country where you are based, please check with the European Commission

Please note, VAT is not charged as a percentage of the total sale. Rather, VAT is only applied to the Discogs Marketplace Service fee. We calculate VAT at the time the seller’s bill is created each month. The amount is calculated on total Marketplace Service Fees charged, determined by the “ships from” location set in your Seller Settings. The current VAT rate in the United Kingdom is 20%.

How do I calculate the expected VAT fee on an item for sale? And the Total due for the monthly invoice?

The VAT charge is X% of the 8% sales fee.

You will need three formulas, in this order:

  1. (Sale Price converted to USD) x (0.08) = Discogs Fee
  2. (Discogs Fee) x (Country’s VAT Standard Rate) = VAT Fee
  3. Discogs Fee + VAT Fee = Total Due

Following is an example of how VAT is calculated and added to a seller’s fee invoice: 

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

  1. Seller Z’s monthly Discogs Marketplace Sales Fee totals $10 USD. 
  2. VAT charged on the Discogs Marketplace Sales Fee is 20% of $10 USD, or $2 USD. 
  3. The total amount due from Seller Z is $12 USD ($10 USD for Fees plus $2 USD for VAT).

Why is my invoice in USD and you have charged me VAT?

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.

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

Starting July 1, 2021, Discogs is collecting and remitting UK VAT on the sales of goods made into the UK by Discogs sellers. 

The new UK VAT law shifted the burden for the collection of VAT on the sale of goods from the point of importation to the point of sale. The new UK law eliminated the previous Low Value Consignment Relief provision which relieved import VAT on consignments of goods valued at £15 or less.

More information on the new sales of goods taxes can be found in the separate document EU & UK Tax Information.

VAT between Sellers and Buyers

Am I required by law to charge VAT on sales from my Discogs listings?

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.

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.

Moreover, if you are a seller located in the EU, you are required to provide an invoice to your buyers. This invoice can be downloaded by clicking the “Print” button on the order page. Further information on invoices 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.

If I am a European seller, can I charge VAT on new and used items without a valid VAT ID?

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.

What is the Supply of Goods VAT and how is it charged on Discogs orders?

The Supply of goods VAT is new to Discogs and its sellers and buyers as of July 1, 2021 and is  charged on the total landed cost of an order. 

This is how it is charged:

  • The total landed cost of an order is the total of item value and shipping amount. VAT is charged at the rate applicable to the country of importation (usually the buyer’s location or the location where the order is being shipped) and is calculated on the total of the item value plus the shipping amount (total landed cost).
  • Supply of goods VAT is applicable for orders imported into the EU and the UK from another country.
    • Since Brexit, orders shipped to the UK from the EU are now subject to supply of goods VAT if they are at or under the UK threshold (GBP 135).
    • Likewise, orders shipped to the EU from the UK are now subject to supply of goods VAT if they are at or under the EU threshold (EU 150).
  • Discogs will charge, collect and remit VAT on orders with a total landed cost up to EUR 150 and GBP 135.
    • VAT becomes the responsibility of the buyer when the total landed cost of an order exceeds the supply of goods VAT thresholds noted above. The buyer will need to pay any applicable VAT and customs fee at the moment of importation.
      • This means Discogs will not charge VAT on orders with a total landed cost that exceeds EUR 150 for orders imported into the EU and GBP 135 for orders imported into the UK.

Note: The supply of goods VAT will not be charged to buyers who are VAT registered and supply Discogs with a valid VAT ID in seller settings.

More information and the specific VAT percentages can be found in the document EU and UK Tax Information.

                                                                                                                                                  

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