Get set up for VAT collection
If you sell ConvertKit Commerce products to, or receive tips in your Tip Jar from, customers in the EU and UK, you may need to charge a Value-Added Tax (VAT) on the transaction.
DISCLAIMER: This article is neither financial advice nor tax advice. We recommend that you speak to your tax advisor with any questions or concerns about planning for your taxes.
This guide covers how you can charge VAT for such ConvertKit Commerce transactions, download a VAT report for tax-filing purposes, and disable VAT collection if you no longer need it.
NOTE: New to VAT? Learn more about it in our guide to VAT obligations when selling to EU/UK customers.
Enabling VAT collection in ConvertKit
Click your name at the top right of the ConvertKit dashboard, followed by Settings.
On the Settings page, click the Commerce tab in the left sidebar.
On the Commerce page, scroll down to the Taxes section and enable the Collect VAT setting.
Next, fill out your business address in the Business Address section.
Click the Save Tax Settings button to save your changes.
Under the Jurisdictions section, click Add jurisdiction and add all the tax jurisdictions in which you've registered your business for tax collection.
Setting up VAT for new ConvertKit Commerce products
Follow the steps here to create a new ConvertKit Commerce product.
As you're doing so, set up the Product Type and Tax Code for your product under the Product Price settings.
The Product Type can be either a good or service.
Here are the various Tax Code options and when they apply:
Tax code | Applicable to: |
Consulting | Consulting or other professional services |
eBook | Electronic books |
Electronically supplied services | Digital goods or services (not including eBooks) |
Non-taxable | Tax-exempted goods or services |
Reduced tax rate | Any general goods or services that do not fall within any other category, and that are subject to reduced tax rates |
Software as a service (SaaS) | Software being sold on a subscription basis |
Generally taxable | Any general goods or services that do not fall within any other category, and that are subject to standard tax rates |
After you've finished creating your new product, we'll automatically calculate the applicable VAT amount whenever an EU/UK customer buys it.
⚠️ IMPORTANT! VAT is an inclusive tax, so ensure that the price of your VAT-enabled products already takes VAT into account. VAT will not be charged separately from the price you've set for your product.
Setting up VAT for existing ConvertKit Commerce products
Click the Earn tab in the top navigation of the ConvertKit dashboard, followed by Products.
On the Products page, click the ConvertKit Commerce product for which you want to set up VAT.
The product builder will launch. Click Settings at the top right to open the Product Settings window.
Under the Product Details tab, set up the Product Type and Tax Code for your product. (Refer to the previous section for details on these settings.)
Click the Save button to save your changes. We'll then automatically calculate the applicable VAT amount whenever an EU/UK customer buys your product.
⚠️ IMPORTANT! VAT is an inclusive tax, so ensure that the price of your VAT-enabled products already takes VAT into account. VAT will not be charged separately from the price you've set for your product.
Repeat this process for all other existing ConvertKit Commerce products as needed.
Setting up VAT for Tip Jars
You can set up VAT for a new Tip Jar by filling out the Product Type and Tax Code settings when creating your Tip Jar.
You can also set up an existing Tip Jar for VAT. To do so, open your Tip Jar in the Tip Jar builder, then click Settings at the top right to update its Product Type and Tax Code.
Downloading your VAT report
When it's time to file your VAT return, you can download a report of all ConvertKit Commerce transactions for which you have collected VAT.
This report will contain:
A country-level report showing the number of VAT-applicable transactions and amount of VAT collected for sales in each country, and
A transaction-level report showing your transaction history for each country.
To download the VAT report, click your name at the top right of the ConvertKit dashboard, followed by Settings.
Go to the Commerce tab in the Settings page and scroll down to the Tax Report section.
Click the Download CSV button to download your VAT report in CSV format. We will send the report's download link to the email address associated with your ConvertKit account.
Disabling VAT collection in ConvertKit
If you are no longer liable to pay VAT, you can disable VAT collection in ConvertKit.
Click your name at the top right of the ConvertKit dashboard, followed by Settings.
Go to the Commerce tab in the Settings page and toggle the Collect VAT setting to the "Off" position.
Click the Save Tax Settings button to save your changes.
Now that you're set up to charge VAT for ConvertKit Commerce product sales, how does this process actually work? Learn more in this guide 👇