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How VAT works and is collected (value-added tax)

Value-added tax (VAT) is a consumption tax on the value added to goods and services; in our case, digital products. Perfmatters is sold by forgemedia LLC, a business registered in the United States. However, we are still required to charge value-added tax (VAT) for business-to-consumer (B2C) transactions to those in the EU and the UK. The VAT rate is set by each country.

For business-to-business transactions (B2B), we do what is called a reverse-charge VAT. If your business is registered in the EU or the UK and you a valid VAT number, you will be exempt from VAT. You simply need to enter a valid VAT number on checkout.

VAT number on checkout
VAT number on checkout

Troubleshooting

If you are getting an error when trying to check your VAT ID on checkout, follow the recommendations below.

Confirm correct VAT ID format

Make sure you are typing the VAT ID in the correct format, including the two-character country code. For example, a VAT ID for Germany will look something this: DE123456789.

Make sure you’re using a valid VAT ID number

Check that your VAT number is up to date and valid. If you are in the EU, you can do this on the European Commission’s website. This is a real-time system that checks the validity of VAT identification numbers against the databases maintained by member states.

European Commission VAT number validation
European Commission VAT number validation

If you are in the UK, you can do this on the GOV.UK website. This is a real-time system that checks the validity of VAT identification numbers against the databases maintained by businesses registered in the UK.

Validate UK VAT number
Validate UK VAT number

If your VAT number appears as invalid, unfortunately, there is nothing we can do. You would need to reach out to your own tax authority for assistance.

SOAP-ERROR or MS_MAX_CONCURRENT_REQ

If you get either of the following errors, it most likely means that the EU VIES database is down. They are quick to fix this. We recommend trying to purchase again in a few minutes.

SOAP-ERROR: Parsing WSDL: Couldn’t load from ‘http://ec.europa.eu/taxation_customs/vies/checkVatService.wsdl’: Premature end of data in tag html line 1

MS_MAX_CONCURRENT_REQ

FAQs

I’m not located in the EU or UK, am I still charged VAT?

If your billing address is registered outside of the EU or UK, you will not be charged VAT on checkout. This is automatically determined by the country you choose.

I’m not in the EU or UK, will you validate my VAT number?

At this time, we only support reverse-charge on VAT for customers in the EU or UK with valid VAT numbers.

Who gets the VAT?

VAT is collected by us and submitted each quarter to its respective EU member state or UK tax authority.

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