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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. Novashare is sold by forgemedia LLC, a business registered in the United States. However, we are still required to charge VAT for business-to-consumer (B2C) transactions to those in the EU. The VAT rate is set by each member state (country).

For business-to-business transactions (B2B), we do what is called a reverse-charge VAT. If your business is registered in the EU 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. 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 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

If you get the following error, 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

FAQs

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

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

Who gets the VAT?

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

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