Each store applies pricing to products in either Gross Pricing Mode or Net Pricing Mode. Depending on your settings, FastSpring will calculate taxes from each order, which we will remit to appropriate taxation authorities. If a customer enters a valid ID for tax exemption, FastSpring does not charge the customer tax; this does not impact your income. 

Contact FastSpring Support to change your Store’s pricing mode. This change will not affect active subscriptions 

Gross Pricing Mode

By default FastSpring applies Gross Pricing Mode to your store. This includes all applicable taxes in the customer-facing price. You can customize each currency price to adjust for taxes and fees. Otherwise, FastSpring will automatically convert the price from your base currency to your customer’s currency. 

At checkout, FastSpring displays and charges prices to customers in their country’s currency. If their country’s currency is disabled in your store, FastSpring charges them in your default currency. Then, FastSpring deducts taxes from the net amount you receive. Your gross profit will vary for each customer depending on taxes and deductions. 

FastSpring applies the following deductions to the product price:

Customer-Facing Prices

If your store’s default currency is not USD, and all other currencies are disabled, FastSpring will add tax to the total, regardless of pricing mode. 

Example:

In the example below, you configure a product to be € 10.00. When a customer in Germany purchases the product, FastSpring applies Germany’s VAT rate of 19% (or € 1.60). The remaining € 8.40 from your order is your Net Price. The net price does not include commissions, split shares, or processing fees. 

DescriptionCalculationAmount
Gross PriceNet Price + Tax Amount€ 10.00
Net Price (your profit)1.19x = Gross Price€ 8.40
Tax AmountGross Price – Net Price€ 1.60

Net Pricing Mode

With Net Pricing Mode, you receive the same base price for your product, regardless of taxes. This excludes taxes from your prices. When you configure a price in a non-USD currency, FastSpring adds taxes to the total and displays it at checkout. The totals will vary depending on taxes for each region. 

The amount you receive from FastSpring for the sale of a product is equal to your specified USD price minus each of the following:

Send a request to FastSpring Support to apply Net Pricing Mode to your stores. This will not affect active subscriptions 

Customer-Facing Prices

Example:

In the example below, you configure a product for € 10.00. When a customer in Germany purchases the product, FastSpring applies Germany’s VAT rate of 19% (or € 1.90). Then, FastSpring adds € 1.90 to the order and displays a total of € 11.90. You receive € 10.00 for this order; the € 10.00 does not account for additional fees and deductions. 

DescriptionCalculationAmount
Net PriceNon-USD Price You Have Set€ 10.00
Tax AmountNet Price * 0.19€ 1.90
Total PriceNet Price + Tax Amount€ 11.90

Table of Contents

FastSpring is required to collect tax information from Sellers earning revenue on our platform. All sellers, regardless of location or volume of transactions, are required to complete a W-9 or W-8 tax form questionnaire within the App. Form W-9 is required for US persons and form W-8 for foreign persons. We will collect and populate the appropriate form from the tax form questionnaire.

These forms are available in an electronic questionnaire in the Account Management page and collected at the company level. Please submit your tax form no later than December 1, 2021 to avoid any hold on your payouts. The electronic questionnaire only supports US English text characters and should be filled out based on treatment under US tax laws.

Form W-8

Sellers outside of the US and in Puerto Rico are required to confirm their tax status through the tax questionnaire. The tax questionnaire will identify any US tax treaty benefits you may be eligible to claim in order to reduce your tax liability. All sellers outside of the US, including those based in Puerto Rico, are required to confirm their tax status through the questionnaire prior to December 1, 2021.

Within the App, FastSpring will walk you through the W-8 form process to ensure the most accurate information is collected. Forms should be updated regularly or if any information changes.

For more information regarding what products are considered Downloadable Subscription Software (DSS) and your country’s tax withholding rates, see our US Tax Withholding for Downloadable Subscription Software doc.

Electronic Form W-8 Questionnaire

Only FastSpring users with the Company Administrator title will have access to fill out the W-8 form. Please complete the questionnaire no later than December 1, 2021.
  1. In the FastSpring App, navigate to the Accounts page. Under Tax Information, click Manage Tax Information.
  2. In the Tax Information page, click Add Tax Info.
  3. In the Tax Residency popup, enter your Country of Tax Residence.
  4. In the Do you have US based activities? field, select Yes if your business performs services in the United States. Otherwise, select No.
    US-based activities Not US-based activities
    Employing US engineers Employing US sales/marketing
    Owning property or smart servers Renting property or smart servers
    Having US customers
    Using a US merchant of record
  5. Click Start form W-8.
  6. In the Set Up Tax Information dialog, fill out the following fields:
  7. In the W-8 Information window, enter your Permanent Mailing Address and your Tax Identification Number. Click Next.
  8. In the Withholdings & Treaty Benefits page, select the drop-down if you are eligible to claim a reduced treaty rate on your US-sourced income. Select the eligibility criteria most applicable to your status.
  9. Click Next. The Confirmation page appears, containing your tax information and withholding rate. In the Legal Name field, type your legal name to sign the W-8 form.

Form W-9

To comply with the IRS, FastSpring will collect a general Form W-9 from all sellers based in the US. Sellers within the US are required to confirm their tax status through the questionnaire prior to December 1, 2021. Forms should be updated regularly and when any information changes.

Electronic Form W-9 Questionnaire

Only FastSpring users with the Company Administrator title will have access to fill out the W-9 form.
  1. In the FastSpring App, navigate to the Accounts page. Under Tax Information, click Manage Tax Information.
  2. In the Tax Information page, click Add Tax Info.
  3. In the Tax Residency popup, select United States.
  4. In the Set Up Tax Information dialog, fill out the applicable fields:
  5. In the Exempt Payee Code page, select any tax exemption classifications that you are eligible for. If none apply, select N/A.
  6. In the W-9 Form page, enter your Business Address and Tax Identification Number. This information must match the
  7. In the Confirmation Page, double check that the information is correct. Type your Legal Name in the field below to sign the W-9 form.

Starting May 1, 2021, FastSpring is releasing a series of product enhancements and tax calculation changes that will improve the way we calculate taxes on your behalf. We’ve also improved our tax selection tools to help sellers quickly and efficiently classify their products.

Why we are updating our tax engine

Using industry-leading proprietary and third-party tools, our tax experts monitor global regulations to ensure your business is protected and compliant. FastSpring uses product tax categories to accurately calculate how much to tax customers for your products and services. Accurate tax classification is critical for tax compliance to ensure that we are not over or undercharging taxes on transactions and decreases audit liability.

Because there are more than 11,000 tax jurisdictions in the US alone, determining the taxability for your products and services can be one of the more tedious and time-consuming parts of tax compliance. Choosing the right tax code without being a tax expert is no easy task, so we released a product tax category and a Tax Category Selection Helper to help you select the correct product code.

Several countries have also announced plans to change the way they tax digital goods and services. In response, we'll be launching Value Added Tax (VAT) collections in several new jurisdictions this summer to keep you compliant in these locations. These countries will include Chile, Mexico, Indonesia, and a few others.

Key Benefits:

What is needed from Sellers

To avoid the risk of over or under-charging your buyers on taxes, please make sure your products are mapped to the correct product tax category:

If you have already categorized your products, there is no further action needed from you at this time. You can review and edit product tax categories at any time directly in the FastSpring platform using the instructions in our documentation.

What is changing

On May 1, 2021, we went live with our new tax engine to provide the most accurate tax calculations for your products and services. We also increased the number of product categories that we support to improve tax classification, and added the ability to apply a single tax category to all the products in your Store.

After the changes take effect on May 1, some of your customers may pay more or less tax for your products and services based on three factors:

  1. Product tax category
  2. Buyer’s location
  3. Applicable tax laws

Overall, these changes will only impact 3% of current subscriptions on the FastSpring platform. However some transactions may have a noticeable impact on the customer, so we have prepared a short response below for you to reference.

What to tell customers if they ask about the changes

This year, several countries and jurisdictions around the world are changing the way they tax digital goods and services, and that includes the products we sell that you’ve come to rely on.

Since we are not tax experts, we partner with FastSpring tax specialists to ensure we accurately calculate and collect taxes, so you never overpay on transactions.

The changes we are making to the way we collect taxes this year will ensure we stay compliant with changing global tax regulations and you can keep enjoying the products and services we sell for a long time to come.

More Information

Table of Contents

When you configure your Store, you can customize the currencies that it supports and operates in. Your Base Currency will be the Store’s default currency in which you configure products.

You can select which currencies you want FastSpring to accept payments in. FastSpring will display region-specific payment methods to your customers and convert each transaction to your base currency.

Country Default Currencies

When a customer visits your Storefront, FastSpring selects the most appropriate currency depending on the country associated with the order. If you have disabled a currency in your Store, FastSpring applies your Base Currency to the order.

Select the drop-downs below to view the default currency for each country.

Africa

Asia and the Pacific

Europe

North and South America

Select Available Currencies for Your Store

In Store Settings, customize which currencies your store does and does not accept. FastSpring will convert your prices to the currency associated with your customers’ location. If you have disabled a currency, FastSpring will display and process orders from associated locations in your Store’s base currency. 

  1. In the FastSpring App, navigate to Settings > Store Settings > Localization
  2. Under Available Currencies, select the checkbox next to each currency you would like to collect payments in. FastSpring will convert each one to your base currency. 
  3. Save your changes. Allow up to 10 minutes for Live Storefronts to update.

To override currency and language settings for a specific storefront, see Currencies and Language Settings.

Base Currencies

Your Store’s Base Currency is the default currency in which you configure products. When a customer from another region purchases your products, FastSpring collects the payment in the customer’s currency and converts it to your base currency. If you disable a currency in your store, FastSpring applies your base currency to orders from the associated regions. 

Available base currencies include the following:

Update Your Base Currency

Contact FastSpring Support to update your store’s base currency.

After we update your currency, FastSpring converts transactions based on the rates of your base currency. All transactions will convert to your base currency. However, FastSpring converts sales to report in USD. These may be converted a second time if you receive payouts in a non-USD currency. 

Automatic Currency Conversion

When you configure products, you can apply a unique price for each currency that your Store supports. This can help account for tax rates if you use Gross Pricing Mode.

If you do not apply prices for additional currencies, FastSpring automatically converts your base currency price, and displays the localized price to your customers. FastSpring will convert this price back to your Store’s currency before issuing your payout. 

Markup Rates

If a customer uses a major currency at checkout (AUD, CAD, DKK, EUR, GBP, HKD, JPY, SEK, SGD, USD, ZAR), FastSpring marks the exchange rate as 3.5% higher than it is to adjust for fluctuations. Then FastSpring converts the base price to the customer’s currency with the markup rate. 

If the customer uses any other currency, FastSprings marks the exchange rate as 5.5% higher to adjust for fluctuations. Then FastSpring converts the base price to the customer’s currency with the markup rate. 

Price Decoration

Price Decoration helps display converted prices in a similar style to base prices. For example, if you configure a product to be 39.99 USD, but the conversion rate is 35.03 EUR, price decoration will display it as 35.99 EUR. 

Price decoration is only available with Gross Pricing Mode. If you have manually configured pricing for your customer’s currency, that price overrides price decoration.

Product configuration in the FastSpring App includes a questionnaire to select the best tax code for your product. If none of the options match your product, look for the best matching tax code for your product and submit the code to FastSpring Support.

Classic Platform Seller: If you are using the Classic version of the FastSpring platform, see Classic instructions for Product Tax Category configuration.

Virtual Product Portfolio (VPP) Sellers: You do not need to configure individual product tax categories. VPP products use tax code D9999999 (Temporary unmapped digital goods sku – taxable default) unless you set a Store default, described in step #4 below.

Each product can only have one product tax code applied. FastSpring cannot offer tax advice and is responsible for taxing accurately based on product information that you provide. While we cannot choose the tax code for you, as long as you choose a tax code that is relevant to your product you will be in compliance.

Choose a Product Tax Category

To set the same Product Tax Category for many products, follow the steps below and select the optional checkbox described in step #4.

  1. Log in to the FastSpring App and select the product to add the Tax Category to.
  2. Above the Overview section of the Product Details page, look for Product Category This is followed by a link that shows Unspecified (if a tax category has yet to be assigned) or a tax code (if one has been assigned). Click the link.
  3. In the Product Tax Category dialog, choose the most appropriate selection from the options:

  4. Depending on your first selection, you will have different additional options to choose from. Select the best options from the choices until you see a Tax Code displayed. Optionally, select the Save as default product tax category checkbox to apply the same code as default for all other products. You can still set a unique Product Tax Category on a product that should be different from the code you set as default.
    image.png
  5. Click Save.

If none of the sub-category options describe your product, use the Tax Code Selection Helper to find the best matching tax code for your product, and submit the code to FastSpring Support.

Edit a Product Tax Category

  1. In the FastSpring App, navigate to the Products menu and select a product.
  2. At the top of the product detail page, the current tax category code or Unspecified will appear next to Product Category as a link.
  3. Click the tax code link to open the Product Tax Category dialog and select the best options for your product until you see a Tax Code displayed.
  4. Click Save.

Part of the FastSpring platform and operating model means we, as the Selling Party, take on the liability and obligation to collect, file and remit taxes on sales of digital goods. We calculate taxes in real time, based on the end users location and type of product purchased.

Applicable taxes are automatically applied during purchase as required by local tax regulations in the end users country.

Tax Rates

Using industry-leading proprietary and third-party tools, our expert team of in-house specialists monitor tax rates in all regions around the world to ensure you’re fully compliant.

Changes to Tax Rates

Tax Exemptions

Eligible products may qualify for zero or reduced tax rates.

U.S. Tax Exemptions

We launched a sales tax exemption feature in 2020 available to qualifying Sellers where customers can purchase a Seller’s product at zero or reduced tax rates if considered a tax exempt organization.

Tax exemption is added to Storefronts upon request for Sellers who meet certain qualifications. To qualify for any reduced rates, you must provide FastSpring with a valid tax exempt certificate, ID number, and state of issuance. You can submit a copy of your tax exemption certificate or other supporting paperwork issued by the state government via the Seller Support portal.

Upon receipt of your paperwork, FastSpring will refund the sales tax back to the original payment account. Please note that it may take a few business days for the funds to post back to the Consumer’s payment account.

VAT and GST Exemptions

In certain countries, the sale of (Business-to-Business transactions) goods and services qualify for self reporting, or 0% rate with a valid VAT/GST identification number in the country of import.

This is known as a reverse charge mechanism where a Buyer takes on the responsibility to assess and remit tax in lieu of the Seller. In this case, FastSpring will not charge tax but inform the Buyer of the responsibility to self assess and include their VAT/GST ID on the issued invoice. This is not available on sales to individual consumers (Business-to-Customer transactions) and not available in every country.

If a customer forgets or is unable to enter a VAT ID or GST ID at the time of purchase, they can submit a copy of their valid VAT ID or GST ID along with their order reference/order ID within 30 days of the purchase. FastSpring will then issue a credit to the original payment method.

Tax Jurisdictions and Identification Numbers

As of October 31st, FastSpring assesses and collects indirect taxes based on products taxability rules issued by each country in the following international jurisdictions. Most products available through the FastSpring platform will have a standard or zero percent VAT rate applied, subject to the purchaser and country of use. Eligible businesses making digital purchases can avoid paying VAT/GST by providing a valid VAT/GST identification number at the time of purchase.

Collection Jurisdiction FastSpring Identification Number Effective Date Tax Collected Standard Rate Zero/Exempt Rate
Australia ARN 3000 0970 3953 July 1, 2017 GST 10% 0% *
Belarus 102401278 September 1, 2021 VAT 20% 0% *
Canada 76324 2542 July 1, 2021 GST 5% 0% *
     Alberta July 1, 2021 GST 5% 0% *
     British Colombia PST-1445-0210 June 1, 2021 GST + PST 12% 0% *
     Manitoba July 1, 2021 GST 5% 0% *
     New Brunswick July 1, 2021 HST 15% 0% *
     Newfoundland and Labrador July 1, 2021 HST 15% 0% *
     Northwest Territories July 1, 2021 GST 5% 0% *
     Nova Scotia July 1, 2021 HST 15% 0% *
     Nunavut July 1, 2021 GST 5% 0% *
     Ontario July 1, 2021 HST 13% 0% *
     Prince Edward Island July 1, 2021 HST 15% 0% *
     Quebec NR00016829 September 28, 2020 GST + QST 14.975% 0% *
     Saskatchewan 7319775 October 1, 2020 GST + PST 11% 0% *
     Yukon July 1, 2021 GST 5% 0% *
Chile 59.300.600-K June 1, 2021 VAT 19% 0% *
Colombia 700258443 September 30, 2020 VAT 19% 0% *
European Union EU372017645 January 1, 2015 VAT Various 0%
     Austria EU372017645 January 1, 2015 VAT 20% 0%
     Belgium EU372017645 January 1, 2015 VAT 21% 0% *
     Bulgaria EU372017645 January 1, 2015 VAT 20% 0% *
     Croatia EU372017645 January 1, 2015 VAT 25% 0%
     Cyprus EU372017645 January 1, 2015 VAT 19% 0%
     Czech Republic EU372017645 January 1, 2015 VAT 21% 0%
     Denmark EU372017645 January 1, 2015 VAT 25% 0%
     Estonia EU372017645 January 1, 2015 VAT 20% 0%
     Finland EU372017645 January 1, 2015 VAT 24% 0%
     France EU372017645 January 1, 2015 VAT 20% 0%
     Germany EU372017645 January 1, 2015 VAT 19% 0%
     Greece EU372017645 January 1, 2015 VAT 24% 0%
     Hungary EU372017645 January 1, 2015 VAT 27% 0%
     Ireland EU372017645 January 1, 2015 VAT 23%* 0%
     Italy EU372017645 January 1, 2015 VAT 22% 0%
     Latvia EU372017645 January 1, 2015 VAT 21% 0%
     Lithuania EU372017645 January 1, 2015 VAT 21% 0%
     Luxembourg EU372017645 January 1, 2015 VAT 17% 0%
     Malta EU372017645 January 1, 2015 VAT 18% 0%
     Netherlands EU372017645 January 1, 2015 VAT 21% 0%
     Poland EU372017645 January 1, 2015 VAT 23% 0%
     Portugal EU372017645 January 1, 2015 VAT 23% 0%
     Romania EU372017645 January 1, 2015 VAT 19% 0%
     Slovakia EU372017645 January 1, 2015 VAT 20% 0%
     Slovenia EU372017645 January 1, 2015 VAT 22% 0%
     Spain EU372017645 January 1, 2015 VAT 21% 0%
     Sweden EU372017645 January 1, 2015 VAT 25% 0%
Iceland 137842 June 1, 2020 VAT 24% 0% *
India 9917USA290280S1 March 24, 2017 GST 18% 0% *
Indonesia 02.162.942.3-053.000 June 1, 2021 VAT 10% 0% *
Japan 8700150073619 June 24, 2020 CST 10% 0% *
Malaysia 21000020 August 25, 2021 SST 6% Exemption does not apply on B2B
Mexico

BML050628KF3

September 1, 2021 VAT 16% Exemption does not apply on B2B
New Zealand 122-060-896 March 1, 2017 GST 15% 0% *
Norway 2017474 January 1, 2017 VAT 25% 0% *
Russia INN: 9909471211 August 5, 2020 VAT 20% Exemption does not apply on B2B
Saudi Arabia 310755583100003 November 1, 2020 VAT 15% 0% *
Serbia 112641811 September 1, 2021 VAT 20% 0% *
Singapore M90373079G February 1, 2020 GST 7% 0% *
South Africa 4800277289 February 1, 2020 VAT 15% Exemption does not apply on B2B
South Korea 754-80-00583 February 1, 2020 VAT 10% 0% *
Switzerland CHE-407.203.569 MWST April 1, 2013 VAT 7.7% Exemption does not apply on B2B
Taiwan 42528194 May 1, 2017 VAT 5% 0% *
Thailand 0993000457293 September 1, 2021 VAT 7% 0% *
Turkey 1871377951 June 1, 2020 VAT 18% 0% *
United Arab Emirates (UAE) 100442919500003 February 4, 2021 VAT 5% 0% *
United Kingdom 375 3691 65 January 1, 2021 VAT 20% 0% *
Tax Exemption is not currently supported by Digital Invoicing and Interactive Quotes. However, for jurisdictions where there is a * in the Zero / Exempt Rate column, Tax Exemption will be supported by the end of 2021. If the column reads “Exemption does not apply on B2B, ” tax exemption will remain unsupported in that jurisdiction.

If you need to verify any FastSpring Identification number, contact the Mutual Assistance Office (a sub-department of the local VAT collection agency) in your local country.

Additional Disclosures

FastSpring is required to collect and remit Japan’s Consumption Tax to Japan’s National Tax Authority (NTA). On 1 October 2019, an amendment to the Japan Consumption Tax Act took effect for all non-resident or off-shore sellers of digital products and services to consumers in Japan. As merchant of record, FastSpring complies with this legislation. Companies such as FastSpring that are registered in the simplified VAT register VOES Norway are not listed in the online Registry. If you need verification of FastSpring’s VAT number for Norway, you can contact VOES.norway@skatteetaten.no or info@voesnorway.com.

United States Sales Tax

FastSpring complies with the rules and regulations in each state. For gift purchases, sales tax is calculated based on the location of the recipient rather than the purchaser so the purchaser must provide the recipient’s ZIP code at the time of the order.

Seller Accounting and Taxes

The correct way to account for sales that go through FastSpring is to record each payment we send you as Wholesale Sales. To do so, follow the steps outlined below:

  1. In the FastSpring App, navigate to your Account Summary.
  2. Click your balance, shown in blue, to see your Completed Payments.
  3. Record the values as Wholesale Sales in your accounting system.