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About VAT and Sales Tax

Overview

FastSpring takes care of the collection of taxes on all purchases, and you do not have to do anything relating to sales tax or VAT (value added tax). Legally speaking, FastSpring is considered the merchant of record, so we follow all laws and regulations as if the sale were made from California in the United States.

Overview

FastSpring takes care of the collection of taxes on all purchases, and you do not have to do anything relating to sales tax or VAT (value added tax). Legally speaking, FastSpring is considered the merchant of record, so we follow all laws and regulations as if the sale were made from California in the United States.

However, most sales in the EU and certain other geographic locations require us to collect and pay VAT to the appropriate authorities. VAT and tax rates differ by country, and your end customers in the EU (and some of the other locations) can enter their VAT ID as part of the checkout process if they are exempt from payment of the tax.

FastSpring is a reseller. A side effect of this is that FastSpring becomes the merchant and seller of record for the sale of your products. We collect all applicable taxes from the customers, and we report and pay those tax to the appropriate taxation authorities. You do not need details of this reporting. The only thing that you need to do is record the payments we make to you as wholesale sales. 
 

 

 

Where Does FastSpring Collect Taxes?
 

U.S. Sales Tax

Some sales in certain states may be subject to sales tax. Sales of physical products shipped to residents in California, and sales of digital products, subscriptions, and physical products will incur a sales tax for residents in all U.S. states and regions except for Alaska, Delaware, Montana, New Hampshire, Oregon, AA, AE, AP, AS, and Puerto Rico. FastSpring complies with the rules and regulations in each state. Recent changes have been made in reaction to the Wayfair Act.

 Note

For gift purchases, sales tax is calculated based on the location of the recipient rather than the purchaser. Hence, the purchaser must provide the recipient's ZIP code at the time of the order.

Regarding Sales Tax Exemption

If a U.S. customer is buying on behalf of an organization that is exempt from paying state and local sales taxes, FastSpring can refund the sales tax after the purchase has been completed.  At this time, there is no way to prevent the sales tax from being collected on the order initially.

Customers can submit a copy of their tax exemption certificate or other supporting paperwork issued by the state government at https://questionacharge.com along with their order reference / order ID, and our support team will refund the sales tax back to the original payment account.

From the time our support team replies to a ticket with a tax refund request, it can take a few business days for the funds to post back to the customer's payment account.

 

Frequently Asked Questions About U.S. Sales Tax

The U.S. Supreme Court passed the Wayfair Ruling on June 21, 2018, allowing all states to set sales tax laws on remote sales based on a series of requirements that establish economic nexus. Following this ruling, 43 states released new or updated taxation laws, with seven states planning on making updates to taxation laws as of October 1st, 2019.

As a Merchant of Record, FastSpring is responsible for managing all tax calculation, collection, and remittance on transactions processed by the FastSpring platform as required by evolving U.S. state and global regulations. In accordance with the recent changes to the U.S. taxation for online sales determined by the Supreme Court Wayfair ruling, FastSpring made updates to sales tax collection in the platform.

FastSpring takes responsibility for collecting and remitting sales taxes on behalf of our sellers. We take the ever-changing tax law complexity off of your hands, so you can focus on what you do best—building great software.
 
  1. What is the South Dakota v. Wayfair, Inc. case?
    The U.S. Supreme Court case focused on sales tax application for internet retailers who sell into specific states without any physical presence in the state. The Supreme Court ruled in favor of South Dakota which granted individual states the authority to impose sale taxes on out-of-state transactions. The ruling overturned the Quill Corp. v. North Dakota (1992) ruling which barred states from collecting sales tax on Internet sales unless those retailers had a physical presence in the taxing state.
     
  2. What about U.S. sales tax is changing?
    The US Supreme Court ruled in favor of the state in South Dakota v. Wayfair, Inc. on June 21, 2018, allowing all states to set sales tax laws (i.e. economic nexus). This means each US state can pass a law requiring ecommerce merchants to collect and remit sales tax on purchases. So far, a total of 43 states have released new or updated laws following the Supreme Court ruling, and seven states plan to enact their own new or updated tax laws as of October 1st, 2019.
     
  3. What does "economic nexus" mean?
    Economic nexus refers to a tax collection obligation that is imposed on businesses that reach a specific level of economic activity within a state. It is based entirely on sales revenue, transaction volume, or a combination of both. As with many sales tax laws, economic nexus criteria may vary by state, but all are designed to level the playing field between out-of-state sellers and brick-and-mortar businesses.
     
  4. Who is impacted by the South Dakota economic nexus law?
    The ruling applies to remote sellers (online and off-line) that are not currently registered with a state and meet the threshold requirements. As a Merchant of Record on the behalf of thousands of sellers, FastSpring is legally responsible to collect and remit sales tax in accordance with the economic nexus requirements set by each state.
     
  5. My buyers weren't taxed before, why are they being taxed now?
    To meet the new requirements for individual state tax laws, the FastSpring platform automatically charges sales tax based on the location of the buyer. Therefore, depending on the location of the buyer, they will be charged sales tax in accordance with the new sales tax laws determined by the state.
     
  6. The ruling indicates that laws are changing soon, but there is no timeframe. When do these new laws take effect?
    There is no set timeline for enacting new sale tax laws in accordance with the Wayfair ruling as it is determined on a state by state basis. FastSpring is responsible for maintaining compliance with the evolving sales tax laws as they are released, and adjust the platform accordingly.
     
  7. My buyer is tax-exempt in the U.S. Can my buyer receive a tax refund?
    Yes, a buyer with a U.S. state tax exemption can receive a refund. In order to receive a refund, your buyer must submit their government tax exemption document via https://questionacharge.com along with their order information.
 
  • Should I change my pricing model in reaction to these changes?
    At this time, we recommend you do not adjust your pricing model. State tax laws are frequently changing and it is difficult to know whether adjusting a pricing model will be beneficial to your business.
 

Taxes on Certain Non-U.S. Transactions

 

CountryCountry CodeTax Rate %Tax ClassFastSpring TaxIDExemption Method (enter ID, submit exemption form, None)

Local Tax Name

Subscriptions

Taxable Products:

Digital/Physical/Service

AustraliaAU10GSTARN 3000 0970 3953Enter Valid GST IDGoods and Services TaxYes (Recurring and Non-Recurring)

Digital/Service

For Physical Goods - Buyer pays import Tax

AustriaAT20VATEU826012240Enter Valid VAT IDUmsatzsteuerYes (Recurring and Non-Recurring)Digital/Service
BelgiumBE21

VAT

EU826012240Enter Valid VAT ID

Belasting over de toegevoegde waarde (BTW)

Taxe sur la valeur ajoutée (TVA)

Yes (Recurring and Non-Recurring)Digital/Service
BulgariaBG20VATEU826012240Enter Valid VAT IDDanak varhu dobavenata stoinost (DDS)Yes (Recurring and Non-Recurring)Digital/Service
CroatiaHR25VATEU826012240Enter Valid VAT IDPorez na dodanu vrijednost (PDV)Yes (Recurring and Non-Recurring)Digital/Service
CyprusCY19VATEU826012240Enter Valid VAT IDValue Added TaxYes (Recurring and Non-Recurring)Digital/Service
Czech RepublicCZ21VATEU826012240Enter Valid VAT IDDan z pridane hodnotyYes (Recurring and Non-Recurring)Digital/Service
DenmarkDK25VATEU826012240Enter Valid VAT IDMerværdiafgiftsloven (Momsloven)Yes (Recurring and Non-Recurring)Digital/Service
EstoniaEE20VATEU826012240Enter Valid VAT IDKäibemaksYes (Recurring and Non-Recurring)Digital/Service
FinlandFI24VATEU826012240Enter Valid VAT IDArvonlisäveroYes (Recurring and Non-Recurring)Digital/Service
FranceFR20VATEU826012240Enter Valid VAT IDTaxe sur la valeur ajoutée (TVA)Yes (Recurring and Non-Recurring)Digital/Service
GermanyDE19VATEU826012240Enter Valid VAT IDUmsatzsteuer/MehrwertsteuerYes (Recurring and Non-Recurring)Digital/Service
GreeceGR24VATEU826012240Enter Valid VAT IDForos prostithemenis aksias (FPA)Yes (Recurring and Non-Recurring)Digital/Service
HungaryHU27VATEU826012240Enter Valid VAT IDÁltalános forgalmi adóYes (Recurring and Non-Recurring)Digital/Service
IndiaIN18Sales and Service Tax9917USA29028OS1Enter Valid GST ID

Goods and Services Tax (GST)

NOTE: We moved India from Sales and Service Tax to GST on July 1st, 2017.

Yes (Recurring and Non-Recurring)Digital/Service
IrelandIE23VATEU826012240Enter Valid VAT IDValue Added TaxYes (Recurring and Non-Recurring)Digital/Service
ItalyIT22VATEU826012240Enter Valid VAT IDImposta sul valore aggiunto (IVA)Yes (Recurring and Non-Recurring)Digital/Service
JapanJP10CT00062No reverse charge. No exemption.ShouhizeiYes (Recurring and Non-Recurring)Digital/Service
LatviaLV21VATEU826012240Enter Valid VAT IDPievienot?s vert?bas nodoklis (PVN)Yes (Recurring and Non-Recurring)Digital/Service
LithuaniaLT21VATEU826012240Enter Valid VAT IDPridetines vertes mokestisYes (Recurring and Non-Recurring)Digital/Service
LuxembourgLU17VATEU826012240Enter Valid VAT IDTaxe sur la valeur ajoutée (TVA)Yes (Recurring and Non-Recurring)Digital/Service
MaltaMT18VATEU826012240Enter Valid VAT IDIt-taxxa fuq il-valur mizjudYes (Recurring and Non-Recurring)Digital/Service
NetherlandsNL21VATEU826012240Enter Valid VAT IDBelasting over de toegevoegde waarde (BTW)Yes (Recurring and Non-Recurring)Digital/Service
New ZealandNZ15GST122-060-896Enter Valid GST IDGoods and Services TaxYes (Recurring and Non-Recurring)Digital/Service
NorwayNO25VAT2017474Enter Valid VAT IDMerverdiavgift

Yes (Recurring and Non-Recurring)

 

Digital/Service

 NOTE

The 350 NOK threshold only applies to physical goods, for which we do not collect VAT.
PolandPL23VATEU826012240Enter Valid VAT IDPodatek od towarow i uslugYes (Recurring and Non-Recurring)Digital/Service
PortugalPT23VATEU826012240Enter Valid VAT IDImposto sobre o valor acrescentado (IVA)Yes (Recurring and Non-Recurring)Digital/Service
RomaniaRO19VATEU826012240Enter Valid VAT IDTaxa pe valoarea adaugataYes (Recurring and Non-Recurring)Digital/Service
Slovak RepublicSK20VATEU826012240Enter Valid VAT IDDa? z pridanej hodnoty (DPH)Yes (Recurring and Non-Recurring)Digital/Service
SloveniaSI22VATEU826012240Enter Valid VAT IDDavek na dodano vrednost (DDV)Yes (Recurring and Non-Recurring)Digital/Service
South AfricaZA15VAT4800277289NoneValue Added TaxYes (Recurring only)None
South KoreaKR10VAT754-80-00583Enter Valid VAT IDBoo-ga-ga-chi-seYes (Recurring and Non-Recurring)Digital/Service
SpainES21VATEU826012240Enter Valid VAT IDImpuesto sobre el Valor Añadido (IVA)Yes (Recurring and Non-Recurring)Digital/Service
SwedenSE25VATEU826012240Enter Valid VAT IDMervärdesskatt (Moms)Yes (Recurring and Non-Recurring)Digital/Service
SwitzerlandCH7.7VATCHE-407.203.569 MWSTNone

Mehrwertsteuer (MWST)

Taxe sur la valeur ajoutée (TVA)

Imposta sul valore aggiunto (IVA)

Yes (Recurring and Non-Recurring)Digital/Service
TaiwanTW5VAT42528194Enter Valid VAT IDValue Added TaxYes (Recurring and Non-Recurring)Digital/Service
United KingdomGB20VATEU826012240Enter Valid VAT IDValue Added TaxYes (Recurring and Non-Recurring)Digital/Service

VAT and GST Exemption

Customers that are exempt from paying VAT or GST can prevent tax from being collected on their order by providing their valid VAT ID or GST ID at the time of purchase. For those providing a valid ID, no tax will be collected, and the ID will be included on the invoice we provide upon purchase completion.

VAT / GST Refunds

In case a customer neglects or is unable to enter a VAT ID or GST ID at the time of the purchase, please instruct the customer to contact us via https://questionacharge.com with the order reference / ID and the valid VAT ID or GST ID. Our buyer support team will promptly issue a refund for the tax that was collected on the order, back to the original payment method.

 

Verifying FastSpring's Local Tax Registration


FastSpring's EU VAT Number EU826012240

Many companies have a VAT that begins with the two letter language ISO 639-1 code indicating where their company is located. FastSpring's VAT number is EU826012240. The number begins with "EU" because FastSpring is located in the United States, not in a European Union member state.

Our VAT number cannot be verified by the usual VAT validation services, but would have to be verified by the Mutual Assistance Office (a sub-department of the local VAT collection agency) in each EU country from a database available to those offices.

 

Australia Goods and Services Tax

FastSpring collects Goods and Services Tax (GST) for sales of digital products and subscriptions made to customers located in Australia.

Australia GST Exemption

Businesses making digital purchases can be exempted from GST collection by providing their valid GST ID at the time of purchase. For those providing a GST ID, no GST will be charged, and the GST ID will be included on the invoice we provide at purchase completion.

FastSpring's Tax ID for Australia

Our tax ID for Australia is ARN 3000 0970 3953.

 

India Goods and Services Tax

FastSpring collects Goods and Services Tax (GST) for sales of digital products and subscriptions made to customers located in India.

(Note:  We changed from collecting Sales and Service Tax to GST on July 1, 2017.)

India GST Exemption

Businesses making digital purchases can be exempted from GST collection by providing their valid GST ID at the time of purchase. For those providing a GST ID, no GST will be charged, and the GST ID will be included on the invoice we provide at purchase completion.

FastSpring's Goods and Services Tax Number for India

Our tax ID for India is 9917USA29028OS1.

(Note:  Our tax ID for Sales and Service Tax was NTT0571USASR030.)

 

Japan's Consumption Tax

On October 1, 2019, an amendment to Japan’s Consumption Tax Act took effect for all non-resident or off-shore sellers of digital products and services to consumers in Japan. As your merchant- and seller-of-record, FastSpring has implemented changes to comply with this legislation. We began charging, collecting and remitting the new 10% consumption tax in Japan for off-shore sales of digital products and subscriptions to Japanese consumers.  This new tax rate will merely be assessed and added on to the total product amount. 

FastSpring's NTA Number for Japan

FastSpring is required to collect and remit Japan's Consumption Tax to Japan's National Tax Authority (NTA). Our NTA registration number for Japan is 00062.

 

New Zealand GST

FastSpring collects GST for sales of digital products and subscriptions made to customers located in New Zealand.

New Zealand GST Exemption

Businesses making digital purchases can be exempted from GST collection by providing their valid GST ID at the time of purchase. For those providing a GST ID, no GST will be charged, and the GST ID will be included on the invoice we provide at purchase completion.

FastSpring's GST Number for New Zealand

Our IRD Number for New Zealand is is 122-060-896.

 

Norway VAT

When a company&'s yearly revenue in Norway exceeds a certain threshold, that company is required by law to collect and pay VAT in Norway. FastSpring has exceeded this minimum threshold, so sales of digital products and subscriptions made to customers located in Norway will have VAT.

Norwegian businesses making digital purchases can be exempted from VAT collection by providing their valid VAT ID at the time of purchase. For those providing a VAT ID, no VAT will be charged, and the VAT ID will be included on the invoice we provide at purchase completion.

FastSpring's VAT Number for Norway

Our VAT number for Norway is 2017474.

Verification of VAT 2017474

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

 

South Africa VAT

FastSpring collects VAT for sales of recurring subscriptions made to customers located in South Africa. There is no way to be exempt from VAT in South Africa for these sales.

FastSpring's VAT Number for South Africa

Our VAT number for South Africa is 4800277289.

 

South Korea VAT

FastSpring collects VAT for sales of digital products and subscriptions made to customers located in South Korea.

South Korea VAT Exemption

Businesses making digital purchases can be exempted from VAT collection by providing their valid VAT ID at the time of purchase. For those providing a VAT ID, no VAT will be charged, and the VAT ID will be included on the invoice we provide at purchase completion.

FastSpring's VAT Number for South Korea

Our VAT number for South Korea is 754-80-00583.

 

Switzerland VAT

When a company's yearly revenue in Switzerland exceeds a certain threshold, that company is required by law to collect and pay VAT in Switzerland. FastSpring has exceeded this minimum threshold, so sales made to customers located in Switzerland will have VAT.  There is no way to be exempt from VAT in Switzerland for these sales.

FastSpring's VAT Number for Switzerland

Our VAT Number for Switzerland is CHE-407.203.569 MWST.

 

Taiwan VAT

FastSpring collects VAT for sales of digital products and subscriptions made to customers located in Taiwan.

Taiwan VAT Exemption

Businesses making digital purchases can be exempted from VAT collection by providing their valid VAT ID at the time of purchase. For those providing a VAT ID, no VAT will be charged, and the VAT ID will be included on the invoice we provide at purchase completion.

FastSpring's VAT Number for Taiwan

Our VAT number for Taiwan is 42528194.


 

Your Personal or Company 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." It is legally the same scenario as if you made widgets, sent them to Wal-mart to sell, and they pay you wholesale. You do not record the total sales Wal-mart made or record Wal-mart's profit margin as an expense. Instead, you would simply record the money Wal-mart sent you as "wholesale sales."

Your accounting and taxes for the sales through FastSpring should be done the same way. From a tax standpoint, the only thing you need to do is go to Manage Account » Account Summary.

Click on your Balance, which is shown in blue, to see your Completed Payments. Record the values as Wholesale Sales in your accounting system. 

Although not required by FastSpring, some clients, especially those located in Germany, open a support ticket for each payment and attach an invoice, showing the amount of their wholesale sales. A sample invoice is shown below.

generic invoice example

 

You can also download a sample invoice in the XLS (Excel spreadsheet) format from the following link:  Generic Invoice.xls

 

EU Changes in 2015

On January 1, 2015 major changes were made to the VAT (value added tax) in the European Union. Before 2015, VAT was based on the location of the business. It is now based on the location of the customer. FastSpring detects each customer's location via IP address. which is the suggested method, and adds the correct amount of VAT, if applicable. You do not need to do anything; we have you covered.

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