As a marketplace intermediary, Patreon may have sales tax and VAT* obligations related to the services fees it charges to its Creators. Such obligations usually depend on the types of intermediary rules applicable in a particular jurisdiction, the type of service, the location and business status of the Creator, and the specific rules in each jurisdiction related to the place of taxation and any relevant exemptions.
With the launch of Commerce on the platform in June 2023, Patreon will start to collect applicable indirect taxes on services provided to its Creators on a tax exclusive basis. The application of taxes on top of the Creator fees will take place in phases to allow Patreon and Creators to ensure the best possible tax compliance.
Which countries will Patreon apply tax on fees on?
Patreon has obligations to collect tax on fees in certain US and non-US locations, which are generally aligned to those where underlying marketplace sales are also subject to tax. Fee-specific tax obligations will, however, depend on a number of factors, as mentioned above. Refer to our article Patreon's Sales Tax Requirements for details regarding relevant locations.
How will tax apply and be collected?
Indirect taxes on creator fees are generally expected to apply per the rates and rules in the Creator’s location. Head over to our article Patreon's Sales Tax Requirements, for information on tax rates that apply in various locations.
- In the United States, where tax is applicable depending on the state, Patreon will generally account for such tax.
- In non-US jurisdictions, the person liable to account for the tax will, in most cases, depend on the business status of the Creator. In these cases, Patreon will only need to collect tax where the Creator does not provide sufficient valid proof that they are a business customer according to the local rules.
Where you provide Patreon with a valid VAT ID, and Patreon does not charge VAT on its fees to you, it will be your responsibility to assess whether you should account for VAT on services acquired from Patreon. Also, note that in certain countries (e.g., South Africa, Switzerland, Indonesia, Malaysia) Patreon will generally charge VAT irrespective of your VAT ID registration status. Irrespective, we encourage you to add your relevant VAT ID to your account to enable overall tax document and compliance obligations.
Which fees are subject to tax?
As a general rule, where applicable, all fees will be subject to tax unless an exemption or exception is found to be relevant in a particular location, for a particular fee, and/or for a particular scenario.
What information should be provided by Creators to Patreon?
Application of tax and related tax compliance obligations will depend on the location of the Creator and, often, in non-US locations, on Creator’s business status. For the best application of tax, we encourage you to add the required location details in your Patreon account, as well as your relevant VAT ID in the available box of the W8 form included in the Tax section of your Patreon account.
For information on how to add your VAT ID to the W8 form and a list of relevant VAT IDs, please refer to our Help Center article Providing your VAT ID number. When you are providing your VAT ID, we suggest you review and confirm your business legal address in the same form, which will be our first point of reference for location details in the application of tax. Note also that we expect the VAT ID you share will match the location details provided.
In the absence of a valid VAT ID, Patreon may need to charge VAT/GST to a non-US Creator. VAT/GST thus charged may not be recoverable for a Creator; please consult with your local tax advisor in this regard.
How will tax be charged and communicated?
Where applicable, sales taxes or VAT will be applied on top of the fees charged to a Creator. For example, a Creator located in Australia makes a sale of digital content to a member in the US. The sale to the member is for $10, and the Creator has not provided Patreon with a valid tax registration number.
| Purchase payment amount | $10.00 |
| Creator fee (5%) | $0.50 |
| GST at 10% applicable to fee (charged by Patreon and remitted to the relevant tax authority) | $0.05 |
| Cash to Creator | $9.45 |
Tax will be applied at the time of each member transaction when fees are assessed and retained by Patreon. Taxes thus charged will be separately shown in your creator earnings dashboard.
Phased application of tax on fees
Patreon will apply taxes on its services fees in phases to ensure relevant information is available and processes are in place to allow for the best application of tax. Where applicable, you should expect to see tax applied on top of your Digital Commerce related fees at some point during 2023. Note that taxes, once implemented, will be collected prospectively only.
*In this article (and generally on the Patreon platform), any reference to VAT includes reference to Value-Added Tax (“VAT”), Goods and Services Tax (“GST”), Harmonized Sales Tax (“HST”), and any other similar tax or indirect tax imposed in non-US jurisdictions, as relevant. Sales and use tax (“sales tax” or “SUT”) refers to sales taxes applicable in the United States. Together VAT and sales tax will be referred to as indirect taxes or transaction taxes.
