Patreon adds sales tax, VAT, or other similar taxes to Patron payments in parts of the US and several other countries as required by law. Review which countries sales taxes apply to, here: List of locations where Patreon is collecting sales tax
Patreon handles charging and paying VAT for patrons in many jurisdictions. Over the past couple of years, many countries and many states in the United States have passed similar laws that require “online marketplaces” as well as video and audio streaming platforms to apply sales tax to transactions. Although aimed at the Amazons, Ebays, Netflixes, and Etsys of the world, the way these laws were written and the way they’re being interpreted means that that in many situations they apply to Patreon.
The article and FAQs below will cover all the details about how sales tax applies to Patreon and what you need to know.
Who will pay sales tax?
Whether or not you will pay sales tax/VAT as a patron depends on where you are located, and what benefits the creators you support are providing. The laws and tax rates in effect in your country of residence will be applied whenever you pledge to a creator through Patreon, whether that’s monthly, annual, or per thing, if the benefits offered are taxable in your location.
If Patreon is charging sales tax in your location, an additional line item will be listed on your receipt. Since tax laws and rates vary from country to country and state to state, the amount will be different for different patrons. The tax that Patreon collects as a result of these laws will be paid directly to your local government, and there are no Patreon fees on this portion of your payment.
About sales tax
Should sales tax apply to Patreon? Is supporting a creator on Patreon the same as making a purchase?
Different jurisdictions will consider different things taxable. If you receive a benefit in return for your pledge, it is likely that it will be subject to tax. For example, many places have passed laws that make streaming content taxable so in those places and platforms, streaming video and audio would be subject to tax.
If you are not receiving any benefits, the payment may not be taxable. For example, if you pledged an amount in excess of your set tier price, or you have given a pledge that falls outside of a set tier, your pledge could be deemed to not have any benefits associated with it.
One notable exception is the EU, where we are currently required to apply tax (VAT) all payments regardless of whether the patron is receiving any benefits. We are working with EU tax authorities to secure reductions and exemptions for support-based payments in the future.
It is also useful to remember that different jurisdictions approach digital content differently and what one country deems a benefit may not be consistent with the views of another country.
I thought sales tax was only applicable on tangible goods?
The laws about what is taxable vary by location, but in many places, digital goods and content are now taxable, both downloadable and sometimes streaming.
Can creators absorb the cost of sales tax so that it’s not an additional charge for the patron?
Some creators would prefer this and we wish we could provide this option, but in most jurisdictions, we are not legally allowed to include sales tax in the pricing. It must be broken out as a separate line item and added on top of the base price.
Which benefits on Patreon will be considered taxable?
Outside of the United States it is common for all electronically supplied services and physical goods to be subject to tax. Within the United States, what’s taxable varies greatly by location. As a rough guide, we’ve broadly sorted benefits into 5 categories that are each taxed differently.
Where is Patreon collecting tax, and what are the tax rates?
Patreon collects, files, and remits sales tax (also known as VAT in many countries). We continue to monitor rules that govern the sale of online content and creation to ensure sales and pledges made through Patreon comply with local tax laws. We will continue to add new jurisdictions to this list.
An overview of the standard sales tax rates per jurisdiction can be found below:
* To comply with local laws, there are some countries or regions where we do not charge VAT/GST to patrons who are supporting a creator located in the same country as them. However, if those patrons support creators in other countries, they may still be charged VAT/GST on those pledges if the benefits they receive are taxable in their country. Affected regions: Belarus, Quebec, Australia. For more details about this, please refer to this section: Sales Tax FAQs for Australian creators and patrons
** Please note Canadian provinces may add local tax in addition to the federal rate
*** To comply with local laws, there are some countries or regions where we do not charge VAT/GST to patrons who are supporting a creator located in that same country. However, if those patrons support creators in other countries, they may still be charged VAT/GST on those pledges if the benefits they receive are taxable in their country. Affected regions: Belarus, Quebec, Australia
Europe VAT - Country breakdown
|
Country
|
Value-Added Tax Rate
|
|
Austria
|
20%
|
|
Belgium
|
21%
|
|
Bulgaria
|
20%
|
|
Croatia
|
25%
|
|
Cyprus
|
19%
|
|
Czech Republic
|
21%
|
|
Denmark
|
25%
|
|
Estonia
|
20%
|
|
Finland
|
24%
|
|
France
|
20%
|
|
Germany
|
19%
|
|
Greece
|
24%
|
|
Hungary
|
27%
|
|
Ireland
|
23%
|
|
Italy
|
22%
|
|
Latvia
|
21%
|
|
Lithuania
|
21%
|
|
Luxembourg
|
17%
|
|
Malta
|
18%
|
|
Netherlands
|
21%
|
|
Poland
|
23%
|
|
Portugal
|
23%
|
|
Romania
|
19%
|
|
Slovakia
|
20%
|
|
Slovenia
|
22%
|
|
Spain
|
21%
|
|
Sweden
|
25%
|
|
United Kingdom of Great Britain and Northern Ireland
|
20%
|
United States - State Breakdown
Canada - province/territory breakdown
What is the rate being charged?
Whether you will be taxed, and at what rate, depends on both your location and the types of benefits the creator provides you.
Within the United States, sales tax rates currently range from 4% to 11%. To make things more complex, some locations tax certain things while others don’t (e.g. - “physical goods” vs. “digital downloads” vs. “digital streaming”). Outside of the United States, rates range from 5% to 25% in the countries where Patreon will charge and pay sales tax.
It is important to understand that tax rates and rules change frequently. Patreon ensures that patrons are taxed at the current rate for the patron location and the benefits being provided.
Will more states/countries start requiring Patreon to charge sales tax in the future?
Very likely. We expect more states and countries will attempt to pass similar laws or regulatory changes in the future. We are constantly monitoring our tax obligations, and will keep this page up to date and with as much advance warning as possible.
How will US Sales tax work for a creator that charges ‘per thing’?
