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Tax regulations

Overview

As your dedicated provider of commerce services, it is 2Checkout's responsibility to stay up to date on worldwide financial and legal requirements to make sure you benefit from a seamless and fully compliant international buying and selling experience. 

European VAT rates

EUropean Union countries

Country Taxable products/services Transaction type VAT rate Applicability (based on merchant location)

Austria

All B2C 

20%

All merchants

Belgium

All B2C 

21%

All merchants

Bulgaria

All B2C 

20%

All merchants

Croatia

All B2C 

25%

All merchants

Cyprus

All B2C 

19%

All merchants

Czech Republic

All B2C 

21%

All merchants

Denmark

All B2C 

25%

All merchants

Estonia

All B2C 

20%

All merchants

Finland

All B2C 

24%

All merchants

France

All B2C 

20%

All merchants

Germany***

All B2C 

16%

All merchants

Greece

All B2C 

24%

All merchants

Hungary

All B2C 

27%

All merchants

Ireland***

All B2C 

21%

All merchants

Italy

All B2C 

22%

All merchants

Latvia

All B2C 

21%

All merchants

Lithuania

All B2C 

21%

All merchants

Luxembourg

All B2C 

17%

All merchants

Malta

All B2C 

18%

All merchants

Netherlands

All B2C and B2B*

21%

All merchants

Poland

All B2C 

23%

All merchants

Portugal

All B2C 

23%

All merchants

Romania

All B2C 

19%

All merchants

Slovakia

All B2C 

20%

All merchants

Slovenia

All B2C 

22%

All merchants

Spain

All B2C 

21%

All merchants

Sweden

All B2C 

25%

All merchants

United Kingdom**

All B2C 

20%

All merchants

* Avangate BV dba 2Checkout is registered in the Netherlands, impacting the VAT calculations for B2B transactions.

** Post Brexit, we will start collecting VAT through our newly-registered UK ID. Till then we continue to collect VAT from the UK via our VAT ID in the Netherlands.

***To encourage more people to buy in the context of the COVID-19 crisis, Germany cut the VAT rates from 19% to 16% for a limited period of time, from July 1st to December 31st, 2020. Ireland is applying a similar economic measure starting September 1st through February 28th, 2021, cutting VAT from 23% to 21%.

VAT exemption

VAT-registered business customers based in the European Union can pay for their orders while being charged according to the VAT ID they provide. VAT ID support is available for all 2Checkout purchase flows, including Express PayPal Checkout.

Non-European Union countries

Sales made by Avangate BV dba 2Checkout to customers in Iceland, Norway, and Switzerland are subject to each country’s VAT rate. Non-EU companies providing electronic services to customers in multiple EU countries are encouraged to use MOSS (Mini One-Stop-Shop) to collect and distribute VAT in an easier manner.

Country Taxable products/services Transaction type VAT rate Applicability (based on merchant location)
Iceland All B2C and B2B 24% All merchants
Moldova All B2C 20% All merchants
Norway All B2C and B2B* 25% All merchants
Russia All B2C and B2B 20% All merchants
Serbia  All

B2C

B2B**

20%

25%

All merchants
Switzerland All B2C and B2B 7.7% All merchants
Turkey All B2C and B2B 18% All merchants

* Norwegian companies with valid TAX ID’s are tax exempt.

** Serbian companies are charged with 5% for the withholding tax, in addition to the 20% standard tax rate.

Non-European countries

Country Taxable products/services Transaction type Tax rate Applicability (based on merchant location)

Australia

All

B2C and B2B**

10%

All merchants

Bahrain All B2C  5% All merchants
Belarus All B2C  20% All merchants
British Columbia  (Province of Canada) All B2C and B2B 7% All merchants
Chile All B2C 19% All merchants
Quebec (Province of Canada)

All 

B2C and B2B** 9.975%   All merchants
Colombia All B2C 19% All merchants

India

All

B2C and B2B*

18%

Foreign merchants

Japan All B2C and B2B 10% All merchants
Malaysia All B2B and B2C 6% All merchants

New Zealand

All

B2C and B2B**

15%

All merchants

Saudi Arabia All B2C and B2B 15% All merchants

Saskatchewan

(Province of Canada)

All B2C 6% All merchants
Singapore All B2C  and B2B** 7% All merchants

South Africa

All 

B2C and B2B

15%

All merchants

South Korea All B2C 10% All merchants 

Taiwan

All

B2C 

5%

Foreign merchants

United Arab Emirates All B2C and B2B 5% All merchants

* Indian companies that provide GSTIN are tax exempt.

** Australian, New Zealand, Canadian (Quebec only), and Singapore companies that provide a valid VAT/GST ID are tax exempt. If the valid VAT/GST ID is not provided, the invoice will be issued with Sales tax. For Singapore and New Zealand, 2Checkout is not required to validate the VAT-ID documents provided by shoppers.

Taxes in Argentina

Argentina has made recent changes to its tax laws which impact purchases by Argentine shoppers. Merchants should be aware of these tax costs so they can adjust pricing (if they so choose) or at least be aware of the competitive landscape of selling in Argentina.

Argentina places the responsibility for applying VAT and other taxes on banks and credit card processors and not on selling merchants. Therefore, 2Checkout will not issue invoices showing tax collected from Argentine shoppers. Instead, the Argentine shoppers' bank will apply an appropriate tax levy on top of 2Checkout charges for merchandise purchased. The bank then remits the tax to the Argentine Tax Authority.

On September 16, 2020, Argentina passed a new tax measure that applies an additional 35% tax on top of existing VAT and other taxes. As such, an item purchased for ARS 100 will ultimately cost the shopper ARS 164.

US Sales Tax

Avangate BV dba 2Checkout collects sales tax for a number of US states, however, tax rate varies depending on the address of the shopper.

State Order with Backup Media Order without Backup Media
Alabama

YES

(for the full value of the order)

YES

(for the full value of the order)

Arizona

YES

(for the full value of the order)

YES

(for the full value of the order)

Arkansas

YES

(for the full value of the order)

NO

California

YES

(for the full value of the order)

NO

Colorado

YES

(for the full value of the order)

NO

Connecticut

YES

(for the full value of the order)

YES

(for the full value of the order)

Florida

YES

(for the full value of the order)

NO

Georgia

YES

(for the value of Backup Media if its price is stated separately)

NO

Hawaii

YES

(for the full value of the order)

YES

(for the full value of the order)

Idaho

YES

(for the full value of the order)

NO

Illinois

YES

(for the full value of the order)

YES

(for the full value of the order)

Indiana 

YES

(for the full value of the order)

YES

(for the full value of the order)

Iowa

YES

(for the full value of the order)

YES

(for the full value of the order)

Kansas

YES

(for the full value of the order)

YES

(for the full value of the order)

Kentucky

YES

(for the full value of the order)

YES

(for the full value of the order)

Louisiana

YES

(for the full value of the order)

YES

(for the full value of the order)

Maine

YES

(for the full value of the order)

YES

(for the full value of the order)

Maryland

YES

(for the full value of the order)

NO

Massachusetts

YES

(for the full value of the order)

YES

(for the full value of the order)

Michigan

YES

(for the full value of the order)

YES

(for the full value of the order)

Minnesota

YES

(for the full value of the order)

YES

(for the full value of the order)

Mississippi

YES

(for the full value of the order)

YES

(for the full value of the order)

Nebraska

YES

(for the full value of the order)

YES

(for the full value of the order)

Nevada

YES

(for the full value of the order)

NO

New Jersey

YES

(for the full value of the order)

YES

(for the full value of the order)

New Mexico

YES

(for the full value of the order)

YES

(for the full value of the order)

New York

YES

(for the full value of the order)

YES

(for the full value of the order)

North Carolina

YES

(for the full value of the order)

YES

(for the full value of the order)

North Dakota

YES

(for the full value of the order)

YES

(for the full value of the order)

Ohio

YES

(for the full value of the order)

YES

(for the full value of the order)

Oklahoma

YES

(for the full value of the order)

NO

Pennsylvania

YES

(for the full value of the order)

YES

(for the full value of the order)

Puerto Rico

YES

(for the full value of the order)

YES

(for the full value of the order)

Rhode Island

YES

(for the full value of the order)

YES

(for the full value of the order)

South Carolina

YES

(for the full value of the order)

NO

South Dakota

YES

(for the full value of the order)

YES

(for the full value of the order)

Tennessee

YES

(for the full value of the order)

YES

(for the full value of the order)

Texas*

YES

(for the full value of the order)

YES

(for the full value of the order)

Utah

YES

(for the full value of the order)

YES

(for the full value of the order)

Vermont

YES

(for the full value of the order)

YES

(for the full value of the order)

Virginia

YES

(for the full value of the order)

NO
Washington

YES

(for the full value of the order)

YES

(for the full value of the order)

Washington D.C.

YES

(for the full value of the order)

YES

(for the full value of the order)

West Virginia

YES

(for the full value of the order)

YES

(for the full value of the order)

Wisconsin

YES

(for the full value of the order)

YES

(for the full value of the order)

Wyoming

YES

(for the full value of the order)

YES

(for the full value of the order)

*A flat sales tax rate of 8% is applied to all transactions in Texas.

Frequently Asked Questions

  1. How is the VAT calculated for orders where I ship a CD and an electronic license key?
    • CDs are a backup media, an additional service for the main product, thus they follow the same regime as the main product. Consequently, Avangate BV dba 2Checkout applies the same VAT as to the main transaction of the license.
  2. It appears that the place of supply is calculated differently for phone consulting and software. Do I have to tell you what kind of service I am selling when I bill someone?
    • Yes, you should provide an accurate description of your products in the Order Form/Contract so that we can represent it correctly when we resell them.
  3. How does 2Checkout calculate the VAT/sales tax value for all orders?
    • 2Checkout calculates the VAT/sales tax value based on the delivery address details provided by the customer in the shopping cart.
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