ClickBank And VAT

1) Background 2) Implication for Customers and Rates 3) Implication for Merchants and Affiliates and Rates 4) Calculator 5) Tip!

1. Background

New EU rules for charging Value Added Tax (VAT) came into force on July 1, 2003.

ClickBank has produced a VAT FAQ here

2. Implication for Customers

Customers in the EU now see an additional tax on their purchase, the rate varying within each country. On July 1, 2003 these rates were as follows:

AT	Austria	20%
BE	Belgium	21%
DE	Germany	16%
DK	Denmark	25%
ES	Spain	16%
FI	Finland	22%
FR	France	19.6%
GB	United Kingdom	17.5%
GR	Greece	18%
IE	Ireland	21%
IT	Italy	20%
LU	Luxembourg	15%
NL	Netherlands	19%
PT	Portugal	19%
SE	Sweden	25%

You can use the calculator below to determine the total cost of a product after VAT had been added.

3. Implication for Merchants and Affiliates

• For an EU purchase, the merchant profit and the affiliate commission are slightly lower.

  This is because ClickBank transaction fees are applied first to the total amount and the tax is then deducted from the remainder. The merchant/affiliate share is therefore reduced by (7.5% X Vat Rate) of the product price. You can check the merchant/affiliate profit using the calculator below.

  So, using the lower and upper ranges of VAT (15% and 25%) the deduction ranges from 1.125% to 1.875% .

  Example: for a $50 product the merchant/affiliate share is reduced by $0.56 for 15% VAT and $0.93 for 25% VAT.

• Across all purchases (EU and non-EU) you can expect an average decrease in profits of 0.37% assuming these figures
  - average VAT = 20%
  - percentage of EU purchases = 25%

4. Calculator

P.S. You may want to return to this page often to use the calculator: click here to Bookmark this page.

Enter Product Price: $ Enter Commission Rate:    % Enter VAT Rate:   0% AT 20% BE 21% DE 16% DK 25% ES 16% FI 22% FR 19.6% GB 17.5% GR 18% IE 21% IT 20% LU 15% NL 19% PT 19% SE 25% Customer payment = $ Affiliate Commission = $ Merchant Profit = $

5. Tip!

1. You may wish to warn customers of the possibility of tax before they reach the order form. You could, for example, add the following below the price on your sales page

Note: EU Customers will have VAT added.