Introduction For hosts on Boutique, understanding and correctly managing Value Added Tax (VAT) is crucial, especially for those in the European Union (EU). VAT impacts your earnings and the way Boutique calculates commissions. This guide explains how VAT is applied in different scenarios and highlights the importance of your residency address in determining VAT applicability.
The importance of your residency address: Your residency address plays a pivotal role in determining VAT applicability. Ensure your address is accurately updated in Boutique’s system, as it affects whether VAT is collected on our commission.
Scenario 1: Providing a VAT number
Example: Maria, a host in Spain, has a valid VAT number which she adds to her Boutique account. Since she has provided this number, Boutique does not collect VAT on its commission from her earnings.
Process: To add your VAT number, navigate to ‘Account Settings’ → ‘Taxes’ → ‘Add VAT Number’. Boutique will verify this information.
Scenario 2: Without a VAT number
Example: John, a host in Italy, does not provide a VAT number. Consequently, Boutique applies the Italian VAT rate to its commission from his earnings.
Process: Hosts without a VAT number are subject to VAT on Boutique's commission. The rate is based on the host’s tax residency as per the address provided in their account.
External resources for VAT information:
Your Local Tax Authority’s Website
FAQ Section:
Q: How do I update my residency address?
A: Go to ‘Account Settings’ → ‘Personal Information’ → Update your address details.
Q: What if I later acquire a VAT number?
A: You can add it in your account settings. Boutique will then cease to collect VAT on its commission from your future earnings.
Conclusion Understanding and managing VAT is a key aspect of hosting on Boutique. Your residency address and VAT number status directly influence how VAT is applied to Boutique's commission. Stay informed about your local VAT regulations and keep your account details up to date to ensure compliance and accurate earnings calculation