ClickBank And VAT

1. Background

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

ClickBank have 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:

ATAustria20%
BEBelgium21%
DEGermany16%
DKDenmark25%
ESSpain16%
FIFinland22%
FRFrance19.6%
GBUnited Kingdom15%
GRGreece18%
IEIreland21%
ITItaly20%
LULuxembourg15%
NLNetherlands19%
PTPortugal19%
SESweden25%

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

3. Implication for Vendors and Affiliates

  • For an EU purchase, the vendor 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 vendor/ affiliate share is therefore reduced by (7.5% X Vat Rate) of the product price. You can check the vendor/ affiliate profit using the calculator below.
    Note: the 7.5% figure is replaced with 9.9% for a recurring product priced at under $40.

    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 vendor/ 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:  



Customer payment =
$
Affiliate Commission = $
Vendor Profit = $

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5. Tips

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.

2. There is no easy way at ClickBank to extract useful accounting data on past sales. There are however tools which can provides extensive reports on all your ClickBank sales, either as a vendor or affiliate, over any period. Check out ClickBank Stats.

 

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