How are sales tax and VAT handled during a purchase at 2BrightSparks web-store?
Beginning July 2016, 2BrightSparks uses FastSpring to process payments on our web store. FastSpring is the merchant-of-record for all 2BrightSparks software sales, so they follow all laws and regulations as if the sale were made from California in the United States.
When a customer purchase a license from our web-store, all applicable taxes are calculated automatically by FastSpring and included in the order for the customer. FastSpring then reports and pay that tax to the respective government.
The following describes the countries where tax charges are applicable:
US Sales Tax
Digital goods purchased online by U.S.-based customers are not subjected to California sales tax.
Starting from January 1, 2015, the European Union changed the rules of value-added tax (VAT) so that VAT will be charged based on the location of the customer.
Digital sales in the EU require FastSpring to collect and pay VAT to the appropriate authorities and the VAT rates differ by country. VAT taxes are reported and paid to the EU by FastSpring. The invoice provided to the customer upon purchase completion will include the VAT amount as well as the FastSpring VAT ID.
All VAT deductions are handled automatically by the FastSpring system.
EU VAT Exemption
Businesses making digital purchases can be exempted from VAT Tax by providing their valid VAT ID at the time of purchase. For those providing a VAT ID, no VAT will be charged, and the VAT ID will be included on the invoice we provide at purchase completion.
FastSpring is required by law to collect and pay VAT for sales purchases from customers located in Norway.
Norwegian businesses making digital purchases can be exempted from VAT Tax by providing their valid VAT ID at the time of purchase. For those providing a VAT ID, no VAT will be charged, and the VAT ID will be included on the invoice we provide at purchase completion.
FastSpring is required by law to collect and pay VAT for sales purchases from customers located in Switzerland.
Japan's Consumption Tax
Starting from October 1, 2015, an amendment to Japan’s Consumption Tax Act took effect for all non-resident, or off-shore sellers of digital products and services to consumers located in Japan.
As the merchant- and seller-of-record, FastSpring will begin charging, collecting and remitting the new 8% consumption tax in Japan for off-shore sales of digital products to Japanese consumers. This new tax rate will be added on to the total product amount automatically.
For further information on VAT charges, please refer to FastSpring's article:
For full details on FastSpring's tax charges, please refer to: