Hello Valberg.

Thank you for your interest in our plugin and your honest opinion.

The base price for our plugin's Basic license is $59. However, since your price changed to Euros, I assume you're from a EU country, and all EU countries have VAT (Value Added Tax) which is mandatory for every product - physical or digital. The VAT changes in percentage, however, depending on the country (usually it's around 20%).

For instance - if you're from Germany the price would be:

If you're from the Netherlands:

And if you're from France:

And so on. You can even see that it says (inc. VAT) right next to the price.

So when mandatory VAT is applied to the transaction, you get the price of the plugin in your country. Some countries (mostly countries outside EU) do not have VAT applied to digital products, so for example - in Serbia, the plugin is $59:

You can test this yourself on our checkout page just by changing the country in the second step. Unfortunately, you cannot purchase the plugin as if you're in a different country, to get a better price.

Paddle is our reseller, and they entirely handle VAT (sales tax) for all digital products sold to countries where this is a legal requirement, eg. EU member states, India, Australia and more.

VAT registered businesses who purchase products through Paddle will not pay VAT if the transaction is cross-border (they do this by entering their VAT ID at the time of purchase - "Add VAT Number" in the checkout window). 

Paddle acts as a Digital Platform for the purposes of EU VAT. Put simply, Paddle acts as a re-seller of a product, meaning that they can collect the relevant information about the customer, charge them the correct amount of tax, and return it to the relevant authority.

I hope you don't get me wrong, but I'll use your comparison about milk - when milk is delivered to the store, VAT is already applied, since the sale will take place at a certain store in a certain city, and country - they already add VAT to every product delivered to the store. Digital products are sold all over the world, so we cannot add tax to the base price simply because it is not the same in all countries. It'd be different if the plugin was sold on a CD in a store - then VAT would be applied before being put on a shelf, and you'd see €67.07, not $59.

I hope that helps.

Hi again Valberg.

Let's please keep it professional here. No need for comments like this:

So where does this tax go if you are all so high and mighty on these tax laws

I'm not the one who applies VAT to the transaction, and as I mentioned in my last reply - Paddle entirely handles VAT for all digital products sold to countries where this is a legal requirement.

VAT must be collected on digital products sold to consumers within the EU, on certain inter-state US transactions, and in a growing number of other countries. It is charged on top of the sale price of a product, and must be returned to the relevant tax authority i.e. the governing body at the buyer’s location.

This means that whether a VAT charge is applied to a purchase depends on the location of the buyer; if the buyer is from a country where VAT applies, a VAT charge will be applied to the transaction. The buyer is responsible for paying the VAT. Whether the seller of the product is VAT registered has no impact on this process.

As of September 24th, 2018, Paddle had to begin charging sales tax for B2C buyers purchasing in Iceland, and as of January 4th 2019, they began charging sales tax for B2B buyers purchasing in both Iceland and Russia.

We surely don't know if Paddle is overcharging VAT for Iceland, but you would need to contact them here to see why this happens.

After some personal research I found this:

As per rsk.is, the standard rate of VAT in Iceland is 24%

This info checks out on many other sources:

https://tradingeconomics.com/iceland/sales-tax-rate

https://www.avalara.com/vatlive/en/country-guides/europe/iceland/icelandic-vat-rates-and-compliance.html

https://www.island.is/en/finance/taxes/taxes_on_goods_and_services/

The lowest I found on digital products' VAT rate in Iceland is here, where it is set to 22.5%.

If you have any further doubts about VAT being too high for your country, please reach out to Paddle using their contact form, and I'm sure they'll provide more details about this.

Hello again Valberg.

Thank you for pointing out that there's no notice about potential VAT rate applied to a transaction. That will be added. I'm sure it was listed, so I don't know how that got removed from our website.

Like mentioned before - Paddle handles VAT, and saying you're sure that it is not being paid to your home country is implying fraud. All VAT related questions from this point on should be forwarded to Paddle through their contact form.