What is VAT?

VAT stands for Value-Added-Tax. It's placed on each stage of the supply chain (eg. production, sale) for goods and services. VAT applies to orders that ship to a customer in one of the EU member states (based on “ship to” address).  

You can think of it like sales tax. For orders fulfilled in the US, we charge a sales tax if the order is going to a state where we're located. We also charge VAT on orders that are fulfilled at our Europe location with a destination address in the European Union.

We calculate VAT with the following formula: (Printful product price - discounts + shipping price) * VAT rate %.  

Key differences between VAT and sales tax:

  • VAT is added to every step of the process for the manufacturer, distributor, and seller. Sales tax is only applied to the value of the product sold.
  • VAT is calculated based on Printful's price, sales tax is calculated based on your retail price.
  • VAT applies to delivery charges.

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