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 CA or NC. Starting Oct 1st, we'll add a VAT charge on orders that are fulfilled at our Europe location with a destination address in the European Union.
We'll 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.
We'll calculate VAT based on Printful's price, sales tax is calculated from the end-customer's retail price.
VAT applies to delivery charges
Note: We'll start charging VAT on Oct 1st. You can read about how it will affect your orders here.