What is VAT?

VAT (Value Added Tax), also referred to as Sales Tax in some jurisdictions, is a consumption tax applied to the purchase of goods and services. For digital products, VAT may need to be collected from consumers in the EU, on certain transactions between US states, and in various other countries.

We handle sales tax for you

When you sell digital products through Pay4Bit, we take care of the applicable sales tax requirements on your behalf.

As the Merchant of Record, Pay4Bit is responsible for the transaction with the end customer. This includes payment processing, tax calculation, tax collection, invoicing, and remittance of applicable taxes.

What Pay4Bit handles

• Determining the customer’s location for tax purposes;
• Calculating the correct VAT, GST, sales tax, or other applicable indirect tax;
• Collecting the required tax from the customer;
• Remitting collected taxes to the relevant tax authorities;
• Issuing compliant invoices and transaction records.

This allows you to sell digital products internationally without managing tax rules, registrations, rates, and filings for every individual market yourself.
For transactions where Pay4Bit is responsible for tax collection and remittance, the tax compliance process is handled by us.