Many businesses, whether operating online or in person, must deal with various tax-related matters. Although not the most engaging subject, it is crucial for ensuring the smooth operation of a business. Customers of Mailchimp, a well-known marketing automation platform and email marketing service, frequently ask the question: “Does Mailchimp charge VAT?”
Understanding VAT
Before we delve into the specifics, it’s essential to understand what VAT is. VAT stands for Value Added Tax, which is a type of consumption tax placed on a product whenever value is added at each stage of the supply chain, from production to point of sale.
Mailchimp and VAT
Now, let’s come back to the main question – “Does Mailchimp have VAT?” While Mailchimp is a US-based company and Americans do not typically charge VAT, the scenario is somewhat different for its customers residing in the European Union (EU).
As per the European Union’s 2015 VAT regulations, digital service providers like Mailchimp are required to charge VAT even to their non-business customers located in EU countries. This VAT is applicable regardless of where the provider company is based.
How is VAT Applied on Mailchimp?
Mailchimp automatically applies the VAT on the services it provides. The VAT rates are as per the EU country’s standard rate where the customer is located.
To establish the customer’s location, Mailchimp typically uses two non-conflicting pieces of evidence. These could be the billing address, IP address, bank details, or SIM card country code.
It’s important to note that while Mailchimp handles the VAT applying process, it is the customer’s responsibility to provide accurate information regarding their location.
VAT Exemption for Businesses
If you’re running a business in the EU and have a valid VAT number, you may be exempt from paying VAT on Mailchimp services. You can enter your VAT number in the billing information section of your Mailchimp account. Once verified, the VAT charges will be removed.
Here’s a simple example on how to enter your VAT number:
Account > Billing > Billing information > VAT Number
In conclusion, while Mailchimp is a US-based company, it does charge VAT to its EU customers unless they have a valid VAT number for tax exemption. Always ensure your location details are accurately entered to avoid any unnecessary tax charges.
For more information on Mailchimp’s VAT policies, you can visit their official help page.
