What is VAT?
VAT stands for Value-Added Tax. It’s a consumption tax placed on goods and services at each step of the supply chain from production to sale.
VAT applies to orders that are shipped to a customer in one of the EU member states (based on the “ship to” address), as well as the United Kingdom (UK), Norway, Switzerland, and Liechtenstein, regardless of where the order is fulfilled from.
This means all orders shipped to the EU from any Printful location will be subject to VAT.
How VAT is calculated
VAT is calculated using the following formula:
(Printful product price - discounts + shipping price + services) × VAT rate
- Product price: What you pay for the product and fulfillment
- Shipping price: Delivery charge
- Services: Includes any extra fees, like digitization
Key differences between VAT and sales tax
- VAT is applied at every stage of the supply chain, while sales tax is only applied when the final customer purchases the product.
- VAT is calculated based on Printful’s price; sales tax is usually based on the Printful product price or your retail price, depending on the state.
- VAT always applies to delivery charges; with sales tax, it depends on the state.