EU VAT handling on Gamefound


Today, we want to talk with you about something really exciting! TAXES! 
…  well, yeah, maybe not the most exciting thing - but definitely very important. In recent times in crowdfunding, there were (and still are) a lot of questions in regard to VAT tax in the European Union. 

At Gamefound, we are the only crowdfunding platform that complies with EU VAT laws and helps creators to collect and pay appropriate taxes. We believe that this helps creators (they can focus on games, not on taxes!) and backers - as they will have full transparency. But let's start from the beginning. 

EU VAT in crowdfunding

Why is EU VAT handling so important?

The changes in European Union (EU) Value Added Tax (VAT) handling for e-commerce were introduced by the EU in July 2021. These changes resulted from abusive practices when declaring product value in selling products from outside the EU to EU customers. This caused significant losses for EU countries and impacted the fair competition among sellers. While paying VAT was always mandatory, the EU changed the process to make sure appropriate taxes are collected.

What changed?

The EU introduced regulations that would level the costs for EU businesses and non-EU ones. New rules shifted the obligation of VAT handling to online marketplaces (including crowdfunding platforms). This also reduced tax-avoidance practices without the need to engage out-of-EU sellers in VAT handling for EU buyers.

The impact on crowdfunding

EU made it clear that all reward-based crowdfunding platforms, no matter if they’re registered or based in the EU or anywhere else in the world, are treated as a marketplace and are obliged to collect VAT for transactions in which:

  • Creators are from outside the EU and use EU-based hubs to ship pledges – regardless of transaction value;
  • Rewards shipped from outside the EU directly to a backer in the EU, and the value of the parcel does not exceed EUR 150, no matter where the creator is based. *

These regulations apply to all crowdfunding platforms. Non-compliance with the EU VAT legislation is considered tax evasion and may negatively affect project fulfillment and lead to penalties imposed by the applicable tax office. 

Gamefound has been complying with the regulations introduced by the EU, collecting VAT during the pledge manager phase. Now, it will be automatically applied to all creators during crowdfunding. The campaigns launched in the past will have the VAT collected in pledge managers.

*We also collect VAT for pledges with a value higher than 150 EUR, but the obligation to settle VAT is on the creator’s side.
EU VAT handling on Gamefound 

Gamefound handles the EU VAT settlement for creators. If you’re based outside the EU and use an EU hub for fulfillment, you don’t need to care about collecting taxes in the European Union. We collect the VAT for you and settle it with the proper tax office. Then, we will send you documentation with settlement confirmation that can assist you in import VAT recovery.

If you don’t use the shipping hub for the fulfillment, Gamefound still settles the taxes for orders up to €150 value. European Union’s regulations say if the product shipped is worth more, it’s the creator’s duty to pay this tax. In such case, VAT money will still be collected by Gamefound, but we’ll transfer taxes for pledges exceeding €150 to your bank account. Your logistics partner can use it to handle tax-friendly delivery for you.

We're here for you

We develop the platform with your needs in mind. The tax handling should make creators' life easier and allow them to comply with the EU law. We know it's hard and confusing, so let us handle it for you. We've got a dedicated team who handles all tax handling for creators using our platform.

Thank you for all your feedback and support!
Alex Radcliffe
CMO of Gamefound