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Understanding the Tax Process on Buy Me a Coffee
Understanding the Tax Process on Buy Me a Coffee

Read the article to see how tax work with Buy Me a Coffee

Updated over a week ago

In most cases, income earned on our platform is subject to income tax and should be reported similarly to other sources of income. Currently, Buy Me a Coffee does not have built-in tools to add sales tax or value-added tax to purchases. Therefore, it is your responsibility to calculate and remit any applicable sales tax or VAT on your sales until such tools are made available.

Income tax

When it comes to income tax, we recommend familiarizing yourself with the tax rules in your country regarding income. You may need to declare the income received using our features and report it accordingly. If necessary, you can download 1099-K forms from Stripe, our payment processor, following their provided instructions.

How to charge sales tax or VAT?

Buy Me a Coffee operates as a direct payment platform where buyers or supporters make payments directly into the creators’ accounts. Due to this arrangement, Buy Me a Coffee does not handle the collection and remittance of sales tax or value-added tax (VAT) on behalf of creators. You are responsible for determining whether you need to register, charge, and pay sales tax or VAT based on your specific circumstances and location.

However, we are actively working on providing tools that will allow you to easily add sales tax or VAT to the prices of your Shop items, Memberships, or Commissions. This means that when someone makes a purchase, the full amount, including any applicable sales tax, will be deposited into your account. It will then be up to you to accurately report and pay any required sales tax or VAT as per the relevant regulations.

Will I have to pay taxes on the support received?

It is commonly understood that income from support is typically subject to income tax. As the recipient of support, it is your responsibility to report this income and fulfil any relevant income tax obligations in your country.

Note: To ensure compliance with tax regulations and to receive accurate guidance, we highly recommend seeking professional advice from a tax advisor who can provide personalized assistance based on your individual circumstances.

We hope this article has helped you understand how tax works with Buy Me a Coffee. Please feel free to reach out to us at [email protected] if you have any queries.

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