How to Set Up Tax Rules & Add VAT Number

The tax feature allows you to charge an additional percentage based on the

1. The total cost of the backer's pledge level,
2. The total cost of the backer's shipping, and
3. The total cost of any add-ons selected in BackerKit. 

To estimate potential taxes you may incur for international shipping, you can visit https://en.wikipedia.org/wiki/List_of_countries_by_tax_rates

NOTE: If you are unsure of whether you need to charge VAT and taxes for your campaign, please consult with a certified tax professional. 

To get started: 

1. Go to Tax Rules on the sidebar of your project. 
2. Click New Tax Rule.
3. Select a Tax Rate Group and click Submit if you would like to add common tax rules or create a tax rule for a single country/region. This means that you do not need to build out tax rules for EU, GB, CA and US manually. 

NOTE: BackerKit is not responsible for ensuring correct rates. 

Currently, you can charge based on the country or State/Province in the US, Australia, and Canada. At this time, BackerKit does not allow taxes by county or city.

For all other regions, please build out the tax rules manually by clicking on Add New Tax Rule> Create a tax rule for a single country/region.

Charging Tax on Pledge Levels

You can set to collect taxes on the total amount of pledge levels. All pledge levels are set to be taxable by default. If you do not want to collect taxes on specific pledge levels, you must indicate so by unchecking the box for the pledge levels under Please select which pledge levels are taxable on the Tax Rules page. 

Charging Tax on Add-ons

You can set to collect taxes on the total cost of add-ons. All add-ons are set to be taxable by default. If you do not want to collect taxes on specific add-ons, you must indicate so by unchecking the ‘taxable’ box within each add-on edit window. 

You can get started by going to Customize Add-ons/Add-ons> click on Edit for each add-on> uncheck the ‘taxable’ box>Save. 

NOTE: Taxes are applied to the total cost of an add-on. If you have an add-on that consists of more than one product SKU and you do not want to collect taxes on one of the product SKUs, you must break the add-on into multiple add-ons so you can indicate whether each add-on is taxable. Check out this help article on how to duplicate add-ons: https://help.backerkit.com/article/505-505

Charging Tax on Shipping

You can set to collect taxes on the total shipping fee. The total shipping fee consists of both pledge-level shipping and add-on shipping. The shipping fee is set to be taxable by default. If you do not want to collect taxes on your shipping fees, you must indicate so by unchecking the taxable radio button per the tax rule. 

You can get started by going to Tax Rules> click on Edit for each tax rule> uncheck the ‘Tax Shipping Fees’ box>Save. 

Lastly, you can also enter your VAT number and VAT address on the Tax Rules page. Once inputted, this information will show up on the Pack List as well as the backers' confirmation screen and email. 

Beta Feature: VAT by Item

Some creators prefer to charge an exact amount for taxes by item type; for example, books and digital items that have very different tax rates, while our Tax Rule settings only allow 1 rate per country.

If you are interested in trying this beta feature, please contact the Customer Success team by emailing hello@backerkit.com to see if your project qualifies.