Grailed is required to collect VAT or GST on applicable transactions made on Grailed and the fees it charges to sellers in order to comply with your region’s tax laws. Whether and how much tax is collected depends on a few things, such as where you’re buying or selling from and the cost of goods or services.
There’s a lot of information and it can be a little confusing for buyers and sellers alike, so we’ve put together this resource to try and answer any questions you might have.
Here’s a list of what this article covers:
- What is VAT/GST?
- I’m a buyer/seller who is registered as a business. Is there anything I need to do?
- Is there anything I need to do as a buyer?
- How will I know what taxes I’m charged when buying on Grailed?
- Is there anything I need to do as a seller?
- How will I know how much VAT/GST I’m charged when selling on Grailed?
- Why is the amount in my PayPal/Stripe account higher than what I sold it for?
- Why does it look like the partner fees are higher?
If by the end of this you have additional questions, our team is ready to help!
What is VAT/GST?
Value Added Tax(VAT)is a consumption tax placed on certain products applying to each stage of the supply chain. VAT is also known as a Goods and Services Tax(GST)depending on which region you’re in. Grailed is required to collect VAT/GST from some buyers and sellers based on criteria determined by each region’s tax laws.
I’m a buyer/seller who is registered as a business. Is there anything I need to do?
If you are a buyer or seller that is a non-US user and you are not VAT/GST registered, no action is required.
If you are a non-US user that is VAT/GST registered, please update your Grailed account with your VAT/GST business registration number, so that Grailed does not charge VAT/GST on applicable sales(for buyers) or Grailed commission fees(for sellers).
Our team has developed a quick and easy way for you to update your Grailed account with your VAT/GST business registration number. Please visit this article for a step-by-step guide on how to set up your account.
Buyers and sellers who are located in any one of the following regions and registered as a business can update their Grailed account with their VAT/GST registration number:
- European Union
- New Zealand
- United Kingdom
Is there anything I need to do as a buyer?
Nope! Where we are required, we will automatically collect VAT/GST on applicable purchases and give it back to the respective government. Your experience as a buyer won’t change, aside from seeing the applicable estimated tax applied to your total at checkout.
How will I know what taxes I’m charged when buying on Grailed?
Many countries and jurisdictions around the world apply some sort of tax on consumer purchases, including goods bought on Grailed. Depending on where you are located, VAT/GST may be collected when receiving packages from an international seller(a seller who is not located in the same region as you).
The total VAT/GST for buyers is calculated based on the cost of goods and shipping; it’s important to note that each region has additional guidelines on under what conditions they collect VAT/GST. You will be able to see the estimated tax amount applied to your total at checkout.
Is there anything I need to do as a seller?
While the tax collection for applicable transactions will be automatically applied, there are a few key things to keep in mind when shipping internationally.
- Familiarize yourself with how taxes will be collected and displayed in the listing’s payment breakdown.
- If you are a seller that is registered as a business, update your Grailed account so that we do not charge you automatically.
- If you’re selling internationally into Australia, the European Union, New Zealand, or Norway, review what information must be included on your package.
How will I know how much VAT/GST I’m charged when selling on Grailed?
Depending on local tax legislation, Grailed may be required to collect VAT/GST or similar tax on applicable Grailed commission fees. The amount of tax charged is dependent on where you’re located and the total Grailed commission fee charged. For sellers on Grailed, VAT/GST is calculated based on the total Grailed commission fee, which is considered as a service for tax purposes.
Why is the amount in my PayPal/Stripe account higher than what I sold it for?
PayPal and Stripe both include the total VAT/GST collected in your gross earnings for the sale. The initial amount you see in your account will appear higher than the amount you are eventually paid because these payment processors collected the tax along with the rest of your buyer’s payment. The tax is then returned to Grailed, at which point we send it to the appropriate international government.
Why does it look like the partner fees are higher?
On their end, payment processors will show the total VAT/GST charged and Grailed’s commission fee as a combined total labeled “Partner Fees,” which might make these fees appear higher than you’re used to. This does not mean that you are being charged a higher commission fee - it’s just the way the payment processors will display the two separate charges. Click here for more information about the commission we charge.