How does Paddle handle VAT (sales tax) on my behalf?
Paddle entirely handles VAT (sales tax) for all digital products sold to countries where this is a legal requirement, eg. EU member states, India, Australia and more.
VAT registered businesses who purchase products through Paddle will not pay VAT if the transaction is cross-border (they do this by entering their VAT ID at the time of purchase).
Paddle acts as a Digital Platform for the purposes of EU VAT. Put simply, Paddle acts as a re-seller of your product, meaning that we can collect the relevant information about your customer, charge them the correct amount of tax, and return it to the relevant authority. No additional work is required on your part.