<aside> 📌 This information is intended for BuiltByBit creators. If you’re an accountant, hi! Click here to view information for accountants.

</aside>

You didn’t start selling your creations to spend your days figuring out complex tax rules in countries all over the world. By selling Pro resources through us you gain access to the full sales tax compliance offered by Tebex through their Tebex Checkout platform.

By selling on BuiltByBit, Tebex is the merchant of record.

What’s a Merchant of Record (MoR)?

Using Tebex as a merchant of record lets you get back to what you do best: create resources

As the MoR, Tebex buys the products from you, then resells it to your buyers. Instead of working directly with buyers and financial service providers, you communicate with just one entity, Tebex.

Your buyers will still visit BuiltByBit to buy software or update subscriptions, but when they’re ready to check out, they buy the software from the Tebex. Tebex will be the name listed on their bank or credit card statement. This is how the MoR becomes the liable party for the sale.

Handling Sales Tax

Since Tebex are selling the goods directly, they are responsible for the collection and remittance of sales taxes such as GST, VAT, TVA, IVA etc. As Tebex is the seller of these goods, and as a VAT-registered company, they are required to charge VAT to players based in the European Union. As time passes and regulations change they may also have to charge sales taxes in other regions.

Tebex collects and pay all sales tax on your behalf to the relevant tax authorities. For example, if they collect VAT for a player based in France, they will pay that sales tax to the French tax authorities for you without any input needed from yourself. Because you are not selling any goods to customers directly, you do not need to account for, or remit any VAT or sales tax for goods sold via Tebex Checkout.

Sales tax is charged as an amount on top the price of your products. This means that the Sales Tax/VAT does not come out of the money you receive.

This is a legal requirement for any business selling virtual goods online, and this same process happens with platforms such as Patreon, the Apple App Store and the Google Play Store. Do not advise your customers to avoid paying sales tax/VAT, including in places off our platform such as Discord servers. Creators advising this risk permanent closure and removal from both the Tebex and BuiltByBit platforms.

Will Paying Sales Tax Result in Less Buyers?

No, we’ve seen no indication that paying sales tax results in you earning less revenue from buyers changing their mind at checkout. For several months we ran a trial where we switched half of our creators over to Tebex Checkout with sales tax being added on top of the sale price, and the other half remained on our legacy PayPal system without sales tax being added to the sale price. Our creators who switched over experienced no decrease in sales, and in fact, their sales grew even more than the creators on the PayPal system. We believe this is the case because:

  1. Sales tax is only charged for people who are used to paying sales tax. We’ve found that only around half of all transactions have sales tax charged on them, and so people who don’t usually pay sales tax won’t have to pay it here either.
  2. Buyers can claim back the sales tax they pay at tax time. If a buyer is registered for GST and the purchase is a business expense, they can claim back the amount they paid from the government.
  3. Sales tax amounts are generally less than people think. We’ve seen that europeans tend to assume that sales tax is high everywhere in the world, but elsewhere it’s considerably less!
  4. As of February 16th 2023, Tebex only collects sales tax from 9 countries plus Europe. See the list here.
  5. All the other Pro resources also have sales tax being charged anyways. Buyers are used to it being added to their cart since over half of all payment volume is currently happening through Tebex Checkout.

Frequently Asked Questions