Payhip EU VAT and UK VAT Explained

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Ongoing Web Updated November 13, 2026Based on 3 user reportsHow we research

Quick answer

Payhip automatically collects and remits digital EU and UK VAT by default. Decide whether VAT is added on top or included in your price, because the included option cuts your payout.

Most likely fix: Check the Taxes settings

How to fix it

Try these in order — the most common fix is first.

  1. 1. Check the Taxes settings

    1. Open Settings > Taxes
    2. Leave the first two checkboxes on for automatic UK/EU VAT, or uncheck them to handle VAT yourself
    Did this fix it?
  2. 2. Choose add-on or inclusive pricing

    1. Add VAT on top: a $10 sale to France lets you keep $9.50 before PayPal fees
    2. Include VAT in price: the same sale leaves $7.91
    Did this fix it?
  3. 3. US and Canadian sales tax

    1. Payhip started collecting and paying US and Canadian sales tax from July 1, 2026
    Did this fix it?

Symptoms

You are unsure how VAT is charged, why the payout is lower, or how to turn VAT handling off.

Why it happens

  • VAT depends on the buyer's country
  • VAT included in price lowers the net payout
  • Payhip's 5% fee applies to the VAT-inclusive total
  • Settings default to automatic handling

This guide also covers

  • payhip eu vat
  • payhip vat settings
  • payhip uk vat
  • payhip sales tax

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