Royalty amounts can differ from sale to sale due to the following three factors:
- Your royalty level
- The location of the buyer to determine the tax (VAT/GST) rate
- If the buyer paid for some or all of the purchase with a voucher
Please note that whatever your location, VAT is due on all sales made to consumers in the EU. This is both EU and UK law and applies to Tes and all digital goods vendors, regardless of where they are located.
To make it simple let's assume the buyer is in the UK and is subject to 20% VAT and you are a Bronze Author.
If the buyer pays in cash the 20% VAT rate equates to £0.50p VAT on a £3 purchase (£0.50p because prices are VAT inclusive) You would receive 70% of the VAT exclusive price i.e. £2.50*70% = £1.25.
Please note that some countries have higher VAT rates, e.g. Hungary at 27%, where your minimum will be lower and if your resource is priced under £3/$3 a transaction fee is applicable - (http://help-resources.tes.co.uk/customer/portal/articles/2832860-how-does-it-work-)
However, some buyers will have voucher credit on their accounts due to Tes promotions. The portion of the price paid for by free credits is not subject to VAT so you'll get more royalty on these purchases. In the same example, if the UK buyer funded £1 of the purchase from a voucher and £2 from cash, 20% VAT would only apply to the £2. In this case VAT is £0.33, so your royalty would be 70% of £2.67 (£1.67 + £1).
You can see a breakdown for each of your sales in the 'Sales' section of your Author Dashboard: https://www.tes.com/teaching-resources/dashboard/sales
Please note that whatever your location, GST is due on all sales made to consumers in Australia.
With effect from 1 July 2017, Australian GST (goods and services tax) law changed to extend the scope of GST so that it now applies to sales of digital supplies to Australian consumers regardless of the location of the seller. The rate of GST is 10% and is a similar tax to VAT in the EU.
The applicable VAT/GST amount is deducted at point of sale, prior to any royalty amount calculations.
Royalties are calculated on the sales price after GST or VAT has been deducted, therefore the new law will cause royalties earnt on sales to Australian consumers to slightly decrease.
Sale of a £10 resource to an Australian consumer before the new law applied:
Resource purchased for £10, which included no GST. Therefore the royalty earnt by the seller would have been £10*60% (if this is the applicable royalty rate) = £6
Sale of a £10 resource to an Australian consumer under the new law:
Resource purchased for £10, which consists of £9.10 plus £0.90 GST. The royalty rate is applied to £9.10 so the royalty earnt by the seller would be £9.10*60% = £5.46
To check your liabilities with regards to VAT/GST payments / refunds, we recommend that you consult a tax professional for advice about your own specific circumstances.