So Esty has started charging buyers VAT on digital items. Ok.
I'm really no tax fundi. I get most of the basics, the things I need to know for me and my shop - in my home country that is...
But in South Africa, we pay pretty high VAT in general - and thats about 14%. When VAT on digital items was implemented here on etsy, the first item I sold after that was a $5 item and my customer was charged $1 VAT! That seems awfully high.... No?
The same happened for the next item. But for the two $5 Items after that, each buyer was charged $0.00!! Why? How is that fair to my customers who did have to pay VAT??
Am I being blonde here or does that seem a little off...?
I am totally fine with the idea that my buyers get charged VAT if its small % of the cost of the item/s but charging 20% seems too high and I worry that it may hurt my shop in the long run...
Could anyone shed some light on this for me?
