How VAT works on Artfinder (an online marketplace)

Value Added Tax (VAT) is a consumption tax that applies to most goods and services sold in the UK and the EU. 

Artfinder acts as an intermediary (agent) between Customers and Sellers, i.e., we provide the platform for connecting both parties to facilitate the sale. Customers are purchasing artworks directly from the Sellers, and the Sellers are responsible for the order fulfilment. Artfinder charges a commission and other fees (subscription, paid promotion) to the Sellers for services provided to them to facilitate the sale.

Artfinder’s and Sellers’ VAT obligations have been summarised below. 

Sellers’ Responsibility

Sellers are generally responsible for charging the correct VAT (if applicable) on the goods they sell on an online marketplace. Whether VAT is applicable depends on the Seller’s location, the Customer’s location, and whether the Seller is VAT registered. The VAT collected on sales must then be reported and paid to the relevant tax authority.

The “Deemed Supplier” Rule

The only exception to the above is when Artfinder, as a marketplace, is considered a "deemed supplier." This is a specific VAT rule that makes the marketplace responsible for collecting and remitting VAT on certain transactions as below:

• Imports to the UK where the consignment value is below £135 and goods are sold to UK customers
• Imports to the EU where the consignment value is below €150 and goods are sold to EU customers 
• Sales where goods are already located in the customer country (UK or EU) at the point of sale, when the seller is based outside those territories. We encourage all sellers on Artfinder platform to ensure their “Shipping from” address is correct and up-to-date so that any VAT subject to the “deemed supplier” rule is calculated correctly. 

In these cases, Artfinder is responsible for accounting for VAT at the point of sale, as well as for issuing an invoice with the correct VAT rate applicable in the customer’s country, and remitting the VAT to the relevant tax authorities in the UK and EU. 

Artfinder’s VAT obligations

As a UK-registered company, we are obliged to abide by the laws of England, as laid out in point 1.6 of our Seller Terms and Conditions. Part of this is to charge and pay VAT to the UK tax authorities.

Artfinder must charge UK VAT (20%) on commission and other fees related to services provided to UK-based sellers. 

For sellers located outside the UK, these service charges are outside the scope of UK VAT, though local rules may apply in the seller’s country (eg, reverse charge mechanism applies for sellers based in the EU).