In order to comply with EU tax regulations, Kinsta charges VAT (Value-Added Tax) to EU residents and EU based companies. This Knowledge Base article contains everything you need to know about what VAT is, how it affects you as a Kinsta customer. If you’d just like to enter your VAT number take a look at our article on how to add your VAT number.
Please note that this article does not constitute legal or tax-related or other professional advice. If you have questions about adding your EU VAT identification to our system please contact support at any time. If you have further questions please contact your accountant, legal advisor or local tax authority.
Who Is Affected By EU VAT?
This Knowledge Base article is only important to you if you are an EU resident or if your company is registered in the EU.
What Is VAT?
VAT – Value Added Tax – is a form of tax that you must pay after the purchase of most goods or services in the EU. This includes digital services such as hosting. VAT is a percentage of the price which is added to each invoice. The VAT rate is defined by each EU country. Depending on which country you reside in or your company is registered in the VAT rate will be different.
The EU publishes data on the specific VAT rates in its member states regularly. Take a look at the EU’s official page about VAT rates. Note that each country can set multiple VAT rates. Our services fall under the standard rate.
Why Does Kinsta, a US Company, Collect VAT?
In most cases, a company is only responsible for tax liability in a given country if it has a permanent establishment in that country. However, in the case of VAT, that is not true. Non-EU companies are required to collect and remit VAT to each EU member state even if they have no permanent establishment in any given member state.
According to the International Trade Administration at the U.S. Department of Commerce:
Non-EU providers of electronic goods and services are now required to register with a tax authority in the member state of their choosing and to collect and remit value-added tax (VAT) at the VAT rate of the member state in which their customer is located.
In other words, even though Kinsta is a US company we are required to collect and remit VAT.
How Does This Affect Me?
If you are an EU resident or your company is registered in the EU we are obliged to apply VAT to your purchases. For example: at the time of writing the standard VAT rate in Spain is 21%. If you purchase a Business 1 plan (list price of $100 at the time of writing) your checkout total will be $121. This consists of the $100 list price and a 21% tax which is $21. These items are shown separately on the checkout page and in your invoices. The VAT rate we must apply depends on your selected country.
If your account is a company account (you can set this up during signup or anytime afterwards in MyKinsta – see below for a detailed guide) and you provide a valid EU VAT Number we are allowed – under EU tax rules – to zero rate VAT. This means that we will charge 0% VAT. If you have a VAT number you should add it during registration or in the MyKinsta interface to make sure VAT is not charged to you.
Obtaining an EU VAT Number
Regulations are different from country-to-country and most businesses will not have an EU VAT number. Businesses (even outside the EU) may apply for an EU VAT number at any time. Business within the EU that meet a minimum threshold of income are obligated to apply for one
Note that many European countries may issue national (non-EU) tax numbers or other tax identification numbers. These are not EU VAT numbers and can not be used to reduce the amount of VAT to be paid.
Will My VAT be Refunded From Past Invoices if I Enter My VAT Number?
Unfortunately not. Being in possession of a VAT Number is not sufficient to fulfill the EU’s data requirements. You must be in possession of a VAT Number and you must supply it at the time of purchase. This means that we can not refund the VAT from past invoices.
If I Am Being Charged VAT Can I still Add My VAT Number?
Yes! Our system will check your VAT number at the time of invoice generation. If you are a company and you have a valid VAT number added to MyKinsta we will not add VAT to your invoice. This means that if you are currently being charged VAT you may add a number at any time. This will not modify invoices which you have already paid, but as long as your VAT Number is valid we will not charge VAT for subsequent invoices.