In order to comply with tax regulations, Kinsta charges VAT (Value-Added Tax) to EU and UK residents and to EU and UK-based companies. This article contains everything you need to know about what VAT is, and 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, tax-related, or other professional advice. If you have questions about adding your VAT identification to our system, please contact support at any time. If you have further questions, don’t hesitate to get in touch with your accountant, legal advisor, or local tax authority.
Who Is Affected By VAT?
This Knowledge Base article is only important to you if you are an EU or UK resident or if your company is registered in the EU or UK.
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 or UK. This includes digital services such as hosting. VAT is a percentage of the price that is added to each invoice. The VAT rate is defined by each country. Depending on which country you reside in or your company is registered in, the VAT rate will be different.
Data is published on the specific VAT rates regularly. Note that each country can set multiple VAT rates. Our services fall under the standard rate. To view specific rates, see your governing body’s official page:
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. Companies are required to collect and remit VAT, even if they have no permanent establishment in the EU or UK.
For EU VAT, 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.
For UK VAT, according to the UK Government, any business making supplies of digital services to UK consumers must collect and remit UK VAT.
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 or UK resident, or your company is registered in the EU or UK, we are generally 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 $115 at the time of writing), your checkout total will be $139.15. This consists of the $115 list price and a 21% tax which is $24.15. 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 afterward in MyKinsta) and you provide a valid VAT Number, we are allowed — under applicable 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 MyKinsta (Company settings > Billing Details) to make sure you are not charged VAT is not charged to you. As a VAT-registered business, you will still be responsible for VAT under the reverse charge mechanism of your country.
Obtaining a VAT Number
Regulations are different from country to country. Businesses may apply for a VAT number at any time. Businesses 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 tax authorities’ 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 that you have already paid, but as long as your VAT Number is valid, we will not charge VAT for subsequent invoices.