Disclaimer: You should get tax advice from your accountant or tax adviser. These instructions are for the technical configuration of A2X only.
This article explains how A2X for TikTok Shop handles VAT for UK sellers. TikTok Shop's VAT treatment is similar to eBay and Etsy - straightforward for most sellers, with a few important nuances to be aware of.
There are two approaches that are useful for TikTok Shop sellers in A2X for handling VAT.
1. Add all the countries you are registered in during the Assisted Setup questionnaire
During the Assisted Setup questionnaire, you will be asked which countries you are VAT registered in. Simply add all the relevant countries at this stage and A2X will automatically split these out for you.
2. Grouping by Product Type
This allows sellers to group sales of products that have different tax rates together. For example, a UK seller may have VAT on some items they sell and no VAT on others - such as children's clothing. Learn more about this feature here.
Note: TikTok Shop does not currently distinguish between standard-rated and zero-rated products within a sale. If you sell genuinely zero-rated products, such as children's clothing, you will need to set up a product type group in A2X to catch those products and apply the correct zero-rated treatment. This is the same approach used for eBay and Etsy. We believe TikTok may improve this in a future update.
Sales
A2X maps TikTok Shop sales based on the buyer's country:
UK buyers: 20% VAT on Income
EU buyers: Zero Rated Income
Non-EU buyers: Zero Rated Income
Fees
Platform fees charged by TikTok are mapped at 20% VAT on Expenses for UK sellers.
Affiliate fees
Affiliate commissions are mapped as Zero Rated Expenses. This is because TikTok does not issue a VAT invoice for affiliate fees, so input tax cannot generally be reclaimed. See Affiliate fees in TikTok Shop for more detail.
Selling to multiple countries
If you sell to buyers in multiple countries, A2X automatically splits each sale for separate treatment by the registered countries you have listed during the onboarding questions. This is helpful for guiding your VAT rate mappings.
Tip: Entered your countries incorrectly, or need to update them? No problem! Use the update feature on the Accounts and Taxes Page.
Need help with your A2X setup?
If you are struggling with setting up your Accounts and Taxes page and would like some help from an accountant or bookkeeper, we have a directory of expert accounting and bookkeeping partners around the world who are ready to assist with your ecommerce accounting and A2X. Find a partner here.