TikTok Shop has a large creator affiliate programme. When a TikTok creator promotes a seller's product and a sale results, the seller pays an affiliate commission. This article explains how A2X handles these transactions.
What are affiliate fees?
Affiliate commissions appear in your TikTok Shop settlements as a deduction from your payout. They are paid by TikTok to the creator on your behalf. The commission rate is agreed between the seller and the creator and is calculated as a percentage of the sale price after discounts.
How A2X maps affiliate fees
A2X maps affiliate commissions to a separate Affiliate Fees bucket, rather than grouping them with other platform fees. This is important because affiliate fees have a different VAT treatment from standard platform fees.
UK sellers: affiliate commissions are mapped as Zero Rated Expenses
US sellers: No Tax
Why are affiliate fees zero rated in the UK?
TikTok does not issue a VAT invoice for affiliate commissions. Without a valid VAT invoice, you cannot reclaim input tax on those fees. As a result, they should be treated as Zero Rated Expenses rather than 20% VAT on Expenses, unless you have been provided with a valid VAT invoice separately.
Note: If your accountant has a different view on the VAT treatment of affiliate fees for your specific circumstances, you can adjust the mapping in A2X on the Accounts and Taxes page.
Affiliate commission deposits and releases
Since April 2025, TikTok holds affiliate commissions in escrow for at least 15 days after the order is delivered before paying them to creators. This means two additional transaction types appear in your settlements:
Affiliate Commission Deposit - the amount held by TikTok when the commission is initially withheld from your payout
Affiliate Commission Release - the amount returned to you if the order is refunded or cancelled before the creator is paid
These go to a Balance Sheet account (TikTok Reserved Balance) rather than the P&L. This is because the deposit and release do not net off in the same period - treating them as fees would distort your monthly results.