The simple answer is that you can’t advertise on Tiktok Europe without paying VAT. You can pay the lowest VAT.
If you must pay Tiktok VAT, would you rather pay the maximum or the lowest? This Article will show you how to pay the lowest possible Tiktok VAT.
Imagine having an American company and you want to advertise in Europe. You quickly learn that you have to create a Tiktok Europe Account.
This is because Tiktok has placement restrictions. For example, if you have a Tiktok ads US account, you can’t advertise in Europe and if you have a Tiktok Europe Account, You can’t advertise in North America.
When registering for the Europe Account or UK Tiktok ads account, you will see a tax VAT field.
Now you may have several questions. Do I need to set up VAT tax? Can I use my US company Tax information? Can I use any Tax information aside from the EU? Is there a way to boycott VAT and not pay any at all?
What is VAT in Europe
VAT stands for Value added tax. Businesses operating in Europe are required by European laws, to charge tax on customers and return Taxes to the government.
This means as an e-commerce Business selling products in the EU, you are required to comply with Tax law.
However, when you are just staring out at an e-commerce business selling in the EU. You do not need to tax your customers until you’ve made a sale of up to 10,000 Euros in the EU.
You can learn more about your requirements to charge and return Taxes as an e-commerce business selling in the EU. In this Article
Tiktok is a Business which has the same obligations to charge and return Taxes on its EU base customers.
When you create a Tiktok EU ad Account, you become a Tiktok EU customer. So, when you purchase an ad service, Tiktok is obligated to charge you VAT.
How much VAT does Tiktok charge EU advertisers
Different European countries have different VAT rates.
Tiktok will charge and add VAT to your ad purchase amount.
For example; the UK has a VAT rate of 20%. This means if you buy an ad spend of $100 on Tiktok, you’d be paying $120. That is the actual price + VAT.
This VAT will be included in your Tiktok ads Price.
The following are EU countries and their respective Tax rates on Tiktok;
| Country | E-Services VAT rate | VAT number requirement |
| Austria | 20 | Optional |
| Belgium | 21 | Optional |
| Bulgaria | 20 | Optional |
| Cyprus | 19 | Optional |
| Czech Republic | 21 | Optional |
| Germany | 19 | Optional |
| Denmark | 25 | Optional |
| Estonia | 20 | Optional |
| Greece | 24 | Optional |
| Spain | 21 | Optional |
| Finland | 24 | Optional |
| France | 20 | Optional |
| United Kingdom | 20 | Optional |
| Croatia | 25 | Optional |
| Hungary | 27 | Optional |
| Ireland | 23 | Optional |
| Italy | 22 | Optional |
| Lithuania | 21 | Optional |
| Luxembourg | 17 (16% tax rate is temporarily applicable from January 1, 2023, to December 31, 2023) | |
| Latvia | 21 | Optional |
| Malta | 18 | Optional |
| Netherlands | 21 | Optional |
| Poland | 23 | Optional |
| Portugal | 23 | Optional |
| Romania | 19 | Optional |
| Sweden | 25 | Optional |
| Slovenia | 22 | Optional |
| Slovakia | 20 | Optional |
| Switzerland | 7.7 | Optional |
How does Tiktok decide which European country Tax rate to apply to your EU Tiktok ad account;
It is not even required for you to provide an EU VAT when registering from your EU Tiktok ad account. You can decide not to provide any VAT number at All.
More so, providing an invalid VAT number may not stop the successful registration of your EU Tiktok ad account, because a VAT number is not a compulsory requirement.
However, Tiktok will still charge you VAT, whether you provide a valid VAT number, invalid VAT number or no VAT number at all.
Tiktok will decide which EU country’s VAT rate to apply to your ad account based on the following situations;
The European country where you registered your Tiktok ad account; To open a Tiktok EU ad account, you’ll be required to provide an EU address. Tiktok will apply the VAT rate of the country which address you provided.
For example; if you provide a Hungary address, Tiktok will apply the Hungary VAT rate of 27%. If you provide a Switzerland address, Tiktok will provide the Switzerland VAT rate of 7.7% etc
If you provide a Valid EU VAT number; providing a valid VAT rate means Tiktok will assume you are a commercial Business and it will apply the VAT rate of the country your Business is registered or incorporated.
If you provide an invalid VAT number; when you provide an invalid VAT number, Tiktok will know that your VAT number is incorrect and it will apply the VAT rate of your country of residence. That is the country whose address you provided as resident addres when creating the Tiktok EU ad account.
If you didn’t provide any VAT number at all; if you do not provide a VAT number at all, Tiktok will take it that you do not have a VAT number and will apply the VAT rate of your country of residence. That is the country whose address you provided as resident address when creating the Tiktok EU ad account.
How to get the lowest VAT on EU Tiktok ad account
The country with the lowest EU Tiktok VAT rate is Switzerland having a VAT of only 7.7 and the Country with the highest EU Tiktok VAT rate is Hungary, having a VAT rate of 27.
To get the lowest possible EU Tiktok VAT lowest rate, you have to create a Tiktok EU ad account with an address in Switzerland. Switzerland being the country with the lowest VAT rate of 7.7
If you don’t have a Switzerland address and know someone who lives in Switzerland, you can ask them to use their address.
On the alternative, you can rent a Switzerland Virtual address here.
In most cases Tiktok do not take any extra steps in verifying this address and it’s sufficient for them to merely see a Switzerland address to apply a 7.7 VAT (the lowest VAT) on your ad purchase.
If you already have a registered company in Switzerland, you can use the Valid VAT number of your Switzerland based Company.
If you do not have a Company based in Switzerland.
For example; if you are an American Company or if you do not have any Company at all, then you should leave the Tiktok EU VAT field empty.
Providing a VAT number is only optional, so you’d still be able to open your EU Tiktok ads account even without providing any VAT number.
We do recommend providing an invalid VAT number as it is unethical to do so.
