How do taxes work with Patreon?
Many creative freelancers choose to work with Patreon these days. Instead of billing your clients separately for each sale, they can support you with ongoing projects for a fixed fee in the month. But, you are still providing a service to your clients. How does this work with taxes?
Patreon has 2 FAQs for this themselves, but they can be unclear.
- https://support.patreon.com/hc/en-us/articles/205259549-How-VAT-works-for-creators-on-Patreon
- https://support.patreon.com/hc/en-us/articles/360047578411-EU-Creator-Frequently-Asked-Tax-Questions
That's why the Bookie has collected and summarized the most important information for you here.
Patreon already collects VAT in your name from your clients. They check where your clients are located, and charge the local tax rate. For example, a Patron in the Netherlands might pay 21% in VAT, while one in Germany will only be charged 19%. They are being charged through the One Stop Shop Directive (OSS), but you don't have to worry about this. You don't need to withhold VAT over your income. The income you receive from Patreon (after VAT and costs), are reverse charged from outside the EU. You specify this income as such in the Bookie webapp.
The remaining amount of money will be added to your sales, and your profit. You'll pay regular Dutch income tax over this. What seemed complicated at the start is easy in practice. Just make sure your monthly income is registered well, and taxwise it'll be sorted out in seconds.