Pledge Manager Tax FAQ

What are the tax implications of using Kickstarter's Pledge Manager?

Kickstarter's Pledge Manager operates as a marketplace facilitator. We are responsible for collecting and remitting sales and us tax for items shipped to all 50 US states and Canada, as well as collecting VAT (value-added tax) on items shipped to backers in the EU and the UK.

Separate from any sales and use tax/VAT, you may owe (and have the responsibility to report) national or subnational income, franchise, or other taxes. How much you owe can vary based on a number of factors, including the deduction of project-related expenses.

We highly recommend talking to an accountant or tax advisor  to ensure you are compliant with applicable tax regulations. They can guide you through your particular tax scenario in the most advantageous way possible.

While we can't offer tax advice, we have compiled a guide for financial professionals who may not be familiar with Kickstarter, which is intended to help such professionals understand some of the tax responsibilities you may be responsible for.  Such guide includes coverage of sales and use tax/VAT responsibilities of creators that do not use Kickstarter’s Pledge Manager.

How is tax collection managed in the US?

Kickstarter will automatically calculate, collect, and remit the applicable sales tax on taxable rewards. As a creator, you don't need to manage the tax collection for US backers. However, you will be required to properly identify, and provide the cost of, the items that make up your rewards and add-ons. The cost you provide, in combination with the reward and add-on price, will be used by Kickstarter to calculate the amount of sales tax to collect from backers.

There is additional detail on US tax collection here.

How is tax collection managed in Canada?

Kickstarter’s Pledge Manager will collect and remit applicable Canadian indirect taxes on taxable rewards shipped to Canadian backers. As a creator, you will not need to collect these taxes yourself. However, it is your responsibility to provide complete and accurate information about each item’s value and category. This data will be used to determine the tax to charge each backer.

There is additional detail on Canada tax collection here.

How will Kickstarter approach VAT collection in the pledge manager?

As tax liability varies from country to country, providing rewards to a backer based in a specific region might create a VAT liability for you. For creators using Kickstarter’s Pledge Manager, we will collect VAT (value-added tax) on items shipped to backers in the EU and the UK, when Kickstarter is the deemed supplier and, as authorized by the creator, when the creator is the responsible party.

We have additional information about VAT collection here. 

Are creators based in or shipping to the EU & UK responsible for VAT?

As tax liability varies from country to country, providing rewards to a backer based in a specific region might create a VAT liability for you.

For creators using Kickstarter’s Pledge Manager tool, we will collect VAT (value-added tax) on items shipped to backers in the EU and the UK, when Kickstarter is the deemed supplier and, as authorized by the creator, when the creator is the responsible party. You can read more about this here.

In some cases, as a deemed supplier, Kickstarter will be responsible for remitting VAT collected on the creator's transactions to the relevant tax regulator. In other cases, creators will be responsible for remitting VAT, and any funds collected on Kickstarter toward value-added tax will be disbursed to the creator. Creators will be provided with tax reporting that outlines the responsible party for each VAT transaction.

VAT will be determined by using a combination of the creator’s VAT registration, business location, the shipping origin and destination, and item-based tax codes.

Please note that Kickstarter does not collect VAT for creators who choose not to use Kickstarter’s pledge manager tool. In these cases, ensuring that VAT is correctly accounted for on these transactions is the responsibility of each individual project creator.