We know that across Europe, Australia, New Zealand and many other countries, people expect to see prices that include VAT, GST or other similar sales taxes. For people in these countries, adding tax on top of the price at checkout can lead to confusion when they see a charge they weren’t anticipating.
To provide them with a better experience, starting today we will be displaying prices that include tax (VAT, GST, etc.) to visitors on your page who are located in any of these countries.
This doesn’t change what they’re paying or what the creator receives. We simply are calculating tax earlier (on the creators’ page rather than at checkout) and show the final price with tax included on the page.
Here’s an example of what audiences in these countries may see when they land on your page. For audiences in the US, Canada, Japan, and other countries not on this list, nothing will change.
I was wondering if there was any A/B testing before implementing this?
I almost got a heart attack seeing the tax included prices on my page yesterday.
I could imagine the price might turn people off this way. While if the price excludes tax, people might click, go through the process and when they see they need to pay tax, they’ll be like “whatever, I’m so far in the process now, I don’t care anymore ”
I had less patrons join yesterday and tonight (13 in stead of 24 and 32 the two days before), so I really hope these tax included prices aren’t the cause of this.
I really don’t like having VAT added on top of the pledge price. I have chosen my tiers based on what people want to pay, not on what I want to earn.
Also, I’m below the income threshold needed to owe the government VAT in my country, and in a few others. So you kind of owe me at least 80 dollars here. But I’ll never see those, I reckon.
What we need are at least some choices as to how VAT is applied. If we’d like it to be included in the sum we set, or put on top of that. Because right now I have to lower all my tiers by roughly 1/5 to get the listed price to be what I want the supporters to pay. Because right now it looks like I’ve suddenly just increased all my tiers. Baaaad!
I came to the forums today searching for an answer as to why people were seeing different pricing based on region. It has confused several of my creator friends, too.
Whatever is happening, it’s not working correctly.
My friend is in the Czech Republic, and I am in France. If he looks at his own page, he sees his prices with the added VAT, but if he looks at my page, he sees the prices listed without the VAT. For me, all of the tiers on all the pages are showing without added VAT. I have another friend who lives in the UK who is seeing VAT on some pages and not others.
Regardless, I feel like this is a bad idea. Creators choose our pricing model very carefully, a lot of thought and research goes into what we feel comfortable charging for different products and services. My $5 tier now shows up as $6.
Exactly, We need an option where we set the price ‘inclusive of all taxes’ and then Patreon deducts the appropriate amount. The math is a bit complex, but it allows me to set the final price of the good displayed to the patron.
I have my tiers set as a compromise between what I want and what my patrons will pay. I’m concerned that displaying the inclusive price in bold and large, and the actual tier price in smaller lighter text.
Granted, I’m in the US and used to seeing the goods price on the shelf with the tax added at the till/register, so my experience may differ from those who have VAT/GST included in the price on the shelf.
Yep, $6 looks a heck of a lot closer to $10 than $5 to the average consumer. There’s a reason that companies often knock off the last cent when selling products. It doesn’t make much logical sense, but $59.99 looks a lot cheaper than $60.
I realize that Patreon is in a bit of a Catch 22 here, they made this change because Patrons were complaining about not being made aware of the added charge, while Creators are now complaining that the charge is being added to their tiers.
Personally, I would like the option to simply eat the cost of the VAT so that neither my Patrons nor my tiers are impacted in any way. I would gladly sacrifice the extra $50 a month it would cost me if it meant that my Patrons weren’t inconvenienced.
Most online stores and subscriptions don’t include the taxes/fees until the last step of the purchase anyways. I would prefer them to have just made the information on the subsequent pages clearer than popping it into the main pledge amount or perhaps just simply adding a “+ taxes” below the tier amount.
It’s been clear for a veeeeery long time that certain monetary amounts shown to customer will change their perception of what they are buying. Like decades upon decades of marketing research on this. So I’m a little concerned how this is going to be perceived and how it might affect creators.
Well. There are countries where it’s the law to actually display prices including tax. In these countries it shouldn’t be optional.
But it would really be best if a creator can set a price including tax so that it’s the same all over the world. Would make it much easier to promote your tiers, especially if you have patrons from all over the place.
There was quite a bit of testing done! We experimented with a few different displays options. Keep us updated if you feel like this display change affected your patron growth.
The way VAT is displayed is not customizable. For more information on how VAT is handled on Patreon, see this article.
The new display including tax only displays to visitors who are located in the countries that are used to seeing tax/vat included in their pricing. Visitors in countries, like the US, who are not used to seeing this will not see a change in display. Hope this helps clarify!
Hey @Temrin, I hear ya! The new display (including tax) only displays to visitors who are located in the countries that are used to seeing tax/vat included in their pricing, like Europen countries, Australia, and New Zealand. Visitors in countries, like the US, who are used to seeing base price + tax will not see a change in display. Hope this helps clarify!
I knew that, and the point I was actually making is that I want to be able to set my tier price inclusive of taxes. So if it’s $5 then the patron is billed $5 and taxes (sales, VAT, GST) are deducted from my share. It’s about me setting the display price, similar to my objection to not wanting the multi-currency option because it changes the display price from what I want.
I’m your customer, the patrons are MY customers, and I should be the one to set the final price, not Patreon. Rather then helping me, all of these changes are interfering with my relationship with my customers.
Oh I see, sorry for misunderstanding your original post. Unfortunately, sales tax has to be applied to the patron/customer and you as a creator can’t eat the price for your patrons.
Having run my own business in multiple states in the US, I can definitively say that I have complete control over pricing. The states did not care about how I represented prices to my customers so long as I remitted the correct tax on my gross sales. So, with 8% tax, I could sell something for $10.08, and send in 8¢ OR sell it for $10 and send in 8¢. The state literally did not care.
I realize you’re not part of the design or development team, but they need to start asking creators about how they want to manage their relationship with patrons, NOT thinki about how Patreon wants to manage their relationship with my customers (patrons).
So what was the outcome of the test? Did more people pledge when the tax included price was shown?
I guess the included prices will look better when they are converted to euros, it’ll be around €15,- and in that way it would look similar to the $15 excluding tax. I am still hesitant about switching to multi currency at the moment though, since the euros will be converted twice. First they’ll be converted to dollars and then at payout they’ll be converted to euros again by PayPal.
This change is ridiculous. Considering Patreon is a big platform for artists, who actually care about how things look, having $16.67 as a tier price just looks ridiculous and now no one can refer to their price by the tier cost (e.g. join my $20 tier where you get 10 maps a month, just $2 per map) because everyone is seeing somethign different.
If you have to force this change, at least let Patreon artists choose whether their tier includes the VAT or not; forcing people to do it how you want for absolutely no reason is crazy. As someone from the UK, I (like the majority of people in the world) buy off international websites constantly where there’s VAT added at the checkout… why you’ve forced us to mess up how our Patreon looks for some weird arbitrary reason is beyond me.
I literally changed all my prices so that they showed as $10 / $15 / $20 on my tier list (because when I viewed it it was all messed up), then I find out that this doesn’t actually show for Americans… so now for my BIGGEST market they see prices like $16.67…
At the risk of sounding like a broken record, Patreon does not appear to be interested in giving creators ANY pricing choices beyond setting the ‘base’ price and ‘base’ currency. All other choices are taken out of our hands. That’s created a mess and has confused the heck out of my patrons who no longer see the specific price tiers I’ve chosen, but what amount to random prices.
In effect, I no longer have control of my messaging to my patrons, who are my customers.
You can try and stealth edit all you like but the email notification sends your first draft. Seems like you’re the one who can’t read because my issue isn’t with VAT, it’s with the arbitrary decision that some people see VAT on tier prices and some people don’t for no other reason than:
To provide them with a better experience, starting today we will be displaying prices that include tax (VAT, GST, etc.) to visitors on your page who are located in any of these countries.
It has nothing to do with the LEGAL REQUIREMENT, it’s they want to decide what provides a better user experience for patrons because they think they know all of our customers better than we do.
As has been pointed out, we’re NOT saying that Patreon should not collect and pay taxes, but that the price displayed should be chosen by creators and displayed as the creator chooses in the currency the creator chooses. VAT/GST can be deducted from the ‘inclusive price’. So can US sales tax for that matter (I’ve done that when I’ve run a business - the price included tax, and I remitted the correct amount).
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