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Who is eligible to pay VAT?



5:36 pm on Feb 20, 2008 (gmt 0)

10+ Year Member


I am based in Canada and while signing up with Commission Junction as a Publisher, I am being asked for my VAT number. I do not intend to sell any goods and I am only going to do some affiliate marketing, like promote dating sites that pay per lead. I am now confused about VAT. Will I have to pay some other tax, apart from income tax, on my CJ earnings? Will CJ approve my application and more importantly, send me my payments, even if I do not provide a VAT number? Please help me.

Thanks and regards,



1:11 pm on Feb 21, 2008 (gmt 0)

WebmasterWorld Senior Member 10+ Year Member

Unless you have a legal obligation to be VAT registered you can say to CJ that you don't have a VAT number and they will accept your application.

In the UK the VAT-registration threshold is a turnover of GBP 64,00 - you'll have to check what the threshold is in Canada.

In any case the VAT that you pay will not amount to anything extra anyway.

If, in the UK, where VAT is 17.5%, you earn GBP 100 from a merchant, they will pay you GBP 117.50 and you will pay GBP 17.50 to the government. You still get the GBP 100.

With VAT you act as a tax collector. (But, crucially, not a tax payer - only the end customer actually pays VAT).

Customer pays merchant [sale price] + [VAT]
Merchant pays you [10% of sale price] + [10% of VAT]
You pay government [10% of VAT]

The VAT paid by the customer has been collected by the merchant, passed on to you and you have passed it on to the government.

It took me years to understand this.

Sorry, I know that's UK-specific and you need something Canada-specific, but that should help to illustrate the general principles at any rate.


3:27 pm on Feb 21, 2008 (gmt 0)

10+ Year Member

Thanks buddy. That was most helpful. What this essentially means that I can go ahead and register with CJ without having to provide my VAT number. I will find out what the threshold is. I was worried about CJ witholding payments in case I did not provide a VAT number. But I dont think that should be an issue now. Thanks again for your effort and detailed explanation.




9:45 pm on Feb 22, 2008 (gmt 0)

WebmasterWorld Senior Member 10+ Year Member

Happy to help.

Yes, CJ should have no problem accepting you as a non-VAT-registered business.

N.B. I mistyped the UK VAT turnover threshold as GBP 64,00 when it should have read GBP 64,000.


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