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Should I charge Paddle VAT/tax for payouts?

No. The way this works is that when you as the seller sell your product to Paddle, the sale of the software (or any digital content) is a cross-border transaction between two businesses (B2B) and is subject to reverse charge in the country of the buyer’s tax residency (i.e. UK for Paddle).

From your perspective, no tax is charged to Paddle as the supply is taxable in the country of the buyer (i.e. Paddle) through the reverse charge mechanism, meaning we charge ourself VAT and then claim it back.

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