Onlyfans VAT hit: Alternatives? solutions?

[Mila_]

In November last year I joined Onlyfans with low expectations and the platform has done nothing but grow since then. This is great for business as the more creators join a certain platform bringing their fans with them, the easier it becomes to grow your subscribers as there is often an overlap and people like to consolidate their media in a single network. I am happy so many influential people from both the adult world and "vanilla" world are joining OF making our jobs more socially acceptable and bringing fresh eyes to the scene.

However it seems like the company can hardly keep up with the growth rate: stressed platform, lack of crucial functions, poor aesthetics/layout, messy support, and a lack of communications with its models. It's not that I don't understand the reason for the poor performance, I am not expecting much different from a company that has seen their userbase grow exponentially in such a short span, a little bit of chaos and disorder is to be expected when things blow up like this. What I find problematic more than anything is the fact that they have started to charge VAT to all of Europe and the UK overnight without giving creators a heads up which is going to have an impact on everyone's bottom line. I understand they are trying to be a law abiding company since they are based in Europe instead of the US, and I respect that, but we have to face what this means for our income on the one hand, and on the other I do find the fact that they will slap VAT even to tips a bit problematic.

My main issue when it comes to raw income is the fact that Onlyfans has effectively gone from having an 80% payout rate to having a 60% payout rate which is the same cut Myfreecams and Chaturbate take. Now, the difference to me is huge. While I am happy paying MFC and CB a 40% cut of my earnings, I am NOT happy paying this amount to Onlyfans. Here is why:

1) For their 40% cut Myfreecams and Chaturbate provide me with traffic, Onlyfans does not. CB and MFC have a prime quality userbase and I don't have to bring my fans over, I can simply turn on my cam and their users will spend on me. Onlyfans takes 40% but does not provide traffic, nobody can discover me through their platform, they don't even have a homepage with creators listed in it. All the traffic I have on my page I have brought myself.

2) From their 40% cut Myfreecams and Chaturbate pay 15% to payment processors (EPOCH, CCBill, Segpay, etc) for being high risk adult platforms. Onlyfans does NOT present itself as an adult platform, they keep pushing a squeaky clean image on social media, distancing themselves from adult performers, and I am certain this is the reason they avoid having a homepage... so they are paying a very tiny percentage for payment processors which, I think they even process themselves.

3) Users have a limited budget so creators will absorb the 20% hike whether we like it or not. Either we cut our prices by 20% to keep the same volume of transactions as we used to, or we keep the prices the same and see our volume decrease. Either way, that's 20% that will ultimately come from our revenue.

In summary... what Onlyfans offers us is simply a convenient spot to post stuff, hosting and the capacity for micropayments. They are FAR from the only option available if you bring your own traffic. I am asking what are you thinking of doing, if you will be switching platforms, what platforms you are considering, what are the pros and cons? I am evaluating what to do myself, I definitely would choose an american company since they don't have to deal with VAT to begin with and that's better, but I want to see what everyone thinks and what solutions you have come up with

 

[Ava Nicole]

I think the VAT thing will be hitting all fan/subscription sites. It hit Clips4Sale earlier this year. Last week I made a verified account on JustForFans to check it out. Not long after, I got an admin message saying they were trying to sort out their VAT thing but that it would be a necessary change at some point. I’m a US model so it doesn’t really affect me all that much but thought I’d share what I know!

As far as OF alternatives, I’ve done some serious research this past week and signed up on multiple platforms and I wasn’t overly impressed with any of them. I hope something better comes along but until then I’ll be
sticking with OF because nothing else came close.

edit: I can do a breakdown of all the alternative sites I checked out or joined if anyone is interested!

 

[Mila_]

I think the VAT thing will be hitting all fan/subscription sites. It hit Clips4Sale earlier this year. Last week I made a verified account on JustForFans to check it out. Not long after, I got an admin message saying they were trying to sort out their VAT thing but that it would be a necessary change at some point. I’m a US model so it doesn’t really affect me all that much but thought I’d share what I know!

As far as OF alternatives, I’ve done some serious research this past week and signed up on multiple platforms and I wasn’t overly impressed with any of them. I hope something better comes along but until then I’ll be
sticking with OF because nothing else came close.

edit: I can do a breakdown of all the alternative sites I checked out or joined if anyone is interested!

Please do the breakdown! I would be super interested in reading it.

The VAT affects anyone with European/UK subscribers since a big slice of spending demographic comes from UK/Germany/Scandinavia and a smaller one from France/Italy.

 

[squirtalot]

The VAT affects anyone with European/UK subscribers since a big slice of spending demographic comes from UK/Germany/Scandinavia and a smaller one from France/Italy.

Thank you for the information! When did this happen?
Does this mean that we receive 60% on purchases made by European clients or by everyone?
I think I can offer a Solution : Ismygirl
This was the first site that verified me and I found it to be very professional. It's got a very high end feel to it and the clients are pretty high end too. I personally find it best for the sale of "Premium Vids" and "Kustom Vids". They also have a live streaming options like free for all / free for subs / Pay per minute / private shows but this always was a bit meh for me.

They offer the models 70% of earnings and during the months of March and April this year, it was 90%

 

[Mila_]

Thank you for the information! When did this happen?
Does this mean that we receive 60% on purchases made by European clients or by everyone?

The VAT changes went into effect on July 1st and I personally found out they were going to do it on June 29th or 30th. We are currently only receiving 60% of whatever European/UK customers pay, but it's "hidden" from us... here is how it works:

BEFORE:
You sell something for $10, user pays $10, you receive $8.

NOW:
You sell something for $10, user pays $12, you receive $8.

So from your perspective things are exactly the same: you are charging them $10 and receiving $8. What you don't know is when the user pays he is actually getting charged $12 instead. So even though you set the price at $10 they pay an extra 20% that is hidden from you.

This affects us because if a guy has a $100 budget to spend on OF per month, that budget is not necessarily going to get increased by 20%. So while before from his budget creators would get $80 and the platform would get $20 out of his budget and the user would walk away with $80 worth of content/interaction, now creators get $60, the user walks away with $60 worth of content/interaction (having paid for $100) and the platform keeps a whooping 40%.

Users will react differently to this I am sure, those with more to spare might end up spending more, but the vast majority of users will have to prioritize and what will happen is their favorite content creators will get a bigger cut from their budget as before and they will drop their peripheral subscriptions and models they used to follow. So from my perspective this is going to hit models of modest followings the hardest.

 

[DJ_Pioneer]

We should already have paid VAT that we didn't is infuriating, I utterly detest tax cheats. The reason that models cannot see what we Europeans pay in VAT is because it differs from country tou country, here in Sweden we pay 25% VAT for something like Onlyfans. If I knew a site that should be paying VAT wasn't I wouldn't sign up for it. I might get less content in the end but I get hell of a lot better things from my taxes.

 

[Mila_]

We should already have paid VAT that we didn't is infuriating, I utterly detest tax cheats. The reason that models cannot see what we Europeans pay in VAT is because it differs from country tou country, here in Sweden we pay 25% VAT for something like Onlyfans. If I knew a site that should be paying VAT wasn't I wouldn't sign up for it. I might get less content in the end but I get hell of a lot better things from my taxes.

None of them did (CB, MFC, etc) because they are based in the US, therefor they don’t have to pay taxes in Europe, Onlyfans is the first digital adult entertainment company I have seen do such a move. I have never seen American companies charge tax to users overtly at least. The first company with a similar product to OF based of Cyprus, Cayman Island, Israel, etc will win.

 

[Fatquack]

Actually non EU companies are also supposed to add VAT for all their EU customers. Not all of them do of course, but the tax offices are getting tougher on enforcement.

VAT on digital services/MOSS: What services are covered? - Your Europe

Learn more about the MOSS scheme and if you need to register in an EU country you sell to. There are 2 schemes: Union & non-Union scheme.

europa.eu

 

[CheeseMoon]

If I knew a site that should be paying VAT wasn't I wouldn't sign up for it. I might get less content in the end but I get hell of a lot better things from my taxes.

Agreed, and if sites are taking a cut from the model payout to cover VAT, it's fraud. Buyers are supposed to pay taxes themselves, not whatever (foreign) model you buy stuff from. Now I wonder where the VAT money actually ends up. Probably not in the coffers of the government where I live ...

 

[DoD404]

Does this mean that we receive 60% on purchases made by European clients or by everyone?

Not exactly but not far.
VAT is counted on the raw price, and added to customer's charge. OF acts as a tax collector for government. If you want to maintain your customer's price sharply, you have to divide by 1.2 your 'raw price... then both model and platform would loose.

example :
before : a Raw price of 10$ => 8$ to model , 2$ to platform - customer pay 10$
after : 10/1.20 = Raw price of 8.33$ => 6.66 to model , 1.66 to platform and 1.66 VAT = 9.99$ paid by customer (=10$... with all the cents) So, you get 66% of what user pays, OF gets 16.6% and gvt also. (33% of user's money goes to OF and gvt)

So, to maintain 'more or less', I would set 9$ for a new amount, your US, Russian, Australian customers will be (a bit) happy.

Also, think that your european customer are already very used with this notion of VAT. We see it on any invoice of any purchase we make. I can bet that most of your users would accept it as being a normal action. Though, they may have to cut a bit on their budget, as Mila said, but they can also choose it on other posts than this subscription (cb tokens ie, who knows...) I don't think that this simple VAT adjustment will impact your more than this 2020's beginning of year :/
This owes a try : maintain your prices, communicate the very minimum with them and you'll have feed backs.

 

[Deleted member 37064]

For those in the US, and I'd venture many other countries, it's no different than sales/consumption tax that's added on to a purchase. Though, the Federal gov't doesn't charge a federal tax, some states will charge a tax on internet sales if the company has a physical presence in the state you live in. It also depends on what's being sold to. Rarely is digital content taxed. Which I see changing in the near future.


I will add that there is a small browse section on the right side of the screen where it is about 5 pages of creators. But, it's really nothing more than their title bar. The lack of a proper content browsing capability is bothersome, and as a user I find that the lack of a "preview" of a creator's content is very limiting. Yes, creators can do a free account. But, why should they have to? Why should members sign up for a free account that is typically different than paid content and they'd then have to sign up for a paid subscription account.

Think of it, on other platforms you get a little bit of a preview of what the content is. Whether it's cam sites, or clipsites, there's usually either a preview of a couple of seconds of a vid, or a couple of pictures or the stream. Same with subscriber content websites, they'd offer a "tour" so to speak. On OF, nothing of the sort. I signed up for three free accounts and all three of them I got heavily spammed by each of the content creators promoting others and themselves more than actual content. Yes, it's meant to promote and get people to subscribe. But, when it's so much promotion that it fills your entire screen as you scroll through it's a major turn off. It was so bad that it hid the content I was paying for. I unsubscribed from the free accounts and refused to sign up for the paid subscription just because of that.

There some significant room for improvement with OF. Being that it's owned by MFC I'm surprised that they didn't move it to the US. But, then again, being it's owned my MFC, I'm not that surprised they really haven't done anything with it in terms of improvement of the site, nor the backend. I'm sure they're still struggling with flash on MFC as their primary concern.

 

[Mila_]

Actually non EU companies are also supposed to add VAT for all their EU customers. Not all of them do of course, but the tax offices are getting tougher on enforcement.

VAT on digital services/MOSS: What services are covered? - Your Europe

Learn more about the MOSS scheme and if you need to register in an EU country you sell to. There are 2 schemes: Union & non-Union scheme.

europa.eu

Well this is worrisome as CB and MFC didn’t collect VAT up til this point and I am guessing they will have to start doing it.. so models will be earning a 30% payout cause that % has to come from somewhere.

 

[AmberCutie]

This is not a site taking a higher % issue, this is customers needing to pay a tax on a transaction, based on their country.

Also, think that your european customer are already very used with this notion of VAT. We see it on any invoice of any purchase we make. I can bet that most of your users would accept it as being a normal action.

I feel like this is probably the situation. They're going to see the tax at checkout and shrug it off like every other purchase they make.

I don't think we as models should start pushing the thought into peoples' heads that we're making a smaller % from the SITE now because the site is starting to follow tax laws. I'd really prefer we not turn this into a "x site pays % now" thread, as I feel it is misleading. When I first read the OP, I actually considered removing it from view and asking @Mila_ if she'd like to re-word it and repost. But I'm hoping people read the rest of the thread for better context as to what's really happening.

and if sites are taking a cut from the model payout to cover VAT, it's fraud.

They are not. The customer is paying it.

If I recall, Pornhub has been charging VAT for a while now, so OF is not the first adult site to tackle the issue. I think the way PH handles it is changing the displayed price to the customer to include the amount of VAT they'd be charged on purchase. I almost think that's more confusing/misleading than just adding the VAT at checkout.

 

[Mila_]

This is not a site taking a higher % issue, this is customers needing to pay a tax on a transaction, based on their country.

I feel like this is probably the situation. They're going to see the tax at checkout and shrug it off like every other purchase they make.

I don't think we as models should start pushing the thought into peoples' heads that we're making a smaller % from the SITE now because the site is starting to follow tax laws. I'd really prefer we not turn this into a "x site pays % now" thread, as I feel it is misleading. When I first read the OP, I actually considered removing it from view and asking @Mila_ if she'd like to re-word it and repost. But I'm hoping people read the rest of the thread for better context as to what's really happening.


They are not. The customer is paying it.

If I recall, Pornhub has been charging VAT for a while now, so OF is not the first adult site to tackle the issue. I think the way PH handles it is changing the displayed price to the customer to include the amount of VAT they'd be charged on purchase. I almost think that's more confusing/misleading than just adding the VAT at checkout.

I think I worded it perfectly fine. In practice we are getting paid 60% now. Whether that goes for taxes or payment processors or affiliates is a different issue. I also don’t think members will “shrug” it off because for the vast majority of them they have a budget and it isn’t likely to change simply because “oh it’s tax, Let’s take a bite off my utilities then”. Members will have to receive less for the same amount of money and models will get compensated less for the same spending by the members. This is something we all should definitely be discussing because for all practical purposes OF went from giving us 80% to 60% overnight. As of today other sites like Myfreecams and Chaturbate have not implemented this so I imagine there are similar subscription sites who are based elsewhere who are also not collecting taxes for the European Union. In any case they could have communicated this to us in advance yet they chose not to. You can kill the thread if you want but this is something we should absolutely be discussing.

 

[AmberCutie]

for all practical purposes OF went from giving us 80% to 60% overnight.

I just feel stating it this way spins it in a very negative sense and I disagree with it.

 

[Mila_]

I just feel stating it this way spins it in a very negative sense and I disagree with it.

It’s not a spin, it’s the practical reality. Members pay 12, we get 8. That’s 60%

 

[AmberCutie]

k

 

[CheeseMoon]

I think the way PH handles it is changing the displayed price to the customer to include the amount of VAT they'd be charged on purchase. I almost think that's more confusing/misleading than just adding the VAT at checkout.

This is the normal, accepted way to include VAT on items and services in Europe. It's not like you can opt out of paying it, so nobody cares what the price is excluding VAT. Everybody knows the tax authorities slap (usually) 25% on top of the normal price. It's there and It'll never go away. I know things are different in the US though, with all the different VAT laws and percentages that are in effect.

Your other points about sites/VAT/not fraud etc. is noted. Point taken. I misread/misunderstood.

 

[AmberCutie]

This is the normal, accepted way to include VAT on items and services in Europe. It's not like you can opt out of paying it, so nobody cares what the price is excluding VAT. Everybody knows the tax authorities slap (usually) 25% on top of the normal price. It's there and It'll never go away. I know things are different in the US though, with all the different VAT laws and percentages that are in effect.

Your other points about sites/VAT/not fraud etc. is noted. Point taken. I misread/misunderstood.

Yeah maybe I feel it's more confusing because our tax is added on at time of checkout. In fact, we have a crazy high extra tax on alcohol here, and at Costco where we buy at wholesale prices, they DO list the high alcohol tax on the sticker, but not regular sales tax, so I always get confused on prices on alcohol there!

 

[AmberCutie]

I misread/misunderstood.

And just to reiterate what I was saying earlier, this was my concern. That people would misinterpret the situation due to the way the issue is being worded.

Now that I've said my thoughts on that, I'm not going to argue with the way people want to process this in their head.

 

[Alisa]

Few points here:

1. VAT for European buyers of electronic goods is obligatory for every site offering those goods, some just haven't been caught and regulated yet.
C4S, OF and MV do it for now out of the sites I use. Others will have to follow soon whether we like it or not.

2. Buyers absolutely do get bothered by it, I got quite a few messages on the first day OF implementing it asking how they can avoid paying it.
I am not lowering my prices, and most buyers have a budget, and around 20% of it goes to taxes now instead of to me (when it went to me I paid that VAT myself at the end of each year - now don't have to pay it - so it doesn't even matter anyway). So in that sense, we are absolutely earning less now, it is not the site taking it, however.

3. There's nothing we can do other than maybe use the sites that are flying under the VAT radar for now, until we can - but again, if you're from Europe, you pay that VAT yourself.

 

[LunaLuuvz]

Have you checked AVN Stars? https://stars.avn.com/explore
I haven't sign up but I've seen a few top models joining and I believe they are based in the USA

 

[Fatquack]

There are actually quite a few adult paysites that don't show the VAT at the checkout, but they pay it anyway. Especially those where the majority of customers are from outside the EU. If you charge $30 a month you do of course have a bit more leeway to do that.
And some just raised their prices for everyone when this was implemented.

 

[Mila_]

Have you checked AVN Stars? https://stars.avn.com/explore
I haven't sign up but I've seen a few top models joining and I believe they are based in the USA

Isn’t it more similar to Manyvids than Onlyfans though? Maybe that’s just my perception as someone who hasn’t even registered

 

[melanieoncam]

I'm not fully understanding this. All sites will have to do this now won't they? If they expect to operate legally, right?

Nearly all my customers are in the U.S. so I haven't been paying attention. I feel like since the site is owned by MFC they can pay those back taxes for the european money they took in. They should have plenty of cash to cover it.

I wonder what percentage of customers are from Europe vs USA

 

[Mila_]

I'm not fully understanding this. All sites will have to do this now won't they? If they expect to operate legally, right?

Nearly all my customers are in the U.S. so I haven't been paying attention. I feel like since the site is owned by MFC they can pay those back taxes for the european money they took in. They should have plenty of cash to cover it.

I wonder what percentage of customers are from Europe vs USA

Tax law might seem super easy and straight forward to a plain Jane like me or anyone who hasn’t studied tax law, but there are a number of ways companies can work out taxes legally with different results this is why companies hire tax consultants and find alternative ways of doing things. Each company will choose their own strategy and find their own way to implement the changes (or not) and all we can do is wait and see. So far neither MFC nor Chaturbate have said or done anything to my knowledge, and those are the only 2 sites I have worked on. We will wait and see what happens there and if any companies pop up with proactive owners who can find better ways to work with the current law.

 

[Olive]

There's also a difference in what these sites offer. Streaming vs subscriptions. I suspect the difference might be in there and how things are worded. CB for instance talks about buying tokens as a digital type of currency that may or may not have a specific value. And that tips are always just a donation and not a payment for a specific service. Though one can argue against that for buying videos and recurring payment for a fanclub.

There is an obvious difference between someone paying a set amount of money to receive something in return VS an appreciation tip. Might be how some sites are "working the system". Just my guess, but I could be wrong and streamsites will have to start changing things too. VAT-taxes are quite complicated.

 

[Keanu]

It’s not a spin, it’s the practical reality. Members pay 12, we get 8. That’s 60%

Don’t mean to be that guy but it’s 66.66%

 

[DJ_Pioneer]

None of them did (CB, MFC, etc) because they are based in the US, therefor they don’t have to pay taxes in Europe, Onlyfans is the first digital adult entertainment company I have seen do such a move. I have never seen American companies charge tax to users overtly at least. The first company with a similar product to OF based of Cyprus, Cayman Island, Israel, etc will win.

I have seen American companies charge VAT before, it is nothing new. Also Cyprus is part of the EU and I believe their VAT is 17%. Companies operating in countries outside of the EU has to pay VAT to the country where the customer lives.

Agreed, and if sites are taking a cut from the model payout to cover VAT, it's fraud. Buyers are supposed to pay taxes themselves, not whatever (foreign) model you buy stuff from. Now I wonder where the VAT money actually ends up. Probably not in the coffers of the government where I live ...

No we as consumers are not supposed to pay in the VAT ourselves the site that the model works on are supposed to do it since they are the once taking our payment.

This is the normal, accepted way to include VAT on items and services in Europe. It's not like you can opt out of paying it, so nobody cares what the price is excluding VAT. Everybody knows the tax authorities slap (usually) 25% on top of the normal price. It's there and It'll never go away. I know things are different in the US though, with all the different VAT laws and percentages that are in effect.

Your other points about sites/VAT/not fraud etc. is noted. Point taken. I misread/misunderstood.

VAT is between 15% (this is the lowest it can be) and 27% which is the highest a country has, I think it is Hungary. Most countries has less than 25% only three countries has 25% or more.

I'm not fully understanding this. All sites will have to do this now won't they? If they expect to operate legally, right?

Nearly all my customers are in the U.S. so I haven't been paying attention. I feel like since the site is owned by MFC they can pay those back taxes for the european money they took in. They should have plenty of cash to cover it.

I wonder what percentage of customers are from Europe vs USA

All companies have had to pay VAT for sales made to EU customers since 2015.

There's also a difference in what these sites offer. Streaming vs subscriptions. I suspect the difference might be in there and how things are worded. CB for instance talks about buying tokens as a digital type of currency that may or may not have a specific value. And that tips are always just a donation and not a payment for a specific service. Though one can argue against that for buying videos and recurring payment for a fanclub.

There is an obvious difference between someone paying a set amount of money to receive something in return VS an appreciation tip. Might be how some sites are "working the system". Just my guess, but I could be wrong and streamsites will have to start changing things too. VAT-taxes are quite complicated.

VAT has to be paid on every transaction a customer does. If tokens are used the transaction is considered to have taken place when the tokens was bought so that is when VAT should be paid since tokens are not considered a currency. If a video is bought with a real currency then that is when the transaction takes place and VAT should be paid. Whether it is a VOD, a subscription or an appreciation tip doesn't matter as soon as a transaction takes place the site should pay VAT.

 

[AmberCutie]

k

After a separate conversation I have had with someone on this subject, I am starting to realize the reason that @Mila_ and I were disagreeing so harshly is that we were making different points without realizing it. I think, at least.

So sorry for the 'k' as that was my quick emotional reaction to completely being unable to argue what I thought was a valid point with someone I actually like. Hence me still thinking 'bout it. (I have no problems brushing off a failed discussion with people I don't feel so warmly about. )

Anywho... My ultimate point was Onlyfans is still paying out 80% to us. Their platform offering is that they give us 80% of WHAT WE ARE CHARGING on our page. If I price something at 10, I'm still getting 8. If the original points were that we are making less of a % of WHAT THE MEMBER ACTUALLY SPENDS then of course, that's the technical facts.

But I am confused about something that maybe someone more well versed in VAT could help with: we've seen a post in MO about OF sending a payout with an extra amount with (VAT) next to it, as if WE the models need to pay it...

Example with amounts censored due to it being from models only even though it doesn't give any identifying info...



On another note: as far as the article people are up in arms and sound like they're quitting Onlyfans over: https://news.sky.com/story/onlyfans...an-three-years-worth-of-unpaid-taxes-12022345 it says right there in the article that OF is not worried about any adjustments/payments they're going to have to take care of to rectify their situation.

I think people jumping ship because they think the site is going to tank is silly. It's justifiable to think maybe some of your more tightly budgeted EU fans may need to re-evaluate their subscriptions or spending but IMO the only reason to completely panic is if over 50% of your subscribers are tightly budgeted EU fans.