Consumers living in the EU must pay VAT on digital goods at the rate applicable in their own country.
It's your responsibility to make sure that you comply fully with tax laws wherever your business operates.
You should familiarize yourself with EU VAT rules as they apply to you.
Sufio can help you set up your store to follow EU VAT regulations, including everything from capturing and validating your business customers' EU VAT registration numbers and setting them as tax exempt when applicable, to creating invoices that are fully compliant in Canada and the countries of the European Union. Business customers with valid VAT numbers are not charged VAT during checkout.
Digital goods are defined in the legislation as broadcasting, telecommunications, and services that are electronically supplied instead of shipped.
Gift cards sent online are not included in the definition.
For example, according to the United Kingdom HM Revenue & Customs, the following are covered by the new rules: For digital goods, you must now charge VAT based on the buyer's country, not on your location.
For example, if you're a Dutch merchant and you sold a digital product to a customer in Germany, you'll have to charge the customer the German VAT rate of 19%.
Enable our EU Digital VAT Rates feature to make this process easier.
You are now required to obtain two pieces of evidence of the buyer's location.