4 ms·
>> It's not that complicated. Actually, it is complicated. If you are selling a service from the US to European end-users, you owe VAT in each European country
by Hermel 13y ago
>> It's not that complicated.
Actually, it is complicated. If you are selling a service from the US to European end-users, you owe VAT in each European country you have customers in. You can simplify the process with a special registration with the tax offices in one country (e.g. Germany) and send all the owed taxes there. They will then further distribute it to the other countries. Also note that to do it correctly, you need to charge the right rate in each country. Generally, every EU country has a different tax rate and every few months, it changes somewhere. In order to be able to automate this, the EU offers an API that returns current VAT rates.
To further complicate the issue, there are numerous exceptions. E.g. special rates for food and touristic services, that differ from country to country. Things are simpler when selling to companies, in which case it is the responsibility of the importing buyer to declare VAT correctly. But to do so, you need to ask your users whether they are companies and if yes, they have to provide you with their VAT registration number so you can validate them.
- tzs 13y ago> You can simplify the process with a special registration with the tax offices in one country (e.g. Germany) and send all the owed taxes there. They will then further distribute it to the other countries. Also note that to do it correctly, you need to charge the right rate in each country. If you are selling apps or other download software to end users, I don't believe that the last sentence applies. These are classified as sales of services, not sales of goods, and services (with a bunch of exceptions) are taxed at the rate of the place of the provider. At least, this is what our UK accountants told us, as a US company with sales in the EU. We are registered in the UK (I'm not sure exactly what kind of entity we have there...a subsidiary, and agent, or something else) and all our EU sales are from our UK entity. The accountants said we should charge UK VAT rate to all customers, and we report and pay to the UK. Note: I'm not sure exactly what our arrangement is in the UK. It is possible that we actually have a UK subsidiary, and that is the seller for our EU sales. This could mean that we are under different rules than a US company accepting orders from the EU. As always, consult an expert who is familiar with your particular situation before acting.
- deleted 13y ago[deleted]
- k-mcgrady 13y agoCollecting it might be complicated but my point was the concept of VAT itself is not that complicated.