However, your examples are not the best: GDPR and Cookie Law are actually quite good. Regarding the GDPR, I like being able to obtain all the data a business has on me, and to demand that it be deleted. As for the Cookie Law, it\u2019s only a problem for websites using them for tracking people: you are not required to get agreement from the user to use cookies for things like logging in.
Those annoying pop-ups almost everywhere are a disinformation campaign to turn users against that law.
Now, there are other things like the Link Tax you mentioned and the MOSS (VAT on digital services), which means having to charge/pay different VAT rates depending on the user\u2019s country (which you need to justify with 3 different pieces of evidence) that are a big burden on small businesses while not affecting much the big ones to which they were supposedly directed.
MOSS: https://europa.eu/youreurope/business/taxation/vat/vat-digit...
The end effect of those Bizantine regulations is that big companies just use them as loopholes while small businesses get weighted down with them.
Your last line summarizes it well: \u201cThe EU is to the German establishment what the USSR was to the Russian establishment.\u201d"},"story_title":{"matchLevel":"none","matchedWords":[],"value":"Just how complicated could it be to register a German company?"},"story_url":{"matchLevel":"none","matchedWords":[],"value":"https://major-grooves.medium.com/just-how-complicated-could-it-be-to-register-a-german-company-e5eb6e50db79"}},"_tags":["comment","author_AlbertoGP","story_33586536"],"author":"AlbertoGP","children":[33592434,33592809,33594313],"comment_text":"I agree with your general point that the EU does not know how to make life easy for small businesses.
However, your examples are not the best: GDPR and Cookie Law are actually quite good. Regarding the GDPR, I like being able to obtain all the data a business has on me, and to demand that it be deleted. As for the Cookie Law, it\u2019s only a problem for websites using them for tracking people: you are not required to get agreement from the user to use cookies for things like logging in.
Those annoying pop-ups almost everywhere are a disinformation campaign to turn users against that law.
Now, there are other things like the Link Tax you mentioned and the MOSS (VAT on digital services), which means having to charge/pay different VAT rates depending on the user\u2019s country (which you need to justify with 3 different pieces of evidence) that are a big burden on small businesses while not affecting much the big ones to which they were supposedly directed.
MOSS: https://europa.eu/youreurope/business/taxation/vat/vat-digit...
The end effect of those Bizantine regulations is that big companies just use them as loopholes while small businesses get weighted down with them.
Your last line summarizes it well: \u201cThe EU is to the German establishment what the USSR was to the Russian establishment.\u201d","created_at":"2022-11-14T10:43:45Z","created_at_i":1668422625,"objectID":"33592309","parent_id":33591991,"story_id":33586536,"story_title":"Just how complicated could it be to register a German company?","story_url":"https://major-grooves.medium.com/just-how-complicated-could-it-be-to-register-a-german-company-e5eb6e50db79","updated_at":"2024-09-20T12:32:47Z"},{"_highlightResult":{"author":{"matchLevel":"none","matchedWords":[],"value":"stdbrouw"},"comment_text":{"fullyHighlighted":false,"matchLevel":"full","matchedWords":["vat","moss","digital","services"],"value":"Hmm, are you sure there is a difference between consumers and businesses when it comes to VATMOSS? Google, for example, charges VAT for digital services such as Google Suite even when you provide a valid European VAT number. (As a business customer, this doesn't affect me, as I simply get to deduct this on my own return.)"},"story_title":{"fullyHighlighted":false,"matchLevel":"partial","matchedWords":["vat"],"value":"Show HN: A REST API for Calculating VAT in the EU"},"story_url":{"matchLevel":"none","matchedWords":[],"value":"https://vatmossapi.com"}},"_tags":["comment","author_stdbrouw","story_14076997"],"author":"stdbrouw","children":[14081621],"comment_text":"Hmm, are you sure there is a difference between consumers and businesses when it comes to VATMOSS? Google, for example, charges VAT for digital services such as Google Suite even when you provide a valid European VAT number. (As a business customer, this doesn't affect me, as I simply get to deduct this on my own return.)","created_at":"2017-04-10T15:58:48Z","created_at_i":1491839928,"objectID":"14079590","parent_id":14077707,"story_id":14076997,"story_title":"Show HN: A REST API for Calculating VAT in the EU","story_url":"https://vatmossapi.com","updated_at":"2024-09-20T00:40:18Z"},{"_highlightResult":{"author":{"matchLevel":"none","matchedWords":[],"value":"petercooper"},"comment_text":{"fullyHighlighted":false,"matchLevel":"full","matchedWords":["vat","moss","digital","services"],"value":"VATMOSS has no relevance to B2B transactions (luckily!) but international businesses providing digital services to EU customers above a certain amount have been technically required to register since around 2003 - see http://www.taxamo.com/european-vat-on-e-services/ - this is why some US Web hosting providers will charge you VAT, but most (about 1% allegedly!) don't (and, I personally feel, they shouldn't).
The other issue is I don't believe there's any such thing as digital goods - they're considered electronically supplied services. Things like Web hosting are included in this. I'm not sure what purchases you're making from the US, but in my case things like Web hosting, Mailchimp, Pluralsight, videos, etc. all of these are e-services that I have to reverse charge."},"story_title":{"fullyHighlighted":false,"matchLevel":"partial","matchedWords":["vat","moss"],"value":"Patreon to Europe on #VATMOSS: \u201cNot our problem, mate.\u201d"},"story_url":{"fullyHighlighted":false,"matchLevel":"partial","matchedWords":["vat","moss"],"value":"https://idea15.wordpress.com/2015/02/04/patreon-to-europe-on-vatmoss-not-our-problem-mate/"}},"_tags":["comment","author_petercooper","story_9022054"],"author":"petercooper","children":[9023611],"comment_text":"VATMOSS has no relevance to B2B transactions (luckily!) but international businesses providing digital services to EU customers above a certain amount have been technically required to register since around 2003 - see http://www.taxamo.com/european-vat-on-e-services/ - this is why some US Web hosting providers will charge you VAT, but most (about 1% allegedly!) don't (and, I personally feel, they shouldn't).
The other issue is I don't believe there's any such thing as digital goods - they're considered electronically supplied services. Things like Web hosting are included in this. I'm not sure what purchases you're making from the US, but in my case things like Web hosting, Mailchimp, Pluralsight, videos, etc. all of these are e-services that I have to reverse charge.","created_at":"2015-02-09T20:37:07Z","created_at_i":1423514227,"objectID":"9023531","parent_id":9023503,"points":null,"story_id":9022054,"story_title":"Patreon to Europe on #VATMOSS: \u201cNot our problem, mate.\u201d","story_url":"https://idea15.wordpress.com/2015/02/04/patreon-to-europe-on-vatmoss-not-our-problem-mate/","updated_at":"2023-09-07T02:04:28Z"},{"_highlightResult":{"author":{"matchLevel":"none","matchedWords":[],"value":"Jongseong"},"comment_text":{"fullyHighlighted":false,"matchLevel":"full","matchedWords":["vat","moss","digital","services"],"value":"No, VAT MOSS Return periods are calendar quarters, so you need to submit quarterly statements: https://www.gov.uk/government/publications/revenue-and-custo... This has nothing to do with income. This is because anyone who supplies digital services to other EU countries is considered a business. Registering with a couple of government bureaucracies (as an aside, let's see how well they can handle about a million new registrants in 2015 assuming everyone tries to follow the new rules) and completing quarterly VAT returns might be completely normal for small businesses of more than a few people, but for the millions of self-employed people who have never had to deal with any of this (and who are finding out about the rule change only in the last few weeks) this is a nightmare."},"story_title":{"fullyHighlighted":false,"matchLevel":"partial","matchedWords":["vat"],"value":"\u201cI\u2019m in the US \u2013 what if I just ignore the EU VAT changes?\u201d"},"story_url":{"fullyHighlighted":false,"matchLevel":"partial","matchedWords":["vat"],"value":"http://www.happybootstrapper.com/2014/im-us-whatll-happen-just-ignore-eu-vat-changes/"}},"_tags":["comment","author_Jongseong","story_8767231"],"author":"Jongseong","children":[8773380],"comment_text":"No, VAT MOSS Return periods are calendar quarters, so you need to submit quarterly statements: https://www.gov.uk/government/publications/revenue-and-custo... This has nothing to do with income. This is because anyone who supplies digital services to other EU countries is considered a business. Registering with a couple of government bureaucracies (as an aside, let's see how well they can handle about a million new registrants in 2015 assuming everyone tries to follow the new rules) and completing quarterly VAT returns might be completely normal for small businesses of more than a few people, but for the millions of self-employed people who have never had to deal with any of this (and who are finding out about the rule change only in the last few weeks) this is a nightmare.","created_at":"2014-12-19T09:59:57Z","created_at_i":1418983197,"objectID":"8771642","parent_id":8770731,"story_id":8767231,"story_title":"\u201cI\u2019m in the US \u2013 what if I just ignore the EU VAT changes?\u201d","story_url":"http://www.happybootstrapper.com/2014/im-us-whatll-happen-just-ignore-eu-vat-changes/","updated_at":"2024-09-19T21:28:08Z"},{"_highlightResult":{"author":{"matchLevel":"none","matchedWords":[],"value":"AverageBanana"},"comment_text":{"fullyHighlighted":false,"matchLevel":"full","matchedWords":["vat","moss","digital","services"],"value":"These rules only affect cross-border sales within the EU. Any non-EU business supplying digital services direct to a customer in the EU will be affected. B2B supplies do not come under the scope of these rules. There's a lot of chatter on Twitter (#VATMOSS) about the new rules (mostly micro-businesses). The thing to remember is that EU member states with a high number of digital service customers will see a boost in VAT take as the VAT is accountable at the place of consumption. EDIT: I've have noticed these guys mentioned in the conversation: https://www.taxamo.com/#solution - they have developed an EU VAT compliance solution. HMRC have also released further information about the new rule changes, more details here: https://www.gov.uk/government/publications/vat-supplying-dig.... The UK, by the way, has estimated that they will gain a VAT windfall of \u00a31.2 billion between 2015 and 2019. It is now in the interests of EU member states to enforce collection of this VAT, as they will be the ones to benefit. The old (2003) rules meant a non-EU business could just set up in a low-tax jurisdiction and route all supplies via that establishment. Not possible with new rules, that's the key change."},"story_title":{"fullyHighlighted":false,"matchLevel":"partial","matchedWords":["vat"],"value":"EU\u2019s New VAT Rules Could Create a Mess for Startups"},"story_url":{"fullyHighlighted":false,"matchLevel":"partial","matchedWords":["vat","moss"],"value":"http://techcrunch.com/2014/11/25/eus-new-vatmoss-rules-could-create-a-vatmess-for-startups/"}},"_tags":["comment","author_AverageBanana","story_8657543"],"author":"AverageBanana","comment_text":"These rules only affect cross-border sales within the EU. Any non-EU business supplying digital services direct to a customer in the EU will be affected. B2B supplies do not come under the scope of these rules. There's a lot of chatter on Twitter (#VATMOSS) about the new rules (mostly micro-businesses). The thing to remember is that EU member states with a high number of digital service customers will see a boost in VAT take as the VAT is accountable at the place of consumption. EDIT: I've have noticed these guys mentioned in the conversation: https://www.taxamo.com/#solution - they have developed an EU VAT compliance solution. HMRC have also released further information about the new rule changes, more details here: https://www.gov.uk/government/publications/vat-supplying-dig.... The UK, by the way, has estimated that they will gain a VAT windfall of \u00a31.2 billion between 2015 and 2019. It is now in the interests of EU member states to enforce collection of this VAT, as they will be the ones to benefit. The old (2003) rules meant a non-EU business could just set up in a low-tax jurisdiction and route all supplies via that establishment. Not possible with new rules, that's the key change.","created_at":"2014-11-27T09:10:13Z","created_at_i":1417079413,"objectID":"8666519","parent_id":8658160,"story_id":8657543,"story_title":"EU\u2019s New VAT Rules Could Create a Mess for Startups","story_url":"http://techcrunch.com/2014/11/25/eus-new-vatmoss-rules-could-create-a-vatmess-for-startups/","updated_at":"2024-09-19T21:20:36Z"},{"_highlightResult":{"author":{"matchLevel":"none","matchedWords":[],"value":"milen"},"comment_text":{"fullyHighlighted":false,"matchLevel":"full","matchedWords":["vat","moss","digital","services"],"value":"I don't know about your jurisdiction but in most EU countries, the sale proceeds from Apple lie outside the scope of VAT. Thus, you need to subtract your effective VAT rate and the net effective rate that you end up paying on the MAS is about 10-15%. Which is very close to what you would pay for, say, FastSpring ("You have the option to pay either 8.9% flat or 5.9% plus $.95 per transaction" [1]). The biggest advantage of the MAS is that it's a distribution channel preinstalled on every single Mac - that's extremely valuable.
As you say, you would ideally sell on both the MAS and outside. In terms of selling outside the MAS, it does come with some overhead, mostly related to VAT. Even worse, the EU is changing the VAT rules starting from 2015 (the rule change itself is designed to remove the competitive advantage of big companies to be based in EU states with low VAT and sell products in countries with high(er) rates):
> Currently, the place of taxation for digital services supplies is determined by your location as the supplier of the services. However, from 1 January 2015, the place of taxation will be determined by the location of the consumer.
It's not a big deal since you can just sign up for the VAT MOSS but it's still more hassle than just putting up an app on the MAS. Note that all of this applies after your exceed the VAT threshold, which is different in different EU member states.
[1] http://www.fastspring.com/pricing.php\n[2] http://www.hmrc.gov.uk/posmoss/"},"story_title":{"matchLevel":"none","matchedWords":[],"value":"The Financial Side of Building Mac Apps"},"story_url":{"matchLevel":"none","matchedWords":[],"value":"http://tyler.io/2014/07/a-candid-look-at-the-financial-side-of-building-mac-apps-on-your-own/"}},"_tags":["comment","author_milen","story_8098908"],"author":"milen","comment_text":"I don't know about your jurisdiction but in most EU countries, the sale proceeds from Apple lie outside the scope of VAT. Thus, you need to subtract your effective VAT rate and the net effective rate that you end up paying on the MAS is about 10-15%. Which is very close to what you would pay for, say, FastSpring ("You have the option to pay either 8.9% flat or 5.9% plus $.95 per transaction" [1]). The biggest advantage of the MAS is that it's a distribution channel preinstalled on every single Mac - that's extremely valuable.
As you say, you would ideally sell on both the MAS and outside. In terms of selling outside the MAS, it does come with some overhead, mostly related to VAT. Even worse, the EU is changing the VAT rules starting from 2015 (the rule change itself is designed to remove the competitive advantage of big companies to be based in EU states with low VAT and sell products in countries with high(er) rates):
> Currently, the place of taxation for digital services supplies is determined by your location as the supplier of the services. However, from 1 January 2015, the place of taxation will be determined by the location of the consumer.
It's not a big deal since you can just sign up for the VAT MOSS but it's still more hassle than just putting up an app on the MAS. Note that all of this applies after your exceed the VAT threshold, which is different in different EU member states.
[1] http://www.fastspring.com/pricing.php\n[2] http://www.hmrc.gov.uk/posmoss/","created_at":"2014-07-28T20:51:33Z","created_at_i":1406580693,"objectID":"8099260","parent_id":8099153,"story_id":8098908,"story_title":"The Financial Side of Building Mac Apps","story_url":"http://tyler.io/2014/07/a-candid-look-at-the-financial-side-of-building-mac-apps-on-your-own/","updated_at":"2024-09-19T21:01:18Z"},{"_highlightResult":{"author":{"matchLevel":"none","matchedWords":[],"value":"freetonik"},"comment_text":{"fullyHighlighted":false,"matchLevel":"full","matchedWords":["vat","moss","digital","services"],"value":"Frankly, doing business within EU from EU is more complicated than selling overseas, at least with certain digital products. VAT on digital services is a fantastically dreadful thing: you have to pay VAT to the country of your customer rather than your country. VAT MOSS [1] makes things a bit easier, but it still involves complex reporting and bookkeeping. When I was actively working on my startup in Finland, in the early days of this new VAT rule it was such a mess...
1. https://europa.eu/youreurope/business/taxation/vat/vat-digit..."},"story_title":{"matchLevel":"none","matchedWords":[],"value":"B2C billing is harder than B2B billing"},"story_url":{"matchLevel":"none","matchedWords":[],"value":"https://arnon.dk/6-reasons-why-b2c-billing-is-actually-harder-than-b2b/"}},"_tags":["comment","author_freetonik","story_42124350"],"author":"freetonik","children":[42125024,42125048,42125551],"comment_text":"Frankly, doing business within EU from EU is more complicated than selling overseas, at least with certain digital products. VAT on digital services is a fantastically dreadful thing: you have to pay VAT to the country of your customer rather than your country. VAT MOSS [1] makes things a bit easier, but it still involves complex reporting and bookkeeping. When I was actively working on my startup in Finland, in the early days of this new VAT rule it was such a mess...
1. https://europa.eu/youreurope/business/taxation/vat/vat-digit...","created_at":"2024-11-13T10:55:28Z","created_at_i":1731495328,"objectID":"42124931","parent_id":42124811,"story_id":42124350,"story_title":"B2C billing is harder than B2B billing","story_url":"https://arnon.dk/6-reasons-why-b2c-billing-is-actually-harder-than-b2b/","updated_at":"2024-11-15T11:33:35Z"},{"_highlightResult":{"author":{"matchLevel":"none","matchedWords":[],"value":"raverbashing"},"comment_text":{"fullyHighlighted":false,"matchLevel":"full","matchedWords":["vat","moss","digital","services"],"value":"I remember reading something about this, IIRC goods will join the VATMOSS scheme while the above thresholds apply before this happens (and the whole thing was postponed due to the pandemic). And VAT on digital services should get a threshold now"},"story_title":{"fullyHighlighted":false,"matchLevel":"partial","matchedWords":["vat"],"value":"Brexit VAT rules: shipping notice on a Dutch ecommerce store"},"story_url":{"matchLevel":"none","matchedWords":[],"value":"https://twitter.com/uk_domain_names/status/1345149939064713217"}},"_tags":["comment","author_raverbashing","story_25612128"],"author":"raverbashing","children":[25612456],"comment_text":"I remember reading something about this, IIRC goods will join the VATMOSS scheme while the above thresholds apply before this happens (and the whole thing was postponed due to the pandemic). And VAT on digital services should get a threshold now","created_at":"2021-01-02T12:40:19Z","created_at_i":1609591219,"objectID":"25612427","parent_id":25612389,"story_id":25612128,"story_title":"Brexit VAT rules: shipping notice on a Dutch ecommerce store","story_url":"https://twitter.com/uk_domain_names/status/1345149939064713217","updated_at":"2024-09-20T07:36:15Z"},{"_highlightResult":{"author":{"matchLevel":"none","matchedWords":[],"value":"Silhouette"},"comment_text":{"fullyHighlighted":false,"matchLevel":"full","matchedWords":["vat","moss","digital","services"],"value":"The VAT MOSS scheme we're talking about (currently) only applies to digital services, not physical products. The problems you mentioned don't apply in this context.
There is absolutely nothing about this scheme that is better than before it was introduced. Nothing.
Several years after it was introduced, as others have noted, some of the payment handling services have kind of caught up, to the point where if you can use one of them then you'll probably fly under the radar.
You'll still have to spend time/money on the integration itself. You almost certainly still won't be fully compliant, because 100% compliance is practically impossible. You'll potentially be giving up a significant chunk of your margin in extra fees. And you'll still have the extra paperwork to do and the potential for an expensive audit by any of 28 member states' tax authorities if your number comes up. But at least you can carry on doing business in the meantime and hope for the best.
This tax scheme is my go-to example of what happens when politicians who see a problem but have no idea what they're doing try to fix the problem anyway. Your final sentence is right on point, sadly."},"story_title":{"matchLevel":"none","matchedWords":[],"value":"Going Global with Your Startup"},"story_url":{"matchLevel":"none","matchedWords":[],"value":"http://blog.ycombinator.com/going-global-with-your-startup/"}},"_tags":["comment","author_Silhouette","story_16187126"],"author":"Silhouette","children":[16189105],"comment_text":"The VAT MOSS scheme we're talking about (currently) only applies to digital services, not physical products. The problems you mentioned don't apply in this context.
There is absolutely nothing about this scheme that is better than before it was introduced. Nothing.
Several years after it was introduced, as others have noted, some of the payment handling services have kind of caught up, to the point where if you can use one of them then you'll probably fly under the radar.
You'll still have to spend time/money on the integration itself. You almost certainly still won't be fully compliant, because 100% compliance is practically impossible. You'll potentially be giving up a significant chunk of your margin in extra fees. And you'll still have the extra paperwork to do and the potential for an expensive audit by any of 28 member states' tax authorities if your number comes up. But at least you can carry on doing business in the meantime and hope for the best.
This tax scheme is my go-to example of what happens when politicians who see a problem but have no idea what they're doing try to fix the problem anyway. Your final sentence is right on point, sadly.","created_at":"2018-01-19T18:46:10Z","created_at_i":1516387570,"objectID":"16188615","parent_id":16187941,"story_id":16187126,"story_title":"Going Global with Your Startup","story_url":"http://blog.ycombinator.com/going-global-with-your-startup/","updated_at":"2024-09-20T01:57:26Z"},{"_highlightResult":{"author":{"matchLevel":"none","matchedWords":[],"value":"meredydd"},"comment_text":{"fullyHighlighted":false,"matchLevel":"full","matchedWords":["vat","moss","digital","services"],"value":"The tax stuff is a bit of a pain, but you can buy things (eg Stripe plugins) to make collecting the necessary data much smoother.
In short: If you're supplying digital services to consumers, you need to charge them Value-Added Tax (VAT) in the country they're in, not the country you're in. If you're supplying to businesses, you charge them VAT where you are. You need to collect certain evidence with each transaction, to prove which category/country your customer is in.
The search term you probably want is "VAT MOSS". This officially refers to the "Mini One-Stop Shop" provided by HMRC (the British tax authorities), which tries to ameliorate the situation. You still need to charge people the right amount of tax, but then you can just upload a quarterly spreadsheet saying how much revenue you got from each EU country. But "VAT MOSS" is also used as a catch-all term for the whole cross-border digital VAT kerfuffle.
It started out as a well-intentioned attempt to close a tax loophole, but it was clearly drafted by people with no understanding of how computers work. (There are actually "FAQs" about how, precisely, to handle a German citizen with a British SIM card making a mobile transaction from a train journey crossing the Italian-Swiss border...as if this were something a website could reasonably detect.) But, as I say, there are decent solutions you can use, and you just spend a couple of days implementing one of them."},"story_title":{"matchLevel":"none","matchedWords":[],"value":"Going Global with Your Startup"},"story_url":{"matchLevel":"none","matchedWords":[],"value":"http://blog.ycombinator.com/going-global-with-your-startup/"}},"_tags":["comment","author_meredydd","story_16187126"],"author":"meredydd","children":[16188832,16190995,16191309],"comment_text":"The tax stuff is a bit of a pain, but you can buy things (eg Stripe plugins) to make collecting the necessary data much smoother.
In short: If you're supplying digital services to consumers, you need to charge them Value-Added Tax (VAT) in the country they're in, not the country you're in. If you're supplying to businesses, you charge them VAT where you are. You need to collect certain evidence with each transaction, to prove which category/country your customer is in.
The search term you probably want is "VAT MOSS". This officially refers to the "Mini One-Stop Shop" provided by HMRC (the British tax authorities), which tries to ameliorate the situation. You still need to charge people the right amount of tax, but then you can just upload a quarterly spreadsheet saying how much revenue you got from each EU country. But "VAT MOSS" is also used as a catch-all term for the whole cross-border digital VAT kerfuffle.
It started out as a well-intentioned attempt to close a tax loophole, but it was clearly drafted by people with no understanding of how computers work. (There are actually "FAQs" about how, precisely, to handle a German citizen with a British SIM card making a mobile transaction from a train journey crossing the Italian-Swiss border...as if this were something a website could reasonably detect.) But, as I say, there are decent solutions you can use, and you just spend a couple of days implementing one of them.","created_at":"2018-01-19T16:51:46Z","created_at_i":1516380706,"objectID":"16187636","parent_id":16187470,"story_id":16187126,"story_title":"Going Global with Your Startup","story_url":"http://blog.ycombinator.com/going-global-with-your-startup/","updated_at":"2024-09-20T01:57:19Z"},{"_highlightResult":{"author":{"matchLevel":"none","matchedWords":[],"value":"Silhouette"},"comment_text":{"fullyHighlighted":false,"matchLevel":"full","matchedWords":["vat","moss","digital","services"],"value":"Yes, but the customer isn't always a consumer, so in that case you get a lot of extra burden: pull in the VAT number of the consumer, verify it and if it is correct make the sale without VAT, otherwise make the sale with VAT.
Yes, but such sales are outside the scope of the VAT MOSS scheme.
Note that under VATMOSS any of the tax adminstrators in the EU has the right to audit you so it really pays off to do this well.
We're well aware of this. We spent a great deal of time trying to implement a fully compliant system when the new rules came into effect, and we were still among the first businesses to get one of the fake demands for money never owed because apparently with our vast resources as a little family business we were better at getting it right than several national tax authorities with the resources of an entire government behind them. If that isn't a perfect illustration of the impracticality and excessive burden of the current system, I don't know what is.
And it's the 'place of consumption' rather than the 'place of supply'.
No, for digital services and private consumers, it's the place of supply rules that changed:
https://www.gov.uk/government/publications/vat-supplying-dig...
Of course the practical effect of the changes is typically that the place of supply is now treated as the customer's location where previously it was probably the business's location, so perhaps that's what you meant and we're really talking about the same thing here."},"story_title":{"fullyHighlighted":false,"matchLevel":"partial","matchedWords":["vat"],"value":"Show HN: A REST API for Calculating VAT in the EU"},"story_url":{"matchLevel":"none","matchedWords":[],"value":"https://vatmossapi.com"}},"_tags":["comment","author_Silhouette","story_14076997"],"author":"Silhouette","children":[14077835],"comment_text":"Yes, but the customer isn't always a consumer, so in that case you get a lot of extra burden: pull in the VAT number of the consumer, verify it and if it is correct make the sale without VAT, otherwise make the sale with VAT.
Yes, but such sales are outside the scope of the VAT MOSS scheme.
Note that under VATMOSS any of the tax adminstrators in the EU has the right to audit you so it really pays off to do this well.
We're well aware of this. We spent a great deal of time trying to implement a fully compliant system when the new rules came into effect, and we were still among the first businesses to get one of the fake demands for money never owed because apparently with our vast resources as a little family business we were better at getting it right than several national tax authorities with the resources of an entire government behind them. If that isn't a perfect illustration of the impracticality and excessive burden of the current system, I don't know what is.
And it's the 'place of consumption' rather than the 'place of supply'.
No, for digital services and private consumers, it's the place of supply rules that changed:
https://www.gov.uk/government/publications/vat-supplying-dig...
Of course the practical effect of the changes is typically that the place of supply is now treated as the customer's location where previously it was probably the business's location, so perhaps that's what you meant and we're really talking about the same thing here.","created_at":"2017-04-10T12:11:27Z","created_at_i":1491826287,"objectID":"14077800","parent_id":14077719,"story_id":14076997,"story_title":"Show HN: A REST API for Calculating VAT in the EU","story_url":"https://vatmossapi.com","updated_at":"2024-09-20T00:40:04Z"},{"_highlightResult":{"author":{"matchLevel":"none","matchedWords":[],"value":"jacquesm"},"comment_text":{"fullyHighlighted":false,"matchLevel":"full","matchedWords":["vat","moss","digital","services"],"value":"It's rare to find a business that only sells to consumers.
You really should make the limitations and the targeted audience for the service absolutely clear or you're going to create a world of hurt for the people that use your service thinking you are solving a problem for them.
Essentially you are giving tax advice, that's not an arena you should walk into without professional guidance to make sure you get this 100% right, both from a liability perspective as well as from the perspective of your customers who will come to rely on it (and who won't be able to point at you if you get something wrong).
Things you need (at a minimum):
- the date of the transaction (in case a transaction is processed for a date in the past or the future rather than at the moment of the API call when the rates were different than they are today)
- a means to update VAT rates exactly when they are changed in real life (typically: a system that remembers the VAT rates historically)
- a way to identify the nature of the customers (business / private individuals)
- a way to identify the nature of the product sold (goods, services, a combination of both, and what kind of goods)
- a data privacy statement (you're dealing with consumer data if the API is called from within a webpage running on the consumers browser)
And whatever else I've forgotten but which your local VAT/tax consultant should be able to answer.
You are taking care of one very simple case which the VATMOSS portal in a way already handles without clearly delineating what that case is and which cases you explicitly don't handle.
The easiest improvement to the site would be to include a large font line at the top stating this limitation.
"This tool is only to calculate VAT when selling services or digital goods to consumers"
Also, I think part of what throws people off about what the intended use case is is that you ask for the zip of consumer and country of origin of seller, which does not matter for VATMOSS, it is the country the consumer is in that determines the rate so you don't actually need the country of origin for services/digital goods as far as I know."},"story_title":{"fullyHighlighted":false,"matchLevel":"partial","matchedWords":["vat"],"value":"Show HN: A REST API for Calculating VAT in the EU"},"story_url":{"matchLevel":"none","matchedWords":[],"value":"https://vatmossapi.com"}},"_tags":["comment","author_jacquesm","story_14076997"],"author":"jacquesm","children":[14079590],"comment_text":"It's rare to find a business that only sells to consumers.
You really should make the limitations and the targeted audience for the service absolutely clear or you're going to create a world of hurt for the people that use your service thinking you are solving a problem for them.
Essentially you are giving tax advice, that's not an arena you should walk into without professional guidance to make sure you get this 100% right, both from a liability perspective as well as from the perspective of your customers who will come to rely on it (and who won't be able to point at you if you get something wrong).
Things you need (at a minimum):
- the date of the transaction (in case a transaction is processed for a date in the past or the future rather than at the moment of the API call when the rates were different than they are today)
- a means to update VAT rates exactly when they are changed in real life (typically: a system that remembers the VAT rates historically)
- a way to identify the nature of the customers (business / private individuals)
- a way to identify the nature of the product sold (goods, services, a combination of both, and what kind of goods)
- a data privacy statement (you're dealing with consumer data if the API is called from within a webpage running on the consumers browser)
And whatever else I've forgotten but which your local VAT/tax consultant should be able to answer.
You are taking care of one very simple case which the VATMOSS portal in a way already handles without clearly delineating what that case is and which cases you explicitly don't handle.
The easiest improvement to the site would be to include a large font line at the top stating this limitation.
"This tool is only to calculate VAT when selling services or digital goods to consumers"
Also, I think part of what throws people off about what the intended use case is is that you ask for the zip of consumer and country of origin of seller, which does not matter for VATMOSS, it is the country the consumer is in that determines the rate so you don't actually need the country of origin for services/digital goods as far as I know.","created_at":"2017-04-10T11:54:33Z","created_at_i":1491825273,"objectID":"14077707","parent_id":14077652,"story_id":14076997,"story_title":"Show HN: A REST API for Calculating VAT in the EU","story_url":"https://vatmossapi.com","updated_at":"2024-09-20T00:40:04Z"},{"_highlightResult":{"author":{"matchLevel":"none","matchedWords":[],"value":"Silhouette"},"comment_text":{"fullyHighlighted":false,"matchLevel":"full","matchedWords":["vat","moss","digital","services"],"value":"Given that it's specifically for VAT MOSS, presumably it's specifically intended for B2C sales of digital products/services where the MOSS-related place of supply rules apply?"},"story_title":{"fullyHighlighted":false,"matchLevel":"partial","matchedWords":["vat"],"value":"Show HN: A REST API for Calculating VAT in the EU"},"story_url":{"matchLevel":"none","matchedWords":[],"value":"https://vatmossapi.com"}},"_tags":["comment","author_Silhouette","story_14076997"],"author":"Silhouette","children":[14077697,14077719],"comment_text":"Given that it's specifically for VAT MOSS, presumably it's specifically intended for B2C sales of digital products/services where the MOSS-related place of supply rules apply?","created_at":"2017-04-10T11:51:23Z","created_at_i":1491825083,"objectID":"14077687","parent_id":14077573,"story_id":14076997,"story_title":"Show HN: A REST API for Calculating VAT in the EU","story_url":"https://vatmossapi.com","updated_at":"2024-09-20T00:40:04Z"},{"_highlightResult":{"author":{"matchLevel":"none","matchedWords":[],"value":"undefined0"},"comment_text":{"fullyHighlighted":false,"matchLevel":"full","matchedWords":["vat","moss","digital","services"],"value":"I had to stop working on a website which was soon to launch when I learned about VAT MOSS. Although, I was thinking whether a faucet-style (india/russia/romania workers) website could pay people $N per email to send the digital good/service manually. Then that should bypass the VAT MOSS legislation, right? Although, they do have plans to apply VAT MOSS to physical goods/services in 2016. It's a pain in the ass."},"story_title":{"matchLevel":"none","matchedWords":[],"value":"The European Commission is preparing an attack on the hyperlink"},"story_url":{"matchLevel":"none","matchedWords":[],"value":"https://juliareda.eu/2015/11/ancillary-copyright-2-0-the-european-commission-is-preparing-a-frontal-attack-on-the-hyperlink/"}},"_tags":["comment","author_undefined0","story_10524717"],"author":"undefined0","comment_text":"I had to stop working on a website which was soon to launch when I learned about VAT MOSS. Although, I was thinking whether a faucet-style (india/russia/romania workers) website could pay people $N per email to send the digital good/service manually. Then that should bypass the VAT MOSS legislation, right? Although, they do have plans to apply VAT MOSS to physical goods/services in 2016. It's a pain in the ass.","created_at":"2015-11-07T21:05:34Z","created_at_i":1446930334,"objectID":"10526220","parent_id":10525105,"story_id":10524717,"story_title":"The European Commission is preparing an attack on the hyperlink","story_url":"https://juliareda.eu/2015/11/ancillary-copyright-2-0-the-european-commission-is-preparing-a-frontal-attack-on-the-hyperlink/","updated_at":"2024-09-19T22:29:02Z"},{"_highlightResult":{"author":{"matchLevel":"none","matchedWords":[],"value":"lukeredpath"},"comment_text":{"fullyHighlighted":false,"matchLevel":"full","matchedWords":["vat","moss","digital","services"],"value":"US/non-EU companies selling digital products and services to the EU is most certainly NOT exempt, and it wasn't exempt before these recent changes - it's been a requirement that US/non-EU businesses selling digital services register to charge VAT to EU customers at their local VAT rate since 2003!
Rather than registering in each EU country, they could register in one country and use the VoES system to submit their returns.
It was because of this ruling that big companies like Amazon found a workaround by setting up subsidiaries in countries with low VAT rates like Luxembourg and sold their goods from there. This meant they could charge Lux VAT instead of the customer country's VAT rate.
This obviously gave them an unfair advantage not only over local businesses but also non-EU businesses that used the VoES system.
In effect these new rules change little for non EU businesses. The VoES system is being retired in favour of the new MOSS system which is effectively the same sort of thing, only now, ALL businesses including those in the EU, have to charge local VAT when selling digital services to the EU.
For e big companies like Amazon, this closes a loophole. For those who were correctly charging VAT under the VoES system, nothing much changes. For those non-EU companies who were chose not to comply with the 2002 rules, well I'd imagine they will continue to not bother. And those who were ignorant of them (many I'm sure) might now be a bit more aware.
But of course the businesses it affects the most are small EU businesses who now have to charge different rates of VAT or use MOSS when they didn't before."},"story_title":{"fullyHighlighted":false,"matchLevel":"partial","matchedWords":["vat"],"value":"Making Sense of the New VAT Rules"},"story_url":{"fullyHighlighted":false,"matchLevel":"partial","matchedWords":["vat"],"value":"http://rachelandrew.github.io/eu-vat/"}},"_tags":["comment","author_lukeredpath","story_8965331"],"author":"lukeredpath","comment_text":"US/non-EU companies selling digital products and services to the EU is most certainly NOT exempt, and it wasn't exempt before these recent changes - it's been a requirement that US/non-EU businesses selling digital services register to charge VAT to EU customers at their local VAT rate since 2003!
Rather than registering in each EU country, they could register in one country and use the VoES system to submit their returns.
It was because of this ruling that big companies like Amazon found a workaround by setting up subsidiaries in countries with low VAT rates like Luxembourg and sold their goods from there. This meant they could charge Lux VAT instead of the customer country's VAT rate.
This obviously gave them an unfair advantage not only over local businesses but also non-EU businesses that used the VoES system.
In effect these new rules change little for non EU businesses. The VoES system is being retired in favour of the new MOSS system which is effectively the same sort of thing, only now, ALL businesses including those in the EU, have to charge local VAT when selling digital services to the EU.
For e big companies like Amazon, this closes a loophole. For those who were correctly charging VAT under the VoES system, nothing much changes. For those non-EU companies who were chose not to comply with the 2002 rules, well I'd imagine they will continue to not bother. And those who were ignorant of them (many I'm sure) might now be a bit more aware.
But of course the businesses it affects the most are small EU businesses who now have to charge different rates of VAT or use MOSS when they didn't before.","created_at":"2015-01-29T13:21:06Z","created_at_i":1422537666,"objectID":"8965901","parent_id":8965512,"points":null,"story_id":8965331,"story_title":"Making Sense of the New VAT Rules","story_url":"http://rachelandrew.github.io/eu-vat/","updated_at":"2023-09-06T23:23:29Z"},{"_highlightResult":{"author":{"matchLevel":"none","matchedWords":[],"value":"gamblor956"},"comment_text":{"fullyHighlighted":false,"matchLevel":"full","matchedWords":["vat","moss","digital","services"],"value":"3. WA DOR publishes all sales tax rate change notices on their website. https://dor.wa.gov/taxes-rates/sales-and-use-tax-rates/local...
In 2020, there were fewer than a 2 dozen rate changes throughout the entire year at the local level, none at the state level, and certainly not any rate changes in a single tax locale occurring multiple times during the year at any level. And this was verified by running tax rate reports for the state of WA in Avalara for each quarter in 2020.
I understand the point you're trying to make, but you're not going to win this argument by making up such blatant falsehoods. (Note that I actually handle the sales tax compliance for my company, including the state of WA, and I am definitely more familiar with sales tax rate changes than you are.)
4. The Feds do not have the power to require states to join the SST as it would violate the states' right to control intrastate commerce.
4a. Zip-coded based taxation is not sufficiently granular. For example, a single zip code in LA can contain multiple municipalities. A number of zip codes cross county and state lines. (9-digit zip codes are more granular, but only areas with sufficient mail volume are assigned the extra 4 digits.)
4b. I don't know what is behind your fascination with updating sales tax rates every quarter. Sales tax rates are generally updated every few years for any given tax location. It only seems like they update more frequently than that because you are conflating local tax jurisdictions with state-level jurisdictions.
4c. I know how VATMOSS works; as I have stated elsewhere I am a tax professional and handle indirect compliance functions for my company.
There is not a single VAT rate per country; there are 3 or more rates, corresponding to the different VAT classifications of goods. Most EU countries have 3 rates; during COVID several of them had as many as 7 rates (as a result of short-term discounted rates on certain types of goods and services).
Furthermore, only a limited number of VAT-subject digital goods and services are handled by the VAT MOSS system; physical goods are not VAT MOSS eligible, and classification/taxation of physical goods is 99% of the complexity of indirect tax regimes.
Additionally, the EU is legally and structurally fundamentally different from the U.S. VAT MOSS is possible in the EU because the member nations are bound to participate in EU economic initiatives as a condition of being a member of the EU (see, for example, the issues leading to Brexit). No similar legal arrangement exists between the American states; moreover, the U.S. Constitution does not grant the central/federal government the power to control commerce within a state.
It is simply not possible to have something like the VATMOSS in the U.S. It would require significant changes to the basic structure of American government. The best we'll get is the SST, and it's very unlikely that states like CA and NY will ever agree to give up control of their own tax systems to a system run by the Midwestern and Southeastern states.
Indeed, the SST exists primarily because most out-of-state sellers to these states would not sell enough to reach the nexus thresholds and so those sales would not be subject to sales tax; the SST is the carrot to get sellers to agree to handle sales tax compliance, and that is why it is mandatory to agree to sales tax for all SST member states as a condition of using the SST. (For example, without getting into specifics, my company's sales to all SST member states combined is less than the sales to CA, or NY, or FL, or CO, or TX, or IL.)"},"story_title":{"matchLevel":"none","matchedWords":[],"value":"Stripe Tax"},"story_url":{"matchLevel":"none","matchedWords":[],"value":"https://stripe.com/tax"}},"_tags":["comment","author_gamblor956","story_27459712"],"author":"gamblor956","children":[27478903],"comment_text":"3. WA DOR publishes all sales tax rate change notices on their website. https://dor.wa.gov/taxes-rates/sales-and-use-tax-rates/local...
In 2020, there were fewer than a 2 dozen rate changes throughout the entire year at the local level, none at the state level, and certainly not any rate changes in a single tax locale occurring multiple times during the year at any level. And this was verified by running tax rate reports for the state of WA in Avalara for each quarter in 2020.
I understand the point you're trying to make, but you're not going to win this argument by making up such blatant falsehoods. (Note that I actually handle the sales tax compliance for my company, including the state of WA, and I am definitely more familiar with sales tax rate changes than you are.)
4. The Feds do not have the power to require states to join the SST as it would violate the states' right to control intrastate commerce.
4a. Zip-coded based taxation is not sufficiently granular. For example, a single zip code in LA can contain multiple municipalities. A number of zip codes cross county and state lines. (9-digit zip codes are more granular, but only areas with sufficient mail volume are assigned the extra 4 digits.)
4b. I don't know what is behind your fascination with updating sales tax rates every quarter. Sales tax rates are generally updated every few years for any given tax location. It only seems like they update more frequently than that because you are conflating local tax jurisdictions with state-level jurisdictions.
4c. I know how VATMOSS works; as I have stated elsewhere I am a tax professional and handle indirect compliance functions for my company.
There is not a single VAT rate per country; there are 3 or more rates, corresponding to the different VAT classifications of goods. Most EU countries have 3 rates; during COVID several of them had as many as 7 rates (as a result of short-term discounted rates on certain types of goods and services).
Furthermore, only a limited number of VAT-subject digital goods and services are handled by the VAT MOSS system; physical goods are not VAT MOSS eligible, and classification/taxation of physical goods is 99% of the complexity of indirect tax regimes.
Additionally, the EU is legally and structurally fundamentally different from the U.S. VAT MOSS is possible in the EU because the member nations are bound to participate in EU economic initiatives as a condition of being a member of the EU (see, for example, the issues leading to Brexit). No similar legal arrangement exists between the American states; moreover, the U.S. Constitution does not grant the central/federal government the power to control commerce within a state.
It is simply not possible to have something like the VATMOSS in the U.S. It would require significant changes to the basic structure of American government. The best we'll get is the SST, and it's very unlikely that states like CA and NY will ever agree to give up control of their own tax systems to a system run by the Midwestern and Southeastern states.
Indeed, the SST exists primarily because most out-of-state sellers to these states would not sell enough to reach the nexus thresholds and so those sales would not be subject to sales tax; the SST is the carrot to get sellers to agree to handle sales tax compliance, and that is why it is mandatory to agree to sales tax for all SST member states as a condition of using the SST. (For example, without getting into specifics, my company's sales to all SST member states combined is less than the sales to CA, or NY, or FL, or CO, or TX, or IL.)","created_at":"2021-06-11T18:57:55Z","created_at_i":1623437875,"objectID":"27477185","parent_id":27476411,"story_id":27459712,"story_title":"Stripe Tax","story_url":"https://stripe.com/tax","updated_at":"2024-09-20T08:47:17Z"},{"_highlightResult":{"author":{"matchLevel":"none","matchedWords":[],"value":"fauigerzigerk"},"comment_text":{"fullyHighlighted":false,"matchLevel":"full","matchedWords":["vat","moss","digital","services"],"value":"That's true. But there is some progress on that as well. From Jan 2019, the so called VAT MOSS (mini one stop shop) is open to companies from outside the EU as well: https://www.gov.uk/government/publications/vat-changes-to-th...
I don't know how it works exactly, but it means that you can now supply digital goods and services to all EU countries after getting registered with the VAT MOSS instead of registering for VAT in every single EU country.
Also, for very small suppliers there is now a \u20ac10,000 (p.a) threshold (total sales into the EU) below which you don't have to charge VAT at all."},"story_title":{"matchLevel":"none","matchedWords":[],"value":"EU and Japan create world's biggest free trade zone"},"story_url":{"matchLevel":"none","matchedWords":[],"value":"https://www.dw.com/en/eu-and-japan-create-worlds-biggest-free-trade-zone/a-47319521"}},"_tags":["comment","author_fauigerzigerk","story_19054358"],"author":"fauigerzigerk","children":[19057215,19058707],"comment_text":"That's true. But there is some progress on that as well. From Jan 2019, the so called VAT MOSS (mini one stop shop) is open to companies from outside the EU as well: https://www.gov.uk/government/publications/vat-changes-to-th...
I don't know how it works exactly, but it means that you can now supply digital goods and services to all EU countries after getting registered with the VAT MOSS instead of registering for VAT in every single EU country.
Also, for very small suppliers there is now a \u20ac10,000 (p.a) threshold (total sales into the EU) below which you don't have to charge VAT at all.","created_at":"2019-02-01T18:46:19Z","created_at_i":1549046779,"objectID":"19057135","parent_id":19054950,"story_id":19054358,"story_title":"EU and Japan create world's biggest free trade zone","story_url":"https://www.dw.com/en/eu-and-japan-create-worlds-biggest-free-trade-zone/a-47319521","updated_at":"2024-09-20T03:42:49Z"},{"_highlightResult":{"author":{"matchLevel":"none","matchedWords":[],"value":"gingerlime"},"comment_text":{"fullyHighlighted":false,"matchLevel":"full","matchedWords":["vat","moss","digital","services"],"value":"There are quite a few hurdles for small businesses and young startups in Europe to do business online:
* registration of a limited company is not that simple in some countries. UK is relatively easy, but in Germany you need to invest at least 25,000 EUR just to get started. Half of it upfront. Not to mention notary fees and other red tape.
* VAT is a huge pain since 2015, especially for digital goods and services. Look up VAT MOSS aka #vatmess
* language - if you want to cater to a wider audience, localization is still a major aspect and costs a lot in terms of development, content, support etc
* employment rules are usually much more strict. This is generally positive for employed individuals, but when it comes to a small business trying to work with freelancers (or freelancers themselves), they are massive hurdles. I'm familiar with IR35 in the UK, but there's pretty much the same thing here in Germany without having a fancy name... I'm pretty sure similar rules apply in other EU countries as well, but have no actual knowledge about other countries.
Source: being a small fish entrepreneur in Israel, UK and Germany.
EDIT I should also add currency support. Whilst the EUR covers a fair number of countries, there are still exceptions..."},"story_title":{"fullyHighlighted":false,"matchLevel":"partial","matchedWords":["digital"],"value":"Europe\u2019s Other Crisis: A Digital Recession"},"story_url":{"fullyHighlighted":false,"matchLevel":"partial","matchedWords":["digital"],"value":"https://hbr.org/2015/10/europes-other-crisis-a-digital-recession"}},"_tags":["comment","author_gingerlime","story_10490522"],"author":"gingerlime","children":[10490880,10490882,10490919,10491047,10491071],"comment_text":"There are quite a few hurdles for small businesses and young startups in Europe to do business online:
* registration of a limited company is not that simple in some countries. UK is relatively easy, but in Germany you need to invest at least 25,000 EUR just to get started. Half of it upfront. Not to mention notary fees and other red tape.
* VAT is a huge pain since 2015, especially for digital goods and services. Look up VAT MOSS aka #vatmess
* language - if you want to cater to a wider audience, localization is still a major aspect and costs a lot in terms of development, content, support etc
* employment rules are usually much more strict. This is generally positive for employed individuals, but when it comes to a small business trying to work with freelancers (or freelancers themselves), they are massive hurdles. I'm familiar with IR35 in the UK, but there's pretty much the same thing here in Germany without having a fancy name... I'm pretty sure similar rules apply in other EU countries as well, but have no actual knowledge about other countries.
Source: being a small fish entrepreneur in Israel, UK and Germany.
EDIT I should also add currency support. Whilst the EUR covers a fair number of countries, there are still exceptions...","created_at":"2015-11-02T09:30:36Z","created_at_i":1446456636,"objectID":"10490863","parent_id":10490522,"story_id":10490522,"story_title":"Europe\u2019s Other Crisis: A Digital Recession","story_url":"https://hbr.org/2015/10/europes-other-crisis-a-digital-recession","updated_at":"2024-09-19T22:27:49Z"},{"_highlightResult":{"author":{"matchLevel":"none","matchedWords":[],"value":"vacooom"},"comment_text":{"fullyHighlighted":false,"matchLevel":"full","matchedWords":["vat","moss","digital","services"],"value":"I don't have a good resource that summarizes the various rules, but high-level this is the mechanism:
For B2B:\n 1. If the seller is extra-EU, and the buyer in EU, no VAT is charged\n 2. If the seller is in one EU country, and the buyer is in a different EU country, no VAT is charged by the seller, but the buyer has to do a "VAT reverse charge" (it still nets to 0\u20ac paid, but there is extra paperwork involved)\n 3. If the seller and the buyer are in the same EU country, they charge the regular VAT rate
For B2C things are a lot more complicated for cross-border transactions, and there is a difference between selling goods and services. For digital goods, as a seller, you would need to charge the VAT of the country of the _buyer_, and gather two pieces of evidence about the country the buyer resides in, then remit the taxes through the VAT MOSS system. Not fun. That's why Paddle & co are popular."},"story_title":{"matchLevel":"none","matchedWords":[],"value":"Twitter Blue breaks EU consumer law by showing prices without tax"},"story_url":{"matchLevel":"none","matchedWords":[],"value":"https://www.businessinsider.com/elon-musk-twitter-blue-breaking-rules-unfair-business-practices-eu-2023-3"}},"_tags":["comment","author_vacooom","story_35217666"],"author":"vacooom","comment_text":"I don't have a good resource that summarizes the various rules, but high-level this is the mechanism:
For B2B:\n 1. If the seller is extra-EU, and the buyer in EU, no VAT is charged\n 2. If the seller is in one EU country, and the buyer is in a different EU country, no VAT is charged by the seller, but the buyer has to do a "VAT reverse charge" (it still nets to 0\u20ac paid, but there is extra paperwork involved)\n 3. If the seller and the buyer are in the same EU country, they charge the regular VAT rate
For B2C things are a lot more complicated for cross-border transactions, and there is a difference between selling goods and services. For digital goods, as a seller, you would need to charge the VAT of the country of the _buyer_, and gather two pieces of evidence about the country the buyer resides in, then remit the taxes through the VAT MOSS system. Not fun. That's why Paddle & co are popular.","created_at":"2023-03-19T13:22:29Z","created_at_i":1679232149,"objectID":"35218666","parent_id":35218487,"story_id":35217666,"story_title":"Twitter Blue breaks EU consumer law by showing prices without tax","story_url":"https://www.businessinsider.com/elon-musk-twitter-blue-breaking-rules-unfair-business-practices-eu-2023-3","updated_at":"2024-09-20T13:34:57Z"}],"hitsPerPage":20,"nbHits":80,"nbPages":4,"page":0,"params":"query=VAT+MOSS+digital+services&advancedSyntax=true&analyticsTags=backend","processingTimeMS":50,"processingTimingsMS":{"_request":{"roundTrip":26},"afterFetch":{"format":{"highlighting":1,"total":2},"merge":{"mergeLoop":{"prepareNextHit":10,"total":10},"total":11},"total":11},"fetch":{"query":13,"scanning":25,"total":39},"total":50},"query":"VAT MOSS digital services","serverTimeMS":53}